Greenfield approach: launch fast a digital telco experience

Paolo Colella
August 1, 2022
As the current crisis pushes digitalization on the top of the agenda for businesses and public organizations, it seems the right time for Telecom Operators to finally shift their focus towards a fully digital Telco business model.

The benefits for the Service Provider are significant:

  • Align the customer experience to that of the digital best in class.
  • Empower the customer to take control of the service at all times.
  • Attain superior customer insight and build a platform for improved NPSand new revenue opportunities.
  • Use customers to get new customers (referral marketing).
  • Reduce the traditional focus on shops and contact centre, with cost-saving opportunities and new strategic options becoming available.
  • Set a path to simplify the technology and business legacy releasing significant cost and energy from the organization.

To create the right focus on building the future digital operating model, Operators should consider a greenfield approach as opposite to the “traditional” holistic transformation programs, that burnt large budgets and often delivered limited results.

A greenfield approach would also allow Operators to embrace more agile aaS technology options, that can enable the launch of a Digital Telco proposition in record times and at a substantially lower cost.

The increased importance of a Telco Digital channel

With a big part of the world population on lockdown, online commerce has marked a steep growth globally, and remote work has quickly become a large- scale option. In the space of a few weeks, we have seen unprecedented change in the way we live, work and learn.

A lot of this is not new, as for over 25 years, the Internet has been enabling new ways of doing business. What is changing now is the scale of adoption. Several weeks of lockdown, combined with the likely prolonged phase of social distancing measures that will follow, will drive a deep and wide digital transformation of society.

One of the key indicators of this change is the wide-scale adoption of online commerce. Bazaar voice reports that in April the e-commerce orders scored an impressive 96% year on year growth globally. And a growing share of these transactions is happening on the mobile device, which is becoming a pivotal element of the shopping experience.

Until the explosion of the Covid-19 pandemic, Telecom Operators’ main channels were shops and call center.

As Telco ́s review the online sales data from the last three months, they will likely take a more aggressive focus on online sales.

A new Telco customer experience is possible

Amazon, Netflix, Airbnb, Uber, and many other digital frontrunners have been setting new standards for customer experience.

Finding, configuring, and ordering products/services on our mobile at any time of the day has become the norm for many of us. And we expect same day or next day delivery for products, and instant delivery for anything immaterial, such as TV programs, music, and video streaming, or guitar lessons.

As a result, there are growing expectations that a richer Digital Telco experience should become widely available. And in fact, the main aspects of what it could look like are already emerging from the market and the forerunners.

1. Simpler product portfolio, more in line with that of the digital best in class

The customer subscribes to a tiered service package or builds his own, by combining connectivity components with additional services, including those offered by the OTT players (e.g. security, international calls, roaming, cloud storage, entertainment services…).

2. Customer empowered to manage the full-service cycle with no need to visit the physical shop.

As technology made remote identification possible, a traditional reason to visit a telco shop has been removed. The customer can enroll the service from an app or web interface and can make changes to her service profile at any time, moving up or down the tiers, adding or removing service elements from her custom package. With the wider availability of eSIM devices, the service activation will be immediate, and the enrollment  experience totally comparable to that of other digital services.

3. Customer-centric loyalty and growth mechanisms:

As all interactions are tracked digitally, customer data would be much more consistent and would establish a powerful platform to personalize and constantly improve service and product portfolio.

Real-time customer data would also help to create a better picture of each individual customer and enable the creation of automated and personalized actions, context-related promotions, triggered by individual customer scenarios, with a great potential to improve NPS.

Additionally, as it ́s common in the e-commerce world, embedded referral marketing capabilities would create incentives for customers to bring new customers onboard, creating stickiness for the service.

4. Transformation of the physical shop

As the strategic fight moves from the high street to online, Operators have increasing options to review their retail strategy and either leverage the physical shop as a competitive advantage or streamline their high-street presence.

5. AI-assisted customer service reducing problem resolution time and call centre cost

Access to customer service would also happen through the App, and the customer would be assisted first via FAQ and Chats. He would still be able to request a call if he gets stuck with a problem he cannot resolve. In this case, the agent placing the call would have a comprehensive picture of the customer situation and would be able to deliver a much faster resolution to the customer’s problem. An improved customer service, delivered with fewer calls and shorter resolution times, would also mean lower Call Centre cost.

What is the current situation?

