The goals of digital transformation are increasing choice for consumers, improving efficiency and creating a better customer experience, according to Vishal Augustine, a manager and lead architect for Huawei BSS.
In the first of a two-part Q&A, Augustine told Telco Transformation that organizations must make hard choices about which of the three pillars to build first. In some cases, he said, companies go all in and do total makeovers in one go.
Telco Transformation: As a level set, what is your definition of digital transformation?
Vishal Augustine: Digital transformation is doing the old things in a much better and more efficient manner. There are three pillars. Telcos are going to sell products. What will be different is the packages that they include it in. The variety can increase. The second pillar is operational efficiency. In the digital age they can do these things much faster and in a much cheaper or cost-effective way. The third one is the customer experience. With the digital disruption, the focus has to change. That's where the big data and all those things come in.
Because of digital technology, how these things are being done and delivered has changed. What used to work is not going to be profitable. Along with the new technologies, they need to change the mindset and then try to deliver it.
TT: Is the change to get faster? To transform linear processes that people use? What is the goal that all the change heads towards?
VA: In fact whenever I talk to the C-level people, this question comes up: "What should be our goal?" They have an idea but ask, "Where do I set my priorities?" "What is my digital transformation goal?"
Working across the world, what I've seen is the priorities are different in each geographical region. It depends on your competition. Each operator chooses their own pillar [from which to start]. There is an amount of capex they can infuse into it. In Europe, perhaps some of the operators talk about ensuring that they can increase the online transaction percentage of their company and make it more customer-centric. They bring in big data so that it can be done in a much more analytical way.
In fact there were some operators I was interacting with who were planning to use AI to enhance the customer interaction experience. These kinds of innovations are happening in the customer experience layer..
There are other operators who I have interacted with who want to focus on the products that they can provide. There are other operators who want to actually bring their operational costs drastically down, and boost the productivity. It depends on each operator and where they set the priority. So, there's no single path to say that this is where you want to reach.
TT: It sounds very confusing.
VA: It depends on various factors, on how you define what your target is for that particular operator. Not many operators focus on all the three. A global LatAm-based operator I have spoken to is indeed trying to focus on all the three. There is another operator who has come up with this vision that they want to become like an OTT provider and hence they don't what to focus on creating so many products.
One operator in Europe with whom I interacted with has a specific program where they have identified what they will focus on, in which particular year. They didn't really change their whole backend system. They said, "Okay let's focus on one system at this point of time." Then after that we will go and change our channels. Then we will go ahead and we will actually move all these systems to a virtualized and a cloud environment."
On the other hand, some operators are picky and choosy in year they want to do it. But there are other operators that say, "Let's go all in and either we succeed or we fail." But at the end of the day, you will end up doing all three. The question is which one you start with.
TT: It sounds like it can be a case of paralysis by analysis. How do you start?
VA: One European company I was talking to has competition that is not that high. And they have a good amount of brick and mortar presence. Now the motivation to actually move to an all online arrangement is not that high, but they know that they have to do it because eventually time will catch them.
They took that as priority two [operational efficiency]. By the time I discussed with them priority one had already been fulfilled and they were talking about priority two now becoming priority one. It depends on how you prioritize and how you want to restructure your company. You can take out all your legacy systems in one go, but you have to keep in mind the risk of doing it while running the operation and competing in the market.
— Carl Weinschenk, Contributing Writer, Telco Transformation