There are two possible interpretations of the phrase “the state of transformation”:
- How is transformation going at telcos, i.e. where are telcos on the path to transformation
- The condition of transformation, i.e. what does it mean to be in the process of transforming.
Over the summer of 2022, STL Partners carried out nine in-depth interviews with telco employees that were involved in influencing, coordinating, or implementing large change projects at their organisations. These change makers came from various disciplines: Strategy, HR, Transformation project management, Networks, Technology, as well as Research. Our first intention was to illuminate the first interpretation (where are telcos on the path to
transformation), but our findings suggest that transformation paths (and indeed end states) are unique to each operator, making it difficult to compare progress between telcos.
No one path – overlapping changes in multiple areas
Source: STL Partners
We have mainly come away with findings on the latter point – identifying the types of change initiatives underway and the challenges that change-makers are encountering on their journeys.
This report brings together insights from our interviews, contextualised with further information from secondary sources and ongoing conversations with operators, to give a sense of what telcos mean when they talk about transformation and what their challenges are in becoming more adaptable as organisations to find growth.
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Why is Transformation important to telcos
Far from being an irrelevant or out-dated concept, telcos continue to transform internally. Transformation is understood as a deep change initiative that might involve a shift in foundational technology or a broad-based change in the way an organisation does things, i.e. the culture, processes and the people required – or both.
Most commonly, transformation involves the integration of digital technologies/tools (e.g. cloud, automation, data analytics) into organisational processes to improve business outcomes – with an impact on ways of working (“digital transformation”).
Some telcos talk about transformation in terms of functional initiatives (e.g. IT modernisation), ostensibly affecting a subset of the business, while others talk about transformation from an organisation-wide perspective (e.g. a change in culture like Lean Six Sigma).
The common feature between telco narratives about transformation is that they are motivated by
trying to improve the organisation’s ability to achieve their future vision. This could involve:
- Making the business more efficient,
- Creating new value/finding new revenues,
- Improving outcomes for customers.
Transformations are also undertaken when the vision changes (e.g. when a new leader takes the helm). STL observes that interview respondents described technology-led transformations as aligned to efficiency benefits in the first instance, while organisation-led change was more aligned to responsiveness, particularly in relation to customer needs (improving outcomes). Respondents tended to describe combined technology- and organisation-led change initiatives when there was an ambition to do new things/create new value for customers.
The meaning of transformation – activities cited in interviews
Source: STL Partners
Respondents also mentioned:
- Transformation in the context of the industry, particularly the possibility that new technologies may change the shape of an industry (e.g. tech companies may find it easier to enter telecoms with their technology capabilities, while telcos may find it difficult to extend services up the technology value chain).
- The enterprise opportunity represented by digital transformation services.
These were not topics for further exploration in our interviews. Industry transformation is a topic for STL’s Executive Briefing Service – however the threat of industry disruption can and should be an inspiration for corporate transformation. Digital transformation services are covered in our Enterprise stream.
Table of contents
- Executive Summary
- Why is Transformation important to telcos
- Different change trajectories
- The condition of transformation – being in the process of it
- Where do telcos have transformation efforts underway
- How are transformation projects approached at telcos?
- Who is responsible for transformation?
- Barriers to transformation
- Change leadership issues
- People challenges
- Execution difficulties
- What is holding telcos back from being future-ready organisations?
- Out with the old…
- …In with the new
- Leveraging insight: The neglected strategic capability
- Vision stories: Getting the most for transformation
- The future of work: How AI can help telcos keep up
- Transitioning to techco in APAC: Priorities for success