The human element emerged as a key theme during discussions of business transformation efforts at Huawei’s Operations Transformation Forum 2018, as executives also touched on mobile’s central role in enabling Industry 4.0.
During the event in Munich, attitudes and skills both in the C-suite and among project teams were highlighted as essential elements in transformation success. And while this presents challenges, Huawei chairman Hua Liang explained in his opening keynote that these must be overcome to deliver future success – particularly as 5G dawns.
He noted businesses which fully embrace digital technology enjoy efficiency and reliability benefits which, in turn, deliver the cost savings which are central to improving profitability. Other benefits include agility in delivering new services and in capturing digital opportunities – enabling operators to achieve top-line growth as well.
The executive also noted that in a typical digital transformation project, “it takes at least 18 months to get through the toughest period”. But as we move into the 5G era, and as operators embrace cloud and virtualisation technologies, transformation is no longer just an option.
Company culture was cited as a key factor in the process of transformation. Jean-Claude Geha, chairman of DT Pan-Net, said projects will fail if companies do not have the right mindset, regardless of their strategy or level of investment.
“You always encounter resistance”, he explained, noting that technology staff “tend not to want to let go” when companies deploy cloud services due to concerns over a loss of control.
Deutsche Telekom created Pan-Net as a separate entity to circumvent some of those challenges. The approach enables the operator to “build-out fast and hire with the right mindset”, Geha explained.
Bouke Hoving, chief technology and information officer at KPN, echoed this, describing its work in creating a new culture as a “deciding factor” in its transformation success. This included hiring new staff for digitalisation projects who were “given a huge mandate, and only worked with cloud technology: particularly open source.”
Michael Haberle, director of transport and fixed access at Telefonica Deutschland, said that fresh approaches to network performance analysis and customer care by the operator involved more than just amending its processes.
Over the past two years, Telefonica Deutschland has developed Systems Observation Centres (SOCs) which the executive explained are more than just a tool to improve visibility of network functions: “It’s a change of philosophy; it’s a change of process; it’s a change of mindset.”
The SOCs are a radical change in approach, sitting at the centre of the network and connecting several departments including customer service, marketing, planning, and feedback and optimisation teams. This enables a holistic view of the customer in the network at that time, rather than based on historical data received one or two days later.
Haberle said Telefonica Deutschland embarked on its transformation journey for a number of reasons; key among which was to satisfy changing customer expectations of service quality regarding voice and data access.
But its hand was also tipped by its acquisition of rival E-Plus and the subsequent merger of networks and operations, which presented unexpected challenges in terms of the flow of information and problems with some services.
Changing the legacy
For China Unicom, a key driver of its transformation was a rapid rise in the number of 4G users and the associated jump in data consumption, Biota Sun, chief architect of network planning and optimisation, said.
This meant the operator’s traditional approach to network planning fell short: previously it took around 200 working days from planning to the final deployment of new services: “Obviously this is too long to meet the challenge of the quickly growing traffic,” he noted.
In partnership with Huawei, the operator developed a system named Smart Insight, which Biota said is a key element in delivering agile operations. The underlying business model uses big data analysis and artificial intelligence (AI) to examine operational and business domain data, giving the company real time insight into user experience.
“China Unicom has now developed a highly automated and efficient process from identification of optimisation needs, capacity expansion…to automatic solution matching,” he said.
And with data services “almost free” because of competitors offering unlimited tariffs, user experience has become a key competitive driver, making it essential for operators to have objective and real quality of experience indicators.
Collaboration also forms a major part of Turkey-based operator Turkcell’s approach to transformation, CEO Kaan Terzioglu said, pointing to discussions with around 30 other operators by its Lifecell Ventures unit designed to share its digital services know-how and technology.
Those operators span the globe from Southeast Asia to the Caribbean, he said, explaining discussions centre on how to create digital economies in each country. Terzioglu noted operators in emerging markets “may not have 1,000 R&D engineers” on hand to drive transformation projects through, with Turkcell itself having shifted staff from “playing with hardware” to service development.
The CEO explained operational transformation is an essential component in any operators’ business, noting the move has “been the recipe for success” for the company, fuelling revenue growth of 52 per cent over the past two years.
Hong Kong operator HKT has taken the partnering ethos one step further, teaming with Huawei to open its Digital Transformation Practice Centre (DTPC) to share knowledge with operators.
HKTs head of strategic wireless technology and core networks, Henry Wong, noted that collaboration among operators comes as they face competition from a wider range of players, such as “external competitors like the OTTs, who can do things much faster”.
Derry Li, VP of Huawei Consulting and Systems Integration at Huawei, said one of the main challenges facing operators is a “fear of failure” regarding their transformation. Other hurdles include lack of best practice, mismatched capabilities, long timeframes and high costs, he added.
At DTPC, a cross-function agile team consisting of operators, end-users, Huawei and third party partners will focus on transformation plans through five stages: Envisioning; Ideating; Prototyping; Realising; and Scaling.
Turkcell’s Terzioglu touched on another key area of the forum; namely that operations transformation is not restricted to the telecom industry alone. The growth of IoT and digitalisation technologies means that “in industry 4.0, we will be part of every industry’s value chain”. The operator is already working with companies operating in areas which will be key to Turkey’s future development, he noted.
Derek White, global head of customer solutions for bank BBVA, explained many financial services companies are equally as “crippled with the past” as operators. “Many of our peers are seeking to protect revenue streams, operating models, interaction models, experiences that fundamentally no longer exist, or will not exist in the future,” he said.
The lines between the way industries, ecosystems, individuals and companies interact are blurring, White said, adding the shift is most prevalent in the interaction models which have the highest frequency.
“If you see the blurring of chat, and social, and media, e-commerce, and then you throw in gaming, that is where humans are spending their time and their interactions. And that is then creating opportunities for businesses and industries to entirely blur,” he said.Subscribe to our daily newsletter Back