Why The Time Is Right For The Global Telecom Industry To Engage MSPs
By Richard Ullenius, Vice President of Managed Services, CSG International
According to Gartner’s 2016 CIO Agenda Survey, CIOs expect digital revenues to grow from 16 to 37 percent in the next five years, and public-sector CIOs predict a rise from 42 to 77 percent in digital processes. What this means is — with very few exceptions — businesses of all types are feeling the impact of consumer demand for digital services, and are looking to digital to extend the way their business interacts with its consumers. From a refrigerator alerting its owner that it’s time to buy more milk, to distance learning, e-healthcare, and even the ability to watch episodes of a TV series on a flight, digital services are transforming the way that consumers live and work.
Digital services are transforming all industries, but especially telecom. While consumer use of bandwidth and digital content such as movies, TV series, and music across a myriad of devices has skyrocketed in recent years, telecommunications operators have found themselves at the crossroads of trying to keep up with the pace of change while also maintaining the quality of their existing services.
There is a common misconception that to become a Digital Service Provider (DSP) is little more than an IT transformation. In reality, it is much more and requires a full business transformation in the way that people, process, and technology align to support the digital consumer alongside more traditional operations. While an IT transformation sometimes does require investments in new systems, the focus for digital transformation needs to center on investing in new ways of thinking and strategy first, followed by what systems and processes will support the new strategy.
Transforming an entire business is a complex and highly-involved process. According to a Gartner survey, only 14 percent of business leaders report having “fully migrated to all intended areas of their digital transformation plans.” In addition, IDC predicts 60 percent of digital transformation initiatives will not be able to scale because of a lack of strategic architecture. Clearly, there is more work to be done to realize operational efficiency of both digital and traditional services.
Enter the new breed of MSP. MSPs have come a long way in recent years, especially in the telecommunications industry. With the integration of the cloud in particular, MSPs are transitioning away from selling traditional IT and communication services to their customers, and evolving instead to offer full solutions designed to address a telecom operator’s most pressing business-level issues.
With the rise of the cloud, MSPs are able to provide their customers with the opportunity to build their digital disruption strategies supported by more efficient operations, while keeping the digital customer experience on the leading edge.
Where The MSP Adds New Value
Improved customer experience is top-of mind for every CSP, and increasingly, MSPs are becoming a key enabler to align the teams, information flow, and systems to support an experience that will create repeat business.
To verify this thinking, we conducted a survey with Pipeline Market Research to poll CSPs worldwide about their ability to transform their businesses for digital services using their existing, in-house resources. CSPs responded that “strategic transformation of existing business model, teams, or skills to support digital services” was their top organizational concern related to digital transformation. They also noted “technology to support new digital services” as their second highest concern, and “processes to support new digital services” as their third.
MSPs were well positioned in the CSP community as the sentiment for using MSPs to augment both internal resources and expertise was very positive. Almost all the CSPs surveyed (97 percent) indicated they would find value in a third-party, managed service provider. The majority (68 percent) said they currently rely on third parties, and 56 percent are considering either using or increasing the use of third parties in the next 12 months. The majority of CSPs said they would recover between 10 and 50 percent of their existing team’s time by using a third party to manage their Business Support Systems, and a significant portion (13 percent) said they would recover more than 50 percent of their team’s time to focus on innovation by doing so.
To align a CSP to support current operations alongside the need to innovate to reach new customers with digital services, an MSP should develop an approach that will:
- Prioritize The Customer Experience
Consumers have so many choices to purchase the same content from many different providers, and often it is the alignment of the CSP’s organization behind the scenes that becomes a differentiator in the content-buying experience. Top-notch customer experience means staying agile, investing in the right technology, and increasing engagement.
When it comes to new digital services, CSPs are often in a state of experimentation, learning from trial and error, so it is crucial MSPs are positioned to provide the capabilities that empower the CSP’s business to perform these activities. The MSP’s staff can save the CSP from the need to find and hire highly skilled or specialized IT people in-house to align with a new service, and often, this difference alone can speed the process from development to launch.
- Increase Efficiency And Competitiveness
Organizations that try to do all IT services in-house themselves can have much higher research, development, and implementation time, all of which increase costs and decreases time to market. More importantly, it detracts the CSP from focusing on its core business, which is ensuring highest levels of network capacity/quality and a premium customer experience.
- Enable Fast Implementation Of New Technologies
MSPs can often provide an appropriate level of resources to start and implement projects, where handling the same project in-house might involve weeks or months to hire the right people, train them and provide the support they need. For most implementations, quality IT companies will bring years of experience and domain expertise, to save time and money. - Reduce Risk
Every business investment carries a certain amount of risk. Markets, competition, government regulations, financial conditions, and technologies all change very quickly. Managed services programs assume and manage much of this risk, with specific industry knowledge, especially security and compliance issues.
As MSPs become more established in the operations of DSPs, the conversation at the conference table will no longer be about what the MSP can do, but rather what else they can do. As survey results show, there is belief in the market that expanding the role of the MSP can ensure that telecom operations are aligned for both today’s and tomorrow’s services. The MSP that can strategically align internal teams, processes and technical operations to support both legacy and digital business models will be best positioned to be a strategic partner, not just at the technology level, but at the executive level as well.