With much of the digital customer-driven revolution playing out on top of telecommunication networks, Communications Service Providers (CSPs) are often assumed to be at the very forefront when it comes to digitalisation and personalisation of the customer experience.
But, in truth, they often lag far behind sectors such as financial services, healthcare – even transportation – when it comes to customer engagement, digital transformation of operations and the exploitation of data assets to personalise services and experiences. If these providers want to avoid becoming commoditised by new, pure-play digital and relentlessly customer-focused rivals, they need to sweat their data assets, says Steve Cockerill of Capita Consulting.
Slow growth, increasing competition from digital disrupters, low NPS scores, declining ARPU, rising churn and the requirement to generate return on investment from 5G and other technologies, all add to the urgency for CSPs to focus on personalisation, omnichannel engagement strategies and taking full advantage of their vast amounts of customer data.
The industry should focus on the highest-value journeys and use cases and employ data and engagement strategies in an integrated way, developing insights from existing data assets and deploying human-centred service design to maximising both transactional and customer lifetime value.
While operators have an essential role as networks and facilitators of today’s digital life, many CSPs actually predate the digital era and are held back by siloed legacy OSS (Operations Support Systems) and BSS (Business Support Systems) platforms, outdated business and operating models, and the neglect of data as their key operating asset.
With CSPs acknowledging that the customer experience is the most important differentiator to compete in the marketplace, operators will need to leverage best practice CX (Customer Experience) and liberate their trapped data assets. With legacy operating models and IT systems, CSP should deploy digital integration layers to deliver relevant and personalised experiences to their customers across all channels in real time to increase Customer Lifetime Value, stem margin decline and justify investments in new technologies such as 5G, platform business models and next generation OSS/BSS.
Why do CSPs find it so difficult to improve and personalise the customer experience?
CSPs need to transform into DSPs (Digital Service Providers) and/or DSEs (Digital Service Enablers) to stay competitive, but face a huge task in meeting the challenge from digital-native competitors, such as a host of OTT (Over-The-Top) players, content providers and retailers (such as Rakuten in Japan). Players whose business and operating models have often been designed around the customer from the ground up, and for whom data is the key competitive asset in providing seamless, often superior, personalised customer experiences – and who capture the majority of the value share. The telecommunications industry finds it hard to compete with these data-driven businsses and struggles to capture the higher margin (as opposed to just the connectivity component) segments in the new and emerging 5G, IoT and Edge computing value chain.
Addressing this challenge has been complicated by siloed business units and legacy IT systems and infrastructure that make it difficult to centralise customer information and interactions across operations; inadequate data management and analytics capabilities to store and mine customer and operations data sets, manual processes, and disparate engagement channels, systems, processes, and operations.
So what can CSPs do to make most of their vast existing data assets to provide that exceptional, seamless customer experience expected by today’s digital-native customers, while at the same time prioritising scarce investment resources into that part of the customer journey and offering orchestration that yields the greatest return in terms of revenue, margin, NPS and loyalty.
In all instances CSPs need to have a clear vision of the type of operators they want to be and the customer engagement strategy and capabilities they require. They may focus on network virtualisation, building a portfolio of digital services, building and managing platforms to facilitate digital ecosystems, or utilize multiple business models approaches – or indeed embark on a combination of a number of concurrent journeys.
One of the journeys underlying most DSP and DSE operating models is towards a data-centric, automated enterprise which will require new forms of enterprise information architecture and predictive analytics. The telco of the future will need to be data-and-experience driven and agile in its operating model. Such a transformation encompasses both the digitising of core customer journeys and internal processes, as well as using data to drive real-time insights. We often see companies investing in one or the other, but it’s the two together that enable a real transformation.
Much of the transformation from CSP to experience-led DSP will require the use of both existing OSS and BSS data, as well as the integration of third-party data such as social networks, location and internet browsing. With the complexity involved in completely replacing legacy system silos and long renewal timeframes, a digital integration layer focusing on the extraction of data relevant to customer experience, high-value journeys, offering orchestration and channel economics is the first significant step for greater and more effective experience personalisation on the transformation journey.
As part of an overall digital transformation strategy, legacy CSPs should prioritise the development of a digital integration and Open API layer as part of their IT consolidation, or as a separate innovation platform, allowing access to data stored in the core OSS/BSS systems and enabling third party open-API plug and play.
CSPs today are still focused on cost optimisation to deliver ever larger data volumes at reduced costs. In the meantime not only the traditional digital players like Google and Facebook have captured the majority of non-connectivity value share, but new entrants like Rakuten in Japan are bringing digital retail players into direct competition with MNOs (Mobile Network Operators) aiming to focus on a“digital-first enablement will allow the company to have stronger, more personalized customer relationships, enable it to attract a greater share of the Japanese market and enhance the power of the Rakuten brand and its additional services”. (Tareq Amin, CTO at Rakuten Mobile Network)
Where to start?
A key starting point for CSPs, after having agreed the overall transformation vision and ambition, is the identification of the key high value journeys and customer episodes that are most critical to improving the overall end-to-end lifecycle experience. Whilst there is an assumption that for many customers digital channels are now the preferred interaction platform, traditional channels have a role to play in releasing and extending customer value.
Creating a digital integration layer, either through Open Source Solutions, a commercial solution such as MuleSoft or Appian, or as an integrated CES (Customer Engagement Solution), such as Salesforce, Pega or Oracle, will support operators to maximise the value in their existing data assets in OSS and BSS to be utilised to develop closer and more profitable customer experiences.
Capita Consulting has assembled the expertise and capabilities to enhance operational efficiency and enable the delivery of better data driven CX and is developing data, experience and personalisation offering capabilities for a number of clients and with a variety of strategic partners.
However, the key is to get the digital transformation and data-driven momentum going, even if the initial initiative may be more manual than automated and of limited scale. We recommend that CSPs focus on a number of key journeys and quick wins in the early phase to build competence and identify value, rather than wait for the completion of a wider technology and OSS/BSS renewal.
Making the most of the assets operators already have, albeit often trapped in legacy systems, combined with agile ways of working, will result in a marked improvement of data-driven customer experiences and greater personalisation for today’s CSPs digital customers.