Friday, 12 February 2016

Digital Transformation in Communications Industry Not Happening Fast Enough, Major Global Study Finds

Amdocs unveiled a new survey conducted for Amdocs by top analyst firm IDC showing that service providers in Asia Pacific (APAC) believe they are not transforming fast enough to meet the demands of today’s digital era. According to the survey, 47 percent of local C-level and other service provider decision makers predict that it will take their companies more than five years to transform. This is not fast enough according to 76 percent of respondents who believe that the communications industry will be outpaced by other industries.

·         Racing to get a digital strategy and chief digital officer: According to the survey, 33 percent of service providers in APAC still do not have a digital strategy in place. While 90 percent of local respondents highlight the importance of having a chief digital officer (CDO) to lead and drive such a strategy, only 29 percent have one. Furthermore, 85 percent of the industry is still executing digital transformation projects as stand-alone initiatives without alignment to a broader technology roadmap or business strategy.

·         The need for the right digital skills: Sixty-seven percent of respondents in APAC believe that the communications industry has strong technology capabilities but will find it difficult to implement and bring to market digital transformation projects quickly enough. When asked what factor would most help their companies transform into digital service providers, having the right skills to create and implement digital transformation strategies were ranked first and second; the use of customer experience as a design principle for new products and services was the third most helpful factor. All of these were well ahead of having the necessary financial capital, which ranked sixth.

·         Getting the right partner to help: To deploy new digital capabilities and accelerate the pace of digital transformation, service providers are looking to share the challenge with partners, the study suggests. In the next 12 months, 43 percent of respondents in APAC say they will invest in managed services as part of their transformation in order to enable solutions for new areas. In general, IT services vendors are ranked as the most valuable partners for the execution of digital transformation projects, ahead of specialist digital consultants (second). Systems integrators ranked third together with third-party players specializing in standalone digital solutions. Strategy consultants ranked fourth together with managed services vendors and network equipment vendors ranked fifth. These findings suggest service providers are looking for partners who can deliver a wide range of expertise.

·         Business agility and delivering an omni-channel customer experience are immediate priorities: According to respondents in APAC, providing an omni-channel experience across services is the most critical capability for service providers’ survival in the digital age. Business agility ranked second most critical capability together with the ability to drive business innovation. Business agility also ranked second in terms of service providers’ digital transformation business priorities in the next 12 months (57 percent of respondents), with revenue from existing services ranking first (71 percent).

“The majority of service providers today are actively working to deploy digital technologies to improve their businesses, but this is happening without a unifying top-level vision and strategy. They are also telling us they are struggling to re-align processes and re-train staff at the same time, further delaying real business outcomes,” said Andy Hicks, research director, Telecoms and Networking, EMEA at IDC. “They may be able to keep up with other service providers, but they don't think they can keep up in the broader digital world unless they address gaps in digital strategy, skills and leadership. Our research suggests they will source professional services to bridge some of these gaps.”