Which Way Telcos?

There is no improving the future without disturbing the present – Catherine Booth

 Corporate folly is bringing in an expensive resource from outside to manage people executing roles that the expensive resource has never executed in their life. It reduces the firm’s propulsion as efforts are not aligned in the orchestra, which impinges and impales morale of those putting in honest competent work.

On the flip side, many bosses are doing the work of their juniors because of the dubious ways through which they brought in that unqualified person for a role. To cover the ineptitude and incompetence of their appointee they do the job themselves in addition to doing their own work. 

But that wasn’t today’s Q and A.

This past month I was privileged to sit in a strategy think tank of a telco that’s considering investing in East Africa, and asked to draw from my experience in answering the question: How do telco enterprises transform into nimble technology units fit for today’s relevance? And why would they even want to make this transition?

Because telecommunication service providers need to expand their service offering beyond voice, data, video channels and internet access, as there is almost total market saturation on the provision of connectivity and communications capabilities now. The untapped market got tapped and became a commodity and a basic need. Simply put, Telcos stand at a crossroads. Their markets are by and large, fully penetrated, forcing established competitors into increasingly zero-sum price battles for share. New entrants, from hyper-scalers to billionaires backing satellite constellations, are joining the fray. Revenue growth has slowed. Margins are slim and shrinking.

So exactly what do techcos look like?

• They build solutions for their customers, not look for customers for their solutions. Product owners are in the customer’s face and in the marketplace daily. As are the rest of the team members. By default acquisition strategies are product-led, not sales-led.
• They collaborate tightly across this one enterprise unit of different functions; everyone has skin in the game.
• Incentive still drives our behavior. There is a clear compensation structure across the customer journey, from the lead generator to the in-life relationship executive.
• They leverage data-driven decisioning based on solid insights to enable quick turnaround and great customer experience.
• At their core is a talent/people aspect that props up skillsets and competencies that enable positive tension both internally and externally for collective growth, and rewards tangibles.

This transition needs telcos that have the vision and wherewithal to shoulder the investments in software and platforms needed to fuel the rapid innovation of other software and platforms. The goal is to enable new, more lucrative business opportunities built on their intellectual property and their own platforms rather than reselling vendor offerings. Crucially, that builds telcos a competitive advantage rather than leaving that advantage to the vendors they’ve historically relied on.

But how does a telco get there?

Dual focus, first on operational excellence to retain revenues from the bird in hand by operating with maximal efficiency across the board. This increasingly requires the clean core of a cloud-based ERP to standardize and automate backend finance, procurement, HR, sales, and other processes.

Secondly on business-model innovation to layer growth and sustainability. For example, the tens of legacy finance platforms must be moved to a unified cloud platform. In this day and age how can customers be sent a separate invoice for each service that they consume? This step would obviously boost productivity, open doors to strategically valuable insights previously masked by IT complexity and save millions of dollars annually. And the planet. That’s besides the business case of enabling the integration of cloud-based employee, contingent-worker, talent-acquisition, and customer-experience systems.

The key areas to address are a dime a dozen, but indulge me on a handful:

1. Redefine the core business.

• By shifting from Connectivity to Solutions: Move beyond simple connectivity services (voice, data, internet) into comprehensive, technology-driven solutions for enterprises. The new focus areas have to encompass techcologies such as: Cloud services; IoT (Internet of Things); Cybersecurity; Analytics and Artificial Intelligence; Industry-specific vertical solutions

At the core of these solutions is enhanced diversification of options for customers to drive volumes while leveraging networks and ecosystems for new revenue streams. Telcos with a strong core have a massive advantage as they can sweat their assets.

 2. Develop a Techco-centric culture

• By fostering innovation: Create an environment promoting experimentation and calculated risk-taking. Encourage agile product development and rapid iterations. Telcos abhor failure; techcos embrace it and elevate from it.
• By attracting and retaining Tech talent: Invest in recruitment and upskilling of digital talent or simply put, staff with expertise in software development, cloud engineering, data science, UX/UI, and relevant technologies. The elephant in the room here remains incentives. The biggest contrast I experienced moving from telco to techco was how techco was aligned to reward every effort that brought revenue to the business. It was common for pre-sales and project managers to drive deals because they knew what was in it for them. By the same vein it wasn’t unusual for deal managers to exclude account managers from the takings of an opportunity where the AMs had not appropriately applied themselves to the hunt.
• By embracing partnerships: Actively collaborate with startups, tech companies, and research institutions to accelerate innovation and access new skillsets. Some possessive grounds must be ceded, including the crippling know-it-all attitude prevalent in middle management as well as upper echelons of traditional telcos

