Digital Transformation in the Telco Industry

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Mobile World Congress is billed as the digital transformation event of the year. Telecommunications, just like every other industry, is trying to understand what digital means for them. With the explosion of mobile subscriptions – we are looking at nine billion potential mobile subscriptions worldwide by the end of 2020 – the pressure to make change is right now.

Telcos that are successfully navigating the digital transformation are those that understand they need to rethink who they are. Their customers are a new generation of young people who have been brought up with social media, and who expect their service providers to know their likes, dislikes and preferences based on their customer data and their usage patterns.

However, like all industries, telecommunications companies are facing the intractable problem of complexity.

Late last year, I wrote a blog post describing how digital is changing the relationship between the CIO and the CFO. One of the digital-related evolutions we are seeing in telecommunications is a much closer partnership between the IT and financial leaders. And one of the positive spin-offs of this growing closeness is simplicity.

Historically, telcos have grown through acquisitions – and these mean more systems, more interfaces between systems and much more data. CFOs in the industry are starting to see that CIOs are their key to managing and consuming all that data. CIOs can provide technology such as dashboards that help CFOs understand their companies’ financial status live and on the go.

Fraud is a growing problem in the industry, as more and more people use their mobiles for payments via web browsers. Hacking also means that bandwidth is being stolen, and this takes a direct hit on bottom line. Here CIOs can provide CFOs with real-time insights into any anomalies that could arise from fraud or hacking.

Another priority in the digital economy is landscape reduction and simplification. Telcos typically have large numbers of billing systems, and CIOs are able to lead that reduction and demonstrate that better and cleaner data results in lowered costs. This is win/win for both CIO and CFO: the CIO doesn’t have to maintain as many systems, the application footprint and workload are reduced, while the CFO saves money.

Telcos that are successfully tapping into digitalization are those that realize that consumers want the same systems across the globe. Travelers want to be able to use their TripAdvisor app the same way in Bolivia as they do in Australia. Having worked with consumers in IT, the CIO is also able to guide the CFO in developing user empathy. Without it, telcos will lose customers.

As the number of mobile devices outstrip the world’s population, telcos have a choice – either to transform or to be left behind. And a close relationship between the CIO and the CFO is crucial to their transformation.

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