There’s no doubt that the current shift to digital is disrupting the telecoms industry. Yet, major shake-ups of this kind do create opportunities for businesses that are bold enough to make the changes needed to succeed.
The way I see it, there is a choice, but not much of one. Either operators face up to the digital revolution and restructure all aspects of their operation to shape that market, or they focus on cutting costs to harvest declining revenues. Yes, the former option is a risk, especially as the barriers to entering this new market landscape are relatively low and competition is fierce. However, for any communications company with ambition it is really the only alternative.
But often in these situations, the right person isn’t the one to step up to the plate. Successful changes need the right champion; an informed leader who’s prepared to manage the resistance that’s bound to be there. And who better to drive a digital technology revolution, but an expert in that technology? For CIOs the time is now.
It will take a strong leader to wean the IT function away from the commoditised world of maintenance and support and instead ensure that IT is integral to business strategy and planning. It will also mean some tough decisions. IT architecture installed during the years of telecoms industry growth is already becoming too cumbersome to keep up with current fast changes in product, pricing and customer information and with multi-channel customer interaction. With the pace of change quickening the gap is only going to increase.
It might be difficult for a CIO who has had success with these systems – to buy into the newer, cloud-based solutions that are now needed too. So, using my experience as a former CIO and as someone who now helps CIOs rebuild for digital, here are some areas to focus on:
- Accept that organisational change is inevitable for the business to survive and then get to the front and lead it. For example, new revenue streams such as apps, digital services, new tariffs and other offerings need a new holistic business strategy and structure around them. Revenue may now be coming from app micropayments rather than from calls, data and hardware – which will mean a whole new rethink about running and financing the business.
No longer can digital services be run as a stand-alone division – there must be a single source of information for each customer to enable up and cross-selling and ‘next best action’ marketing techniques based on individual purchasing histories. CIOs must position themselves as the architect of this new vision where digital services are the core product.
- CIOs aren’t just rebuilding for a digital customer, but also a digital workforce. But to do this they need to think beyond your existing legacy systems and their providers – nothing is sacrosanct. The good news is that the ecosystem to achieve this is expanding, so flexibility is key in finding the right tools and bringing them into the solution. Realignment means merging old-world legacy systems and processes with cloud-based systems which provide a new agility on top of existing architecture.
- Use this agility to speed up innovation for faster cycles of new services, bundles or tariffs. Don’t get stuck with those that don’t work. If new ideas are going to fail, make sure they can fail quickly and be replaced with the next iteration. Cloud-enabled software can provide a faster time to market combined with financial flexibility. CIOs can capitalise the large purchases but commit to much less upfront and then scale.
- Forget the train of thought that says that because cloud-based technologies are maintained by the provider, the CIO and their department no longer have much of a role. Instead think of training up staff so they have the right skills when IT work is focused higher up the value chain. For example, technical staff need to take on more of a consultancy-style approach, demanding enhanced communications skills.
CIOs are the people with the skills and knowledge needed for a digital future. Change is always difficult but the rewards for leading it have never been greater.
Do you agree that fortune favours a brave CIO? Let us know in the comments.