Implementing Digital Capabilities Successfully
Building robust digital capabilities can deliver huge benefits to Digital Service Providers (DSPs). A recent TMForum survey shows that building digital capabilities (including digitization of customer experience and operations), is the highest post-pandemic priority for DSPs. These digital capabilities can improve EBITDA and customer satisfaction by up to 30% and employee satisfaction by more than 50%. At the same time, it can reduce operational waste by as much as 50%.
Fig: Effect of Covid-19 on digital transformation
The painful reality is that most DSPs fail to unlock value from digital initiatives due to poor implementation strategies
A Mckinsey research shows that 70% of complex digital initiatives fail to reach their stated goals due to the gap between strategy formulation and strategy implementation. An incorrect implementation decision taken at the beginning of the project can increase architectural technical debt and cause expensive repercussions in the long run. Lack of insights in the implementation journey makes it difficult for DSPs to answer tough questions such as: Where to start? How to start? How to get a head start?
This mandates DSPs to plan their implementation much more methodically to unlock full value and maximize their limited resources.
Key focus areas for successful implementation of digital capabilities
Use a customized digital maturity assessment framework to critically evaluate and implement telco-specific digital use cases
A customized assessment framework can be used to critically evaluate the current maturity level (low, medium, high) for digital capabilities and the underlying enablers to plan the transition steps.
Fig: Customized digital maturity assessment framework
Establish a clear digital vision
A generic vision statement can be ambiguous and difficult for people to buy into and act. Creating a vision that’s meaningful and easy to understand, is actionable. Project vision should provide tangible capabilities with concrete examples.
Focus on business priorities like revenue growth, customer satisfaction, and operational efficiency to be truly transformative
Resist jumping straight to solving technology-related issues – This might lead to a lengthy IT modernization project that may not address the business objective. Instead, clearly understand the desired business outcome and plan initiatives that centre around it.
Set up a clear transition architecture to smoothly upgrade the maturity level. Avoid design pitfalls that can degrade performance in the long run
Fig: Transitioning from current to target architecture
In a typical current architecture, either the frontend or the backend or both are typically blown-up, and the logic is scattered across. The integration layer is usually very thin, with minimal or no logic. Further, the backend is often adjusted to serve the frontend. This highly convolutes the backend design and its responsibilities.
An ideal target architecture should have all the layers in proportion and logic residing in each layer with clear boundaries and responsibilities. The required logic should be built in the digital enablement layer to serve the frontend requirements. The backend should focus on serving the frontend but not necessarily adjusting to it.
During the transition, it is important to support both the current and the target architecture parallelly, to avoid any negative impact on the business and customer experience. To do this, it becomes crucial to understand the entire customer journey and focus on a complete end-to-end use case. Consider options that work cohesively in the journey. E.g.: While transitioning usage/invoicing journey, fix the whole journey and not just the single API or a single screen/page/function.
3) Define clear demarcations and layering to create a balanced architecture. Solve the logic in the right layer to avoid creating a top-heavy or bottom-heavy architecture
A digital enablement layer should bridge the UI and backend. When required, it should combine multiple sources, add business logic, translate, and present to the UI layer.
The backend can have different patterns, such as a single backend with no required logic for transformation (e.g., getting customer details from the CRM), or a single backend with required logic (e.g., getting the product details but only displaying the data bundles), or a multi backend with required logic (e.g., getting customer details from two BSS). For some backends, business logic and translation are required. Here, the digital enablement layer should focus on hiding the backend complexity and do the required translation. Backend should only focus on exposing the data but in a format and logic that belongs to the domain.
The frontend too can have multiple patterns. E.g., in the app, only the first name of the customer is displayed, while on the web, the full name is shown. For partners, it is required to limit their search capabilities to prevent them from searching customers they don’t ‘own’. Here, the digital enablement layer should focus on abstraction and serving the frontend. Presentation differentiation across technology platforms and/or user groups can be done in the UI layer.
4) Use industry standards and best practices to guide the implementation
Building the front-end, core and integration capabilities from scratch can become a daunting task for DSPs. Thus, it is crucial to leverage the right industry standards that can give a head start and save a lot of time and effort in the process.
Key standards for frontend capabilities
- Implement a headless architecture that is lean and allows greater flexibility in developing applications.
- Build mono-repository for all apps like Angular, React, Node.js and web components. This promotes transparency, reuse & collaboration, reducing future development and maintenance effort. Use domain-driven design to ensure scalability.
- Develop design systems to support consistent user experience across different brands.
Key standards for core digital capabilities
- Use TM forum open APIs to enable interoperability and seamless end-to-end management of complex digital services.
- TM forum information framework provides standard definitions for all the information that flows through the enterprise, in-between the service providers and their business partners.
- Open-source software projects like the Open Web Application Security Project (OWASP) foundation ensure digital security across the IT stack.
Business benefits achieved by a leading DSP in Europe after the successful implementation of digital capabilities
Leveraging the key focus areas detailed in this article enabled the DSP to overcome complexities, generate higher value and improve customer experience.
- Increased annual channel portal revenue by 50%
- Reduced time-to-market by 35%
- Increased sales conversion rates for e-commerce channel via the portal by 20 – 30%
- Increased mobile app rating from 3 to 4.7
- Improved Net Promoter Score (NPS) by 3X
I thank Sumit Thakur, Senior Manager – Strategic Insights, for his inputs in shaping up this article.
By Derrek Schutman