The Rise of Telco Cloud-Based Platform Solutions
As telcos make the transition from on-premises to cloud-based platform solutions, they need to get maximum value from the data sets, information sources and insights available
Many prevailing industry operating models are one to two generations behind the current available telco cloud-based technology. As a result, they’re contributing to driving up costs, slowing down innovation and frustrating customers. It’s an anchor that weighs on telcos in the marketplace, annoying customers and ceding a significant competitive advantage to lean, agile, digitally native players that are coming to market with seamless operating models that offer a customized and automated consumer experience.
But unfortunately, unwinding and dismantling silos is no simple matter. Telecom operators are working hard to accelerate the move to a cloud infrastructure, become cloud-native and to further deliver success on their digital transformation journey.
Why Telco Cloud Platforms Enable Agility, Flexibility and Scale
Telcos can follow a variety of different implementation approaches, each of which comes with specific costs, risks and scale impacts. They can range from relatively low-cost, low-value initiatives to high-value, high-cost offerings, which form the basis of bundled and personalized deals.
The smarter choice comes in the form of telco cloud platform solutions. These cloud services enable agility and flexibility with a multitude of different component configurations and network functions to meet the current needs and cloud infrastructure to enable a telecom to grow. At the same time, opting for data-agnostic partners offers an immediate competitive advantage. By not being beholden to one sole data provider, telecoms can seamlessly switch, adapt and pivot towards a far greater cross-section of customer insights that reflect emerging market trends and preferences, new and younger demographics, ‘non-traditional’ borrowers, or those with modest credit histories.
How Digital Transformation Cuts Costs
Typically, the impact on cost reduction is notable. Digitally transformed, customer-first operations will capture significant savings in IT, sales and support costs through customer self-service, back-office overheads from smart pricing and contracts and organizational headcount because of real-time provisioning.
In terms of revenue, the telco cloud-transformed operator will enjoy shorter time-to-market, with new and more relevant products and services, increased cross-selling and upselling through automation, recommendation engines, reduced customer churn due to streamlined contract renewals and an enhanced CX.
Smart telcos don’t just have to compete on price. Customer experience and personalized customer marketing offers speak volumes when it comes to winning new business, consumer satisfaction and retention. Competing exclusively on price has largely - in more developed markets - resulted in margins continually getting squeezed.
But the telcos that successfully move toward a tailored, personalized customer experience, or next best offer, as a competitive differentiator are likely to win and retain a far greater market share.
Winning, especially with an analytically differentiated customer experience, hinges on the ability to get the right insight to the right people at the right time. While machine learning will help accelerate personalization and artificial intelligence may be allowed to take certain decisions that aren’t referred to human checkpoints, many providers are still some ways from being able to use these technologies to fully hyper-personalize experiences for consumers and optimize resources.
Delivering Analytically Differentiated Customer Experience and Personalization
Making the most of the data advantage requires leadership. If decisions are to be allowed to directly be informed by the insight that data creates, then this is as much about the buy-in of management as it is about investing in the right technology.
There’s no doubt that telcos sit on a rich vein of consumer relationship data. But how many generally know what to do with it all? It could be argued that an abundance of data makes decisions harder. A large proportion of data collected could be deemed useless and considered a distraction.
Being able to access all of the data can be a challenge, particularly for providers that grew quickly, and latterly through mergers and acquisition, leaving a messy tangle of legacy data silos to navigate. There is real value in taking steps to address data availability and integrating data across the organization before embarking on ambitions to use cloud services to drive better customer outcomes.
Creating a Culture of Analytics
Creating an organizational cultural environment that aligns analytical talent with customer experience strategy will enable an organization to identify and implement the right technology building blocks to realize telco cloud business value and allow analytical innovation to flow.
Telcos, in common with many other firms, aspire to reach a level of sophistication across their network functions where they can anticipate a customer’s needs and fulfil these preferences before the customer even knows they have that need. It’s easier said than done in large organizations, which are typically slow-moving, can be risk-averse and are often siloed. Reaching this level of personalized experience and consumer engagement is possible via cloud-native offerings.
The C-suite needs to set a clear direction for what data and analytics are expected to achieve for the business and invest in the right people and technology to bring this to life. A combination of managerial curiosity coupled with analytical experience and domain expertise will test the right hypotheses against the right data with the right context and therefore lead to insights that can fuel customer experience decisions and automate processes.
The ability to not only garner insight but to put it into action by executing complex customer strategies and personalized experiences will improve consumer loyalty and satisfaction. The agility to continuously compare different strategies will result in more meaningful interactions with customers as telcos understand more than ever before about customer needs and behavior.
The top-performers are often the most agile. It’s typically the technology that best suits and is favored by firms comfortable working with cloud services and cloud-hosted platforms.
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I further broke this down by looking at the characteristics of the youngest 15% in each group, which occurs at age 29 for the 750-799 group and 43 for the 800-850. We used FICO<strong>®</strong> Score 9 