The Horrors of Failed Transformation Efforts Ring Loud in the Memory
October 27, 2021 - Julia Hogarty
Many operators have been spooked over the years by big transformational initiatives that promised to revolutionise the business failing to materialise in any meaningful way. Instead, these projects too often became significant sunk costs and an insistence not to be stung twice bedded in across the industry. With 5G, we are looking at a complete transformation of the network and how services themselves are delivered.
Telcos have been stung a few too many times by large-scale transformation projects. From digitizing internal operations to transforming the underlying infrastructure of the network itself, the drive to introduce new and improved efficiencies continues to haunt operators worldwide. As a staggering 70% of large-scale transformation projects fail, it’s no wonder businesses are tentative about re-engaging with similar initiatives. Risk versus return, as the age-old adage goes, is the weigh-up operators continue to face, and gauging this delicate balance all too often stymies the motivation to jump into yet another transformation project.
The dawn of the digital transformation age presented a lot of opportunities to embed new process models and deliver new and exciting digital services to the end customer. However, business transformations are complicated and messy things. What in concept sounds good, may not always translate in practical terms. Instead, many operators chose to focus on the potential market gain and launched digital second brands to capitalize on the burgeoning appetite for novel digital offerings delivered through pure digital channels. This allowed operators to maintain market share while limiting the impact on core business as the digital stack stood apart from the delivery of existing services and relied on its own dedicated network resources. This was one workaround that exemplified the hesitation to shift to a full Digital First strategy.
5G presents a completely different playing field. One which telcos cannot work around. For a start, the types of new immersive consumer services that will allow operators to compete in a 5G market can only be realized with significant improvements to the underlying network latency. The ability to make hay from new B2B2X type applications will also be highly dependent on a re-architecting of the network to be efficiently utilized for a wide array of new industry verticals reliant on IoT. The ultimate nirvana of network slicing, where self-contained network instances or slices are spun up in a matter of minutes for the delivery of specific services and spun down when the service is retired, is not that far away. For all these reasons operators are embracing the move to 5G, albeit at different rates, and we can anticipate an exciting few years ahead as the role of connectivity in global life is reimagined.
Change at this scale takes considered flexibility and there is no doubt that operators will need to manage a hybrid network environment for the foreseeable as the new 5G landscape hardens in form. This will mean bridging 4G and 5G networks and all the inherent complexity that comes with managing distinct services across two different generational technologies. So rather than a rip-and-replace type transformation, the reality will be far more complicated for operators and it will be the role of the vendor community to simplify network operations and enable the harnessing of continued value in a hybrid environment. The support of a ‘multi-x’ reality will be paramount where services are managed and monetized across a multi-network, multi-cloud, multi-vendor, multi-domain environment. Sustaining value from a transforming technology ecosystem will be a challenge yet enabling a hybrid strategy means that it is one where the reward outweighs the risk for once.