Tag: management

Breaking down silos for telco adaptability

Dismantling silos and going agile

Traditionally, telcos have been managed top down and organised around the main functional units of network, IT, marketing, sales, customer care, finance and shared services (e.g., HR, legal, facilities). Each unit (silo) has had its own objectives, budget and systems, which may have come into conflict with those of other units from time to time and/or resulted in overlapping efforts and duplication of work. More recent thinking shows that there are benefits for those that can break away from siloed structures, but telcos have struggled to do so.

This report looks at the ways in which some telcos have approached the task of dismantling silos and going agile. The researcher was not an agile specialist but has experience of such transitions from a strategic perspective. For the purposes of this report, agile working is defined as a system of work where cross-functional teams are formed around critical tasks. Team members work towards a common purpose and are autonomous, allowing for fast decision making. A typical agile organisation structure comprises tribes, chapters and squads. The nuances of different agile models are not discussed in depth. The focus is to identify lessons and recommendations based on real-world telco experiences.

In each of the five case studies we address these questions:

  • Why was the action considered? What was the rationale for the telco to embark on the transformation? What were the key strategic drivers?
  • What was the process of change? Over what timeframe was the transformation implemented, and how was it achieved?
  • What was implemented? Which structures were used, and which parts of the organisation were impacted?
  • What were the outcomes? What were the successes and challenges faced?
  • What lessons were learned? What should other telcos consider when looking to breakdown silos?

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The silo situation

Traditional telcos divide employees into functional silos, grouping them based on their job titles, responsibilities and skills. These groups focus on group goals and tasks which can result in a “silo mentality” where information, resources and skills become trapped as there is limited incentive for communication. Figure 2 shows a typical silo organisation structure.

Typical silo organisation structure seen in telcos

Silos can inhibit organisational productivity and innovation, as many critical activities fall across multiple functional areas. For example, customer proposition development includes the activities of identifying needs and developing products, pricing, advertising, sales strategy, customer experience and care, subscriber acquisition and retention costs (device subsidies) and overall business casing/budgets (see Figure 3). Each activity requires collaboration between different functional teams, who may have different agendas – it also results in confusion as to where responsibility for customer proposition development lies overall.

Cross silo inputs for customer proposition development

Table of Contents

  • Executive Summary
  • Introduction
  • The silo situation
  • Benefits of breaking down silos
  • Why should telcos break silos now?
  • What prevents telcos from breaking silos
  • Case Study 1: Going agile in commercial teams in a medium-sized opco
  • Case Study 2: Going agile in part of a large multinational telco
  • Case Study 3: Deploying agile at scale at Telstra
  • Case Study 4: Deploying agile working in a separate entity (TELUS Digital)
  • Case Study 5: Deploying agile working in stages (Swisscom)
  • Conclusions
  • Recommendations
  • Index

Related research

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Stakeholder model: Turn growth killers into growth makers

Introduction: The stakeholder model

Telecoms operators’ attempts to build new sources of revenue have been a core focus of STL Partners’ research activities over the years. We’ve looked at many telecoms case studies, adjacent market examples, new business models and technologies and other routes to explore how operators might succeed. We believe the STL stakeholder model usefully and holistically describes telcos’ main stakeholder groups and the ideal relationships that telcos need to establish with each group to achieve valuable growth. It should be used in conjunction with other elements of STL’s portfolio which examine strategies needed within specific markets and industries (e.g., healthcare) and telcos’ operational areas (e.g., telco cloud, edge, leadership and culture).

This report outlines the stakeholder model at a high level, identifying seven groups and three factors within each group that summarise the ideal relationship. These stakeholder and influencer groups include:

  1. Management
  2. People
  3. Customer propositions
  4. Partner and technology ecosystems
  5. Investors
  6. Government and regulators
  7. Society

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1. Management

Growth may not always start at the top of an organisation, but to be successful, top management will be championing growth, have the capabilities to lead it, and aligning and protecting the resources needed to foster it. This is true in any organisation but especially so in those where there is a strong established business already in place, such as telecoms. The critical balance to be maintained is that the existing business must continue to succeed, and the new growth businesses be given the space, time, skills and support they need to grow. It sounds straightforward, but there are many challenges and pitfalls to making it work in practice.

For example, a minor wobble in the performance of a multi-billion-dollar business can easily eclipse the total value of a new business, so it is often tempting to switch resources back to the existing business and starve the fledgling growth. Equally, perceptions of how current businesses need to be run can wrongly influence what should happen in the new ones. Unsuitable choices of existing channels to market, familiar but ill-fitting technologies, or other business model prejudices are classic bias-led errors (see Telco innovation: Why it’s broken and how to fix it).