3. Revamp operational models

• By embracing cloud-native practices: Build new offerings with a cloud-first mentality, prioritizing scalability, flexibility, and cost-efficiency. Connectivity will not be bread and butter forever, but it is the rails on which transcontinental trains and attendant revenues will move.
• By adopting Agile methodologies: Implement DevOps principles for seamless collaboration between development and operations, facilitating faster release cycles. This adoption seems to be gathering steam industrywide, but their outputs must be meeting an identified and proven need in the marketplace, not a tick-box on the race to churn out the most products. Additionally, Agile for sales teams feels like a misnomer. Organizational proprioception may be more like it.
• By driving customer-centricity: Place the customer experience at the forefront. Prioritize user-friendly interfaces and personalized solutions. A prime example of AI usage at its most basic? Telcos hold massive troves of data on their customers; insights from this data should provide the platform for exceptional personalized experiences for the customer. And relevant solutions.

4. Build a robust Technology stack

• By investing in modern infrastructure: Upgrade legacy systems, adopt cloud-based platforms, and explore technologies like edge computing for enhanced performance and scalability. The dog food we produce must be palatable. The digital disruption must happen internally as well. Techcos do not pass around paper documents for signoffs, nor spreadsheets to track basic sales activities. Technology is at the forefront of driving change, but it is people who make the transformation happen.
• By leveraging data as an asset: Establish robust data governance and analytics capabilities. Turn insights into actionable intelligence for improved decision-making and customer offerings. I cannot belabor this point enough.
• By embracing an API-driven approach: Design services with open APIs, enabling easy integration and fostering a robust partner ecosystem. We don’t have to own everything or make the most money from everything that we jointly take to the market. We also don’t all have to be FinTech.
• By investing in Research and Development: Partnerships are not restricted to ICT firms alone; academia is also rich in applicable knowledge. Hackathons foster real solutions addressing existing as well as anticipated challenges. As you leverage your assets to gain a foothold as a budding techco, a robust R&D unit is imperative. 

5. Re-evaluate Sales and Marketing

• By pivoting to solution-based selling: Train sales teams to articulate the value proposition of technology solutions, not just connectivity products. Training for the sake of training and certification counts for nothing where there are no conversions. Competencies in security, privacy and compliance cut across all business facets. Generative AI is helping techcos to improve customer experiences, convert prospects and identify new cross-selling opportunities.
• By targeting market expansion: Adjust messaging to attract new enterprise customers seeking comprehensive technology solutions. The telco mentality will not die a natural death; it must be starved by setting and releasing a tide of standards and expectations that have to be met in the marketplace, thereby elevating the necessary engagements. What we feed grows and what we tolerate thrives.
• By optimizing digital marketing: Leverage online channels for lead generation and customer engagement tailored to tech-savvy audiences. These cannot be run by retail teams but rather from within the enterprise unit. How interactive is our website for example? What insights can we garner from it? How responsive are our enterprise social media handles?

The overarching considerations for a successful functional transition remain:

• Leadership Buy-in: Senior management must exhibit strong support, essential for driving change throughout the organization. It won’t happen if management itself is only paying lip service to internal transition and fears the gung-ho attitude of a technology environment. It will take nothing short of a revolution in skills, culture, business models, risk taking, customer awareness, partnering and operations – amongst other areas.
• Change Management: We all fear change, yet it’s the most constant of corporate happenings for businesses that are alive to their operational environment. Rather than give fancy names to policies and strategies, simply address potential resistance to new ways of working and provide support and training for employees. The old guard has institutional memory which when synced with new-age execution is a potent mix. This explains why great salespeople in successful techcos keep being recycled.
• Measured Transition: Avoid abrupt upheavals; adopt a phased approach to minimize disruption and maximize chances of success. A start-up mentality will help. Systems, processes, culture, people. A telco is a battleship where a techco is a pirateship. This understanding solves a lot of problems before they occur.

The customer is the most important asset in the tech ecosystem, which makes the account/relationship manager the most important cog internally. This is the reason why techcos hold their salespeople in highest regard and are also the best-compensated especially due to their variable income.

Telco, techno, techco or whatever other name the rose goes by doesn’t matter. The firm just need to ensure the correct infrastructure is in place to respond to further industry evolution and marketplace dynamics. At the core of this will be software that makes it easy for them to launch new products, configure product bundles, go to market quicker, and streamline sales processes and people environments to convert more deals. Telcos without capital, brand recognition and trust are already disadvantaged in the transition.

Ultimately this transition is a journey, not a one-time event. Nor does it really end, considering the rapid changes that technology undergoes. The honchos must take the lead in articulating the vision, building the right ecosystem, and driving the culture change to accept more risk, adapt with more agility, innovate faster and focus on the customer. Continuous learning, adaptation, and a commitment to customer success will be crucial for the telco’s enterprise arm to thrive as a leading technology unit. And calling a log a crocodile doesn’t make it one. Whoever delivers the best experience and value ends up owning the customer. And value is defined by the customer.