Transformation lies at the heart of most telecoms operators’ strategies but change at companies is painfully slow. This report explains why agility and innovation – the goals of transformation – will remain elusive until CFOs adopt new resource allocation models at their organisations.
The telecoms operator’s conundrum – how to break the service innovation status quo
Telco CFOs need to upweight telecoms R&D investments to drive differentiating service innovations. If they don’t, telcos will recede further into the category of low yield, low growth commodities.
The relationship between a company’s financial and commercial model is complex:
- The financial model determines the commercial model of a company – what commercial goals it is able to pursue and how it is able to pursue them
- But the commercial model also feeds directly back into the financial model of the business and determines how resources are allocated
The interrelatedness of commercial and financial models means that change is sometimes difficult – a ‘chicken and egg’ situation occurs in which each model relies on change in the other before it can change.