To be successful, we believe that management needs to exhibit three broad behaviours and capabilities.

  1. Stable and committed long term vision for growth aligned with the Coordination Age.
  2. Suitable knowledge, experience and openness.
  3. Effective two-way engagement with stakeholders. (N.B. We cover the board and most senior management in this group. Other management is covered in the People stakeholder group.)

Management: Key management enablers of growth

management-leadership-vision-growth-indicators

Source: STL Partners

Stable and committed long-term vision for growth

The companies that STL has seen making more successful growth plays typically exhibit a long-term commitment to growth and importantly, learning too.

Two examples we have studied closely are TELUS and Elisa. In both cases, the CEO has held tenure in the long-term, and the company has demonstrated a clear and well managed commitment to growth.

In TELUS’s case, the primary area of growth targeted has been healthcare, and the company now generates somewhere close to 10% of its revenue from the new areas (it does not publish a number). It has been working in healthcare for over 10 years, and Darren Entwistle, its CEO, has championed this cause with all stakeholders throughout.

In Elisa’s case, the innovation has been developed in a number of areas. For example, how it couples all you can use data plans and a flat sales/capex ratio; a new network automation business selling to other telcos; and an industrial IoT automation business.

Again, CEO Veli-Matti Mattila has a long tenure, and has championed the principle of Elisa’s competitive advantage being in its ability to learn and leverage its existing IP.

…aligned with the Coordination Age

STL argues that the future growth for telcos will come by addressing the needs of the Coordination Age, and this in turn is being accelerated by both the COVID-19 pandemic and growing realisation of climate change.

Why COVID-19 and Climate change are accelerating the Coordination Age

COVID-19-and-Climate-change-Coordination-Age-STL

 

Source: STL Partners

The Coordination Age is based on the insight that most stakeholder needs are driven by a global need to make better use of resources, whether in distribution (delivery of resources when and where needed), efficiency (return on resources, e.g. productivity), and sustainability (conservation and protection of resources, e.g. climate change).

This need will be served through multi-party business models, which use new technologies (e.g. better connectivity, AI, and automation) to deliver outcomes to their customers and business ecosystems.

We argue that both TELUS and Elisa are early innovators and pathfinders within these trends.

Suitable knowledge, experience and openness

Having the right experience, character and composition in the leadership team is an area of constant development by companies and experts of many types.

The dynamics of the leadership team matter too. There needs to be leadership and direction setting, but the team must be able to properly challenge itself and particularly its leader’s strongest opinions in a healthy way. There will of course be times when a CEO of any business unit needs to take the helm, but if the CEO or one of the C-team is overly attached to an idea or course of action and will not hear or truly consider alternatives this can be extremely risky.

AT&T / Time Warner – a salutary tale?

AT&T’s much discussed venture into entertainment with its acquisitions of DirecTV and Time Warner is an interesting case in point here. One of the conclusions of our recent analysis of this multi-billion-dollar acquisition plan was that AT&T’s management appeared to take a very telco-centric view throughout. It saw the media businesses primarily as a way to add value to its telecoms business, rather than as valuable business assets that needed to be nurtured in their own right.

Regardless of media executives leaving and other expert commentary suggesting it should not neglect the development of its wider distribution strategy for the content powerhouse for example, AT&T ploughed on with an approach that limited the value of its new assets. Given the high stakes, and the personalised descriptions of how the deal arose through the CEOs of the companies at the time, it is hard to escape the conclusion that there was a significant bias in the management team. We were struck by the observation that it seemed like “AT&T knew best”.

To be clear, there can be little doubt that AT&T is a formidable telecoms operator. Many of its strategies and approaches are world leading, for example in change management and Telco Cloud, as we also highlight in this report.

However, at the time those deals were done AT&T’s board did not hold significant entertainment expertise, and whoever else they spoke with from that industry did not manage to carry them to a more balanced position. So it appears to us that a key contributing factor to the significant loss of momentum and market value that the media deals ultimately inflicted on AT&T was that they did not engineer the dynamics or character in their board to properly challenge and validate their strategy.

It is to the board’s credit that they have now recognised this and made plans for a change. Yet it is also notable that AT&T has not given any visible signal that it made a systemic error of judgement. Perhaps the huge amounts involved and highly litigious nature of the US market are behind this, and behind closed doors there is major change afoot. Yet the conveyed image is still that “AT&T knows best”. Hopefully, this external confidence is now balanced with more internal questioning and openness to external thoughts.