On the market, there are examples of Telco ́s moving towards the outlined model. The most notable ones have been produced by either MVNOs or by digital flanker brands launched by some of the larger telecom operators (one example is Yoodo, owned by Axiata/Celcom in Malaysia,

The big question is how can more Service Providers shift to a convergent digital model overcoming the complexities and cost of “traditional transformation”. Over the past years, many of them engaged in large and ambitious initiatives, aiming at reforming their channel strategies, increase automation of their business processes, and modernizing the large and costly IT legacy.

Despite the large budgets, many of these projects delivered only limited results, while often incurring large cost overruns.

The main reasons were:

  • Lack of in-house Digital business and technology expertise, and often lack of a coordinated Digital Vision for the company (more boldly “How would we build ourselves in 2020 if we could do it from scratch and based on what we know now?”).
  • Broad focus, without a clear set of priorities.
  • Reluctance to simplify the product portfolio (from thousands to a few), for the fear of disrupting profitable pockets of customers sitting on high margin plans.
  • A focus on Omni-channel often addressed with too complex technology solutions, where the online channel was often treated as a disjoint add-on instead of the future centre of action.
  • Choice of Technology and Systems Integration partners with a large stake in the BSS and CRM legacy.

For these reasons, these projects often ended with very large and complex migration efforts and significant amounts of SW customization, leading to higher budgets than expected and high lifecycle costs. What is worse, only a few of these projects produced a step change towards a customer-centric model and an experience comparable to that of the leading digital players.

An alternative approach to Digital Transformation

In order to focus all the efforts on building the future wanted operating model, rather than compromising with the legacy, one alternative approach would be to build the new digital business as a greenfield.

This would imply establishing a new Digital Telco service model, with a separate product portfolio and a dedicated technology front end.

There are several potential ways to achieve this “fresh start”.

One, that was mentioned above and that has showcased around the world, is the establishment of a digital flanker brand.

The positive side of this approach is that it enables a bald move, the creation and experimentation of a modern and disruptive business model, with a limited impact on the existing business and brand.

On the flip side, the flanker brand ends up soon competing in marketing budget and focus with the main brand and it inevitably faces saturation without producing a digital shift in the main brand perception. To avoid that, the Operator would have to stepwise extend the model to the main brand.

An alternative approach would be to launch a “digital-only” offering under the operator’s main brand umbrella.

This alternative would have the advantage of driving a digital shift of the main brand.

Following a successful introduction, this approach would allow a smooth transition, during which existing customers would be progressively invited to join the new service and commercial model.

This second option would require careful management of the coexistence of the new digital offering and the legacy business, in particular in the point of sale and at the call centre, until the digital model establishes as the final operating model and the legacy can be phased out.

How can technology help?

A streamlined product portfolio and the greenfield approach create a unique opportunity to implement the Digital Telco model via a leaner and more modern BSS and CRM SaaS solution.

A new stack should be much more focused on enabling and orchestrating the key elements of a new digital operating model:

  • The publishing of a compelling digital telco product portfolio
  • A seamless customer experience, where the end-user is empowered to take control over his service
  • The mechanisms to increase loyalty and consumption, based on customer data
  • An omni-channel model where the online channel is the pivot and the shop and call centre are optional or play a support role
  • A modern and leaner customer service model that delivers shorter resolution times at a lower cost

Cloud-native technology allows the implementation of a Digital Operating model in shorter times and at a fraction of the cost of traditional BSS and CRM providers.

The choice of the technology partner also plays a critical role in departing from the complexity and cost of the legacy, and in embracing the speed and the impact of modern digital technologies.

So far, the choice has gone to a small number of large and established players, selected for their muscle and for their ability to “absorb” the impact of difficult projects, which per tradition have the potential to generate unexpected volumes of work and large cost overruns.

But is this choice still the right one in 2020? Will players driving a large portion of their profit from the legacy really be incentivized to accelerate its sunsetting?

If we agree that large migration and customization projects are belonging to the past, an additional benefit of embracing a greenfield approach to digital business transformation is that it can make space for smaller and faster players that can deliver substantial innovation and have no fear to create beneficial disruption.

Finally, the choice of a smaller player creates more space for the Service Provider to take a stronger leadership role in the process, and to create the necessary focus in the organization to build the culture, and the business and technology skills to take full control over its digital future.

Do you want to have a chat with Paolo during the Digital transformation World 2022? Book a meeting here.

Paolo Colella

Advisor - Global Sales and Business Development

Paolo Colella is a business and technology advisor, with over 25 years of experience in Digital Technologies, Telecommunications, and Professional Services.