Managed services is a business segment that is not often under the harsh glare of the transformation spotlight. Simply outsourcing large elements of an operator’s network to a third party is no longer an excuse to delay or avoid the need for the network and internal processes to undergo a thorough overhaul.

Being one of the leading managed service providers with around 30 per cent of the global market, Huawei is determined to offer its customers the opportunity to implement a digital transformation, while recognising that it needs to put itself through the same process.

The company’s Global President of Managed Services, Leo Lu, goes further, believing the entire telecoms industry should go through a transformation exercise.

“Many within the business sector have seen the pace of change within the giant internet companies and have realised that working with a managed service provider can help them achieve rapid progress to stay abreast,” he said.

“What is key to any transformation project is to clearly define a roadmap. This can take 12 months to generate and will include which areas of the business can be digitised, what can be simplified, where extra intelligence can be added and what can be fully automated.”

But any plan would fail if no thought is given to how the telecom operator can successfully change its traditional working culture. “This is the biggest challenge, and one we also face within Huawei managed services,” admitted Lu.

“We recognise that our own staff need to be persuaded, incentivised and motivated to adapt to this new transformed business model. I think we’ve successfully converted around 30 per cent of our people to this new way of thinking and working.”

Huawei has succeeded in gaining a significant share of the managed services business, having only launched the unit in 2015. Lu claims the company is the leading provider of managed services globally, a rating confirmed by a recent study conducted by ABI Research. To be fair, Huawei is neck-and-neck with Ericsson, depending on how ABI measures particular aspects of the marketplace.

Regardless, ABI states that Huawei had been the fastest growing managed service provider, and according to its estimates, its managed services revenues delivered 75 per cent CAGR for 2006 to 2013. Huawei also claims never to have lost a managed service renewal, according to ABI.

While Huawei is keen to grow its managed service business across the globe, it recognises that it must remain transparent to its customers with regard to its own capabilities.

“A key question we ask any customer is who can best create real value for the subscriber and not just deliver a series of KPIs? We see ourselves as providing a very strong partnership and being able to optimise and enable business growth. But operators themselves have critical attributes by having a direct relationship with the subscriber and providing connectivity, a strength that’s often overlooked or forgotten.”

Of note is the assertion from Lu that his development engineers need to help their operator customers launch modern, fully digital apps. This calls for the Huawei engineers to recognise what mobile subscribers are wanting and react accordingly. “So, our engineers need to become app developers.”

This acceptance that Huawei needs, and is, undergoing a cultural change is also seen with Lu’s claim that operators looking for a managed services partner don’t really care if they are the global leader or not.

“Our customers are not bothered if we’re number one or number two in the market. They are more interested in the value we as a partner can bring to the table. We believe are key attributes are innovation, a transparent business model and the fact we can add value to our customer’s business. We only become involved where we can add value.”

However, while Lu remains fully aware that managed services is a fiercely competitive business, he welcomed any new entrants. “We enjoy competition, it helps to keep Huawei young and agile. But we continue to move forward rapidly and remain close to our customer base.”

This will also see the company partnering with a broader set of technology vendors – accepting that its expertise doesn’t cover every aspect of the telecoms industry – to create a viable and healthy ecosystem for managed services.

“This is becoming a broader and more dynamic industry. We will continue to invest in people and bringing new technology to market. Our ROADS (Real-time, On-demand, All online, DIY and Social) initiative is an example of Huawei’s approach to how operators can approach digital transformation, and we would advise telecom service providers to not ignore the significant impact a ROADS strategy will have across their entire business.”

Lu pointed to a recent internal communication within AT&T: Adapt or Else, and says Huawei is doing something very similar itself. “We’ve got to find more efficient ways of running our business for the greater benefits of our customers.”