What capabilities should a management team possess?

In terms of telcos wishing to drive and nurture growth, STL believes there are criteria that are likely to signal that a company has a better chance of success. For example:

  • Insight into the realistic and differentiating capabilities of new and relevant markets, fields, applications and technologies is a valuable asset. The useful insight may exist in the form of experience (e.g. tenure in a relevant adjacent industry such as healthcare, or delivery of automation initiatives, working in relevant geographies, etc.), qualification (e.g. education in a relevant specialism such as AI), or longer term insight (which may be indicated by engagement with Research and Development or academic activities)

[The full range of management capabilities can be viewed in the report…..] 

 

2. People…

 

Table of Contents

  • Executive Summary
  • Introduction
  • Management
    • Stable and committed long-term vision for growth
    • …aligned with the Coordination Age
    • Suitable knowledge, experience and openness
    • Two-way engagement with stakeholders
  • People
    • Does the company have a suitable culture to enable growth?
    • Does the company have enough of the new skills and abilities needed?
    • Is the company’s general management collaborative, close to customers, and diverse?
  • Customer propositions
    • Nature of the current customer relationship
    • How far beyond telecoms the company has ventured
    • Investment in new sectors and needs
  • Partner and technology ecosystems
    • Successful adoption of disruptive technologies and business models
    • More resilient economics of scale in the core business
    • Technology and partners as an enabler of change
  • Investors
    • The stability of the investor base
    • Has the investor base been happy?
    • Current and forecast returns
  • Government and regulators
    • The tone of the government and regulatory environment
    • Current status of the regulatory situation
    • The company’s approach to government and regulatory relationships
  • Society
    • Brand presence, engagement and image
    • Company alignment with societal priorities
    • Media portrayal

Related research

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Telco Transformation: The 20 Metrics That Matter

Introduction: Why do metrics matter?

Driving business model change

This report discusses the key metrics that telcos are using and developing to track the progress and success of their transformation initiatives. The report builds on a substantial body of work by STL Partners on the role that metrics can play in driving operators’ efforts to develop digital-service businesses. This previous work has taken the form of reports and case studies, as well as a number of bespoke consulting projects designed to support operators with their digital transformation strategies.[1]

In essence, our work and expertise in this area leads us to the conclusion that metrics and an associated governance process are an integral component of telcos’ digital and overall transformation. This is not just because metrics help to gauge the progress of operators’ initiatives throughout the period when the metrics are recorded, but because they define and embody the very purpose of telco transformation: to drive and manage activity on operator networks, and maximize the potential for that activity to be monetised, whether on- or off-net.

In this introduction, we outline how:

  • The focus of performance metrics is different between new and existing business models
  • Telcos need new measures to track organisational, operational, process and culture transformation in the face of a new focus on service innovation and flexibility, and a changing competitive landscape
  • The report addresses these issues

A shift from financial to customer enagement (and potential opportunity)

This essential function of Telco 2.0 metrics is markedly different from that of the financial and operational metrics that operators have traditionally employed which focus on revenues, costs, number of customers, and volume and price of megabytes and voice minutes carried and consumed. The business model these metrics correspond to is relatively simple and static: value is generated from monetising as much as possible the consumption of voice minutes and data packets, while reducing the cost to produce them. The metrics allow you to analyse past trends, and project future production capacity and earnings; but they are not a forward-looking tool enabling operators to respond dynamically to changing market conditions, to evolve the product offering, or transform the business model.

By contrast, digital services derive value from the specific content or application functionality they deliver to the user, and the ability to monetise that in a variety of ways: not always through direct, usage-based fees and billing.  And, although digital services can of course enhance existing products (as in the case of entertainment bundled with connectivity, for instance), they often treat network and connectivity services merely as the enabling infrastructure or asset, rather than the product itself. This means that for the digital telco, the emphasis of metrics changes to measuring usage of its digital services and the quality of the user experience, along with other indicators of future direct or indirect revenue growth.

Digital businesses often go through different stages of progress toward monetisation, and metrics are important in driving this development. The key idea is that if you drive usage and customer satisfaction, you create more opportunities to monetise the services involved. So you need a new, flexible set of metrics to capture the success, and inherent value, of the new business models as they evolve. The same is true of new telco services enabled by SDN and NFV (as discussed further below): there is not always an immediate direct revenue uptick; but the new capabilities and services are designed to attract new customers, and to generate usage and customer loyalty, which can be monetised in a variety of new ways at some future point. So it is critical to capture the revenue potential as well as revenue already achieved; and other metrics, which we discuss further below, should provide a measure of how fast or effectively a telco is evolving from the classic telco business model to the new state.

The contrast between the kind of metrics employed by the traditional and digital telco, along with those of digital start-ups and potential investors in digital services, is illustrated by the following table, taken from one of STL Partners’ previous studies on the question[2]:

We will discuss some of the Telco 2.0 metrics further below. However, what this table illustrates is how the focus in Telco 2.0 metrics shifts from usage-based revenues (as in the case of the Telco 1.0) to usage per se, and the impact of that usage on customer loyalty, brand, partners and revenue opportunity, as opposed to revenue already banked. The metrics – around usage and customer engagement – encapsulate the business model, which we could express in the form of an equation: number of users (or site visits, downloads, etc.) + frequency / length of use = revenue (opportunity). So driving the metrics in the right direction is tantamount to steering the business as a whole toward becoming a digital brand capable of generating customer enagagement in a crowded marketplace.

A new focus on service innovation and flexibility…

Presently, the focus of telco transformation efforts has shifted to the drive to virtualize networking functionality through Software Defined Networking (SDN: the centralization and virtualisation of control functionality previously provided by dedicated routers) and Network Functions Virtualisation (NFV: the virtualisation of a whole array of functionality in the edge and core networks hitherto provided by dedicated hardware appliances).

One of the primary aims of this transformation is to enable operators’ primary network and connectivity services to also be created, delivered and consumed in the manner of digital services: in and from the cloud / over the Internet; on demand; and as a software-based service. In the enterprise market, for example, leading SDN / NFV players are already rolling out Network as a Service (NaaS) and virtual CPE (vCPE) offerings that enable clients to customize their WAN connectivity and network features on demand via web portals, and pay for services on an ‘as-ordered’ basis as they scale bandwidth and networking parameters up or down.[3] In the consumer market, SDN / NFV similarly offers the prospect of enabling users to customize their connectivity and communications services more extensively and instantaneously than has hitherto been possible.

These characteristics of virtualised networks present a massive opportunity to telcos, as well as an enormous risk. On the one hand, SDN and NFV create the potential for operators to develop innovative, flexible combinations of communications and digital services in a more agile and cost-efficient manner, enabling them to compete more effectively with OTT players and accommodate massive growth in network usage generated by digital services.

…and new competition

On the other hand, as service and value creation is migrated away from dedicated physical facilities and hardware to software that can in theory be deployed over any physical network, this creates the possibility for third parties to develop OTT, virtual, on-demand network services from the cloud. This could result in telcos being disintermediated from their very core networking and connectivity services, as well as from the digital-service value chain. Software-Defined WAN (SD-WAN) is a practical example of this: third-party service providers install their own CPE and virtual network functions at enterprise sites, and connect them up to an SDN controller; they can then deliver flexible WAN connectivity services over networks of different types, and from different suppliers, relegating telcos potentially to the role of mere wholesale connectivity providers.[4]

In this way, virtualisation creates a dynamic whereby, as services are migrated to virtual functions, value creation will also increasingly depend on these, while the value of physical networking and connectivity services will decline as virtualised service providers and customers alike pick from a range of alternative connectivity providers. Consequently, telcos’ ownership and provision of the physical networks that support virtualised services may become equally if not more important as a means to own the customer relationship than as a revenue driver in their own right. Retaining the customer relationship means operators hold on to the opportunity to deliver increasingly more valuable virtualised services to those customers.

Increased emphasis on offensive and defensive moves

More service flexibility for both operators and for new competitors means that telcos find themselves in both an offensive and defensive position in relation to virtualisation. Offensively, virtualisation presents the opportunity to drive revenue growth and market share from new services, while also reducing the costs, resources and time required to deliver, manage and update both new and existing services. Defensively, virtualisation offers telcos a means to bolster revenues from core connectivity and communications services (including by managing more efficiently the incremental traffic generated by virtualised services over their networks), while defending their existing customer base from competitive players’ virtualised service offerings. This in turn protects the platform that ownership of the customer provides to up- and cross-sell further value-added (and value-adding) virtualised services.

In this context, metrics can play a vital role in helping to monitor progress with the different offensive and defensive components of telcos’ virtualisation strategies, in particular:

  • Offensive:
    • Tracking growth in revenues and number of customers attributable to new, virtualisation-enabled services.
    • Assessing the impact of virtualisation on costs and profitability.
  • Defensive:
    • Evaluating the impact of the new services on customer loyalty (particularly given the additional strategic importance of retaining the existing connectivity customer base)[5].
    • Measuring revenues and number of customers for the existing, core business (and so determining whether the new services are helping offset the decline in these).

In addition to these finance- and market-focused metrics, others around the production, performance and user experience of the new virtualised services become more important. This is in the light of the above remarks about the different operating model that applies to a digital services business, where the ability to quickly innovate and launch services that match changing and growing customer expectations and usage is key.

Organisational, operational, process and culture transformation

To achieve these gains, a considerable transformation of operators’ internal organisation, processes and indeed culture is required, and not merely a transformation of the network and the business model. To be successful, digital transformation – and transformation SDN, NFV and edge computing – requires the telco to become a different sort of organisation, more like that of other successful web and digital businesses.  Specifically, the telco must be founded on agile, DevOps principles, and cross-functional product and project teams.[6] Accordingly, new metrics are also required to monitor the progress of this overarching telco transformation.

In the remainder of this report, we will:

  1. Explain why operators seem so reluctant to talk about new metrics.
  2. Present and analyse the metrics we have uncovered through discussions with AT&T, Telstra and an European incumbent.
  3. Set out our view of the 20 most critical, top-level metrics for operators engaged in SDN / NFV-led transformation in its current phase.

[5] The drive to increase customer loyalty can also be part of an offensive strategy in that stickier services attract more usage and traffic, and hence have more long-term revenue potential

[6] This topic has been discussed in numerous previous STL discussions of telco transformation and will also form the focus of a forthcoming executive briefing on the topic of skills development and culture change. It is also discussed in further detail below.

 

  • Executive Summary
  • A reluctance to talk metrics
  • Why metrics matter for the virtualised telco
  • Conclusions and recommendations
  • Next Steps
  • Introduction: Why do metrics matter?
  • Driving business model change
  • A shift from financial to customer enagement (and potential opportunity)
  • A new focus on service innovation and flexibility…
  • …and new competition
  • Increased emphasis on offensive and defensive moves
  • Organisational, operational, process and culture transformation
  • Why most operators hate to talk metrics
  • Key transformation metrics of AT&T, Telstra and a major Western European incumbent
  • The transformation metrics explained
  • Evaluating the metrics used by European Incumbent (EI), AT&T & Telstra
  • Transformation: The 20 Metrics That Matter
  • Overview
  • The 20 Metrics that Matter: Description and analysis
  • Conclusion: New metrics define the new model

 

  • Figure 1: Different players’ metric requirements
  • Figure 2: Phasing of transformation metrics
  • Figure 3: Transformation metrics of AT&T, Telstra and a European incumbent (EI)
  • Figure 4: Instant pricing on Telstra’s PEN platform
  • Figure 5: The 20 types of metric that matter for successful telco transformation

Telco 2.0: The $50bn Enterprise Mobility Opportunity: What’s stopping telcos winning 500% more business?

Overview of Key Findings

STL Partners believe that mobility – the use of mobile data, new devices, new applications and communications services – is one of the most disruptive forces in today’s enterprise market. We think that a business philosophy to embrace mobility as a strategic asset and opportunity, rather than simply a technical challenge, will be a critical success factor for all businesses moving forward. Telcos can be a key enabler and business partner in this transformation, but to do so they will need to significantly change their approaches to working with enterprise customers.Key findings

Our new global research, independently produced by STL Partners and kindly sponsored by SAP, shows that many telcos are both ideally positioned but underprepared to exploit this fast emerging and evolving opportunity. We found that among the 101 global enterprise and 44 telco executives we surveyed:

  • Mobility works – 80% of enterprise execs thought their mobile app based initiatives had met or exceeded expectations
  • There’s big latent demand for telcos – 5 times as many enterprises (i.e. over half the total) would buy services and solutions from telcos than currently do
  • But telcos need to address credible capability issues such as security, product portfolio, app development, and process and industry expertise
  • And most telcos are underprepared – only 16% have a defined market offer or strategy, and internal adoption of mobility lags many other industries, with only 45% of telcos we surveyed offering internal apps compared to 61% in the enterprise sample.

Figure 1:  What would enterprises consider buying from a telco?
Figure 1: What would enterprises consider buying from a telco?

Source: STL Partners, On-line research, Enterprise >250 employees, Feb 2014(n=101)

Introduction

Background – the Business Context of Enterprise Mobility

Four major trends in demand are transforming the Enterprise Information and Communication Technology (ICT) market today:

  1. In pursuit of greater agility, new sources of revenue, improved efficiency, and closer customer relationships, enterprises are exploring opportunities to mobilise strategic aspects of their business.
  2. Enterprises are increasingly exploiting big-data, cloud, and mobile strategies to innovate and transform.
  3. To focus on their core businesses, they are outsourcing IT infrastructure and technology services.
  4. As employees increasingly use new digital technologies and services, enterprises have started to reduce spend on traditional telecoms services.

In response, telcos are looking to identify alternative ways to grow revenues from enterprise customers. This includes tools for the development, deployment, and management of enterprise apps, and managed infrastructure and technology services that offer flexibility and economies of scale.

In December 2013, STL Partners conducted a sizing study of the Enterprise Mobility market and identified a global opportunity of $50 billion (see Telco 2.0™ Executive Briefing: “The $50Bn Enterprise Mobility Opportunity: four steps for telcos to take today”).  This precipitated further exploration into:

  • Enterprises’ opportunities and priorities for mobile solutions
  • Their drivers and expectations vis-à-vis Enterprise Mobility, and their attitudes towards telcos as a prospective partner
  • The practical and perceptual inhibitors causing telcos to arrive comparatively late to the Enterprise Mobility party
  • How telcos can achieve the greatest value for their customers – and themselves – by developing or assimilating the Enterprise Mobility capabilities they lack today

New Research

In the first quarter of 2014, STL Partners carried out a combined research programme consisting of:

  • a survey of 101 enterprises worldwide (organisations with 250+ employees)
  • a quantitative study of 44 telcos
  • in-depth qualitative interviews with strategists and proposition owners representing 11 telcos

Figure 2: Enterprise customers – on-line survey respondents, per region

Figure 2: Enterprise customers - on-line survey respondents, per region

Figure 3: Telco – on-line survey respondents, per region

Figure 3: Telco - on-line survey respondents, per region

Table 1: In-depth qualitative interviews – contributing companies

Table 1: In-depth qualitative intervews - contributing companies

 

All the interviews were conducted on a confidential basis. Information and insights shared by the interviewees have therefore been anonymised.  Names and titles have also been withheld.

The findings – which suggest telcos are even further adrift of a robust Enterprise Mobility proposition than initially thought – are detailed in this report, together with recommendations on steps telcos can take to accelerate their go-to-market strategy and make up for the early momentum they have lost.

Overview – the enterprise perspective 

As demand for access to information on the go via mobile platforms is increasing, Enterprise Mobility is one of the hottest topics in IT. Mobile apps are fast becoming a business imperative to support better ways of working and business transformation. Enterprises must react quickly to harness the potential of mobile apps, while satisfying themselves that security, governance, and compliance across data, applications, and devices are fit for purpose.

Most Enterprises have started mobilising 

Our study revealed that most enterprises have already mobilised at least some of their organisation’s processes and interactions, generally starting from the inside out by prioritising internal initiatives over customer-facing ones.

Figure 4: Business processes already mobilised by enterprises

Figure 4: Business processes already mobilised by enterprises

Though we observed variations in adoption by sector and country that may indicate relevant differences (see Appendix – Industry and Regional Splits, page 48), the commonality of fundamental demand across regions and sectors is more significant.

Sales is the current lead application – but there’s more to come

Findings: field sales has always been a natural candidate area for mobilisation, borne out by the fact that more than half of enterprises in the study already had some form of sales app.  While the Shop Floor currently has experienced the lowest adoption of enterprise apps, it is also one of the areas of greatest potential for mobilisation, with 41% of enterprises contemplating mobilising their production facilities, concourse, or retail environment.  The highest levels of mobilisation or intent to mobilise were seen in Aftermarket Field Service, Transportation & Delivery, and Equipment Maintenance.

Figure 5: Internal / B2E mobile apps enterprises already have or are considering

Figure 4: Internal / B2E mobile apps enterprises already have or are considering

Opportunity: administrative apps are now a relatively mature, horizontal process market. Some telcos have had success selling these and it is an important area in which to have a compelling offering. However, such apps have lower price points and margins, whereas other sales and operational apps offer the potential for higher growth and greater business impact. Moreover, there is also potential for a new generation of intelligent sales apps to change sales performance in a more fundamental fashion.

Key Question: how can telcos best develop the agility and depth of ICT skills to sell and support both horizontal process apps and deeper vertical / operational needs?

Options: telcos have broad options to develop this internally, partner, or choose not to support these segments and their needs. See Four key enterprise mobility competencies for telcos, page 42.

In B2C: information first, marketing next

Findings: the customer-facing processes that had most typically been already mobilised were identified as Information & Reference (53%) and Paying Bills/Checking Balances (52%). The areas of greatest untapped interest in mobilisation were Social Media Sharing (33%), Marketing Offers (32%), and Scanning Barcodes/QR Codes (31%).

Figure 6: Customer-facing processes enterprises have mobilised or are planning to mobilise?

Figure 6: Customer-facing processes enterprises have mobilised or are planning to mobilise?

Opportunity: as an increasing volume of purchases are researched or made via mobile devices, traditional mobile marketing and shopping experiences in developed economies are likely to continue to evolve significantly.

Key Question: how can telcos develop and support the next generation of customer-facing mobile apps?

Options: again, telcos have broad options to develop this internally, partner, or choose not to support these segments and their needs. See Four key enterprise mobility competencies for telcos, page 42.

 

  • Executive Summary
  • Introduction
  • Overview: the enterprise perspective
  • Most Enterprises have started mobilising
  • Issues for Enterprises managing Enterprise Mobility
  • The results: 80 % of initiatives met or beat expectations
  • More than half the enterprise market would buy from telcos: 500% more than today
  • So why don’t enterprises buy from telcos now?
  • The telco perspective
  • Stages of mobile maturity among telcos
  • 70% of telco execs found EM a ‘very attractive’ opportunity
  • Telcos are not ‘drinking their own champagne’
  • Only 16% of telcos have a defined strategy or market offer
  • Enterprises want apps, but are telcos listening?
  • Shifting culture: new markets needs new mind-sets, models and metrics
  • What sort of strategy to balance speed and risk/reward?
  • Enterprise Mobility success factors
  • Four key enterprise mobility competencies for telcos
  • Should telcos partner – and what are the criteria?
  • Steps to defining the strategy for telcos
  • Appendix – Industry and Regional Splits
  • Adoption and barriers by Sector and Region

 

  • Figure 1: Enterprise customers – On-line survey respondents, per region
  • Figure 2: Telco – On-line survey respondents, per region
  • Figure 3: Business processes already mobilised by enterprises
  • Figure 4: Internal / B2E mobile apps enterprises already have or are actively considering
  • Figure 5: Customer-facing processes enterprises have mobilised or are planning to mobilise?
  • Figure 6: Capabilities enterprise employees and customers are using
  • Figure 7: BYOD – Prevalence of corporate and employee devices
  • Figure 8: Number of devices across the surveyed enterprises’ workforces 16
  • Figure 9: Top challenges and obstacles in Enterprise Mobility
  • Figure 10: How do Enterprises manage app development?
  • Figure 11: How many enterprises use platform-based applications?
  • Figure 12: Strategic mobility enablers currently in place in enterprises
  • Figure 13: Presence of a formal enterprise mobility strategy vs. number of devices across the workforce
  • Figure 14: Success of Enterprise Mobility deployment(s) to date
  • Figure 15: Success of Enterprise Mobility deployment(s) to date – per role
  • Figure 16: What would enterprises consider buying from a telco?
  • Figure 17: What would enterprises consider buying from a telco – by role
  • Figure 18: Enterprises which would consider buying from a telco or already have
  • Figure 19: Why wouldn’t enterprises buy from a telco?
  • Figure 20: Enterprise Mobility maturity stages in telcos
  • Figure 21: Telcos’ concerns about core revenue declines
  • Figure 22: How attractive an opportunity is Enterprise Mobility to telcos?
  • Figure 23: Telcos are somewhat well-informed around Enterprise Mobility trends and development in mobile applications
  • Figure 24: Types of apps currently used within telcos
  • Figure 25: Processes / workflows telcos have mobilised or plan to mobilise with apps
  • Figure 26: Maturity of telcos’ own mobility programme
  • Figure 27: Telcos’ Internal enterprise app store deployment
  • Figure 28: Mobile portfolio management
  • Figure 29: Telcos’ biggest challenges or obstacles to internal mobilisation
  • Figure 30: Products and services telcos are currently offering, or plan to offer
  • Figure 31: Comparison between services enterprises would consider buying from telcos vs. services telcos are currently offering, or plan to offer
  • Figure 32: Telcos’ target market
  • Figure 33: Telco Barriers to taking Enterprise Mobility offerings to market
  • Figure 34: A hybrid approach can enable Telcos to achieve multiple concurrent stages of mobility evolution
  • Figure 35: Potential ‘Roadmap’ decisions for telcos addressing Enterprise Mobility
  • Figure 36: Business processes already mobilised by enterprises by industry sector
  • Figure 37: Internal mobile apps the utilities sector already have or are actively considering
  • Figure 38: Enterprise device landscape
  • Figure 39: Enterprise device landscape by region
  • Figure 40: Top THREE biggest challenges and obstacles in Enterprise Mobility by region
  • Figure 41: Enterprise mobile apps development / acquisition – per region
  • Figure 42: Enterprise mobile apps development / acquisition per industry
  • Figure 43: Platform-based applications per region
  • Figure 44: Enterprise app store penetration
  • Figure 45: Reasons Enterprises would not consider obtaining Enterprise Mobility services from a telecoms provider – per region
  • Figure 46: Reasons Enterprises would not consider obtaining Enterprise Mobility services from a telecoms provider – per industry

Telco 2.0: The $50bn Enterprise Mobility Opportunity: four steps for telcos to take today

Executive Summary

In pursuit of agility, efficiency, new revenue sources and closer customer relationships, enterprises are turning to mobility to transform the way employees work with engaging mobile apps that harness device-specific functions and capabilities. These apps generally need to connect to and exchange data with back-office systems, many of which pre-date the mobile era. As a result, organisations are looking to partners to provide the tools, technologies and skills to customise and develop apps, do the heavy lifting of deployment and lifecycle management, and accelerate business value. STL Partners estimates the value of this opportunity to be around $50 billion worldwide.

As enterprises reduce spend on traditional telecom services, telcos have a timely opening to take an enterprise mobility proposition to market. However, to date, deployments have been niche and opportunistic rather than part of a long-term strategy. STL Partners has identified a four-step structured approach that telcos can embark on today, and gain competence and confidence as they move up the enterprise mobility stack to higher value offerings. The four levels of evolution involve:

  • Level 1 – mobilising their own operations and internal processes
  • Level 2 – offering a managed environment to enterprises for their apps, whether on premise or in the cloud
  • Level 3 – providing hosted mobility together with off-the-shelf enterprise apps, with the option to add “last mile” customisation to the enterprise’s specific requirements and provide an enterprise app store
  • Level 4 – providing hosted mobility and developing bespoke, highly differentiated apps that solve customers’ unique business challenges

However, building out these capabilities will require substantial commitment and investment – not only in platforms and tools but also in people, via a transfusion of talent from related industries.

What next?

The purpose of this paper is to stimulate telcos’ thinking around the development of a structured, short-term approach to enterprise mobility opportunities that can be transitioned to a more sustainable, higher-yield strategy.

Having highlighted the stark choices available, STL Partners are inviting telcos to participate in a research study which will delve deeper into telcos’ appetite for, and the practical considerations of, establishing a foothold in the enterprise mobility market. Among the big questions for exploration will be:

  • Why are telcos arriving relatively late to the enterprise mobility party?
  • What do they need to keep pace with enterprise mobility trends?
  • What successes have telcos achieved to date – but at what cost and effort, and what could be done differently or better to create a repeatable framework and reusable approach?
  • What are the shortest, most effective routes into specific markets and segments and what use cases should telcos be targeting?
  • What are the barriers to success in the app market and how can they be overcome?
  • Where, along the four-stage evolution, do telcos want to end up and why?
  • What can and should mobility vendors be doing to support telcos’ efforts to commercialise their enterprise mobility propositions?

Our forthcoming paper will reveal the findings and outline the “recipe” for advancing through each of the four levels of enterprise mobility maturity.

 

  • Joining the enterprise mobility revolution
  • The enterprise opportunity
  • The telco opportunity
  • Level 1 – ‘Drink your own Champagne’
  • Level 2 – Offer a managed environment for enterprise apps
  • Level 3 – Provide hosted mobility plus off-the-shelf apps
  • Level 4 – Hosted mobility plus development of proprietary enterprise apps
  • Barriers and inhibitors
  • What next?
  • About SAP
  • About STL Partners

 

  • Figure 1 – The enterprise mobility framework
  • Figure 2 – The four levels of enterprise mobility evolution
  • Figure 3 – Key opportunities for internal applications of mobility
  • Figure 4 – Example Use Cases of Off-the-shelf enterprise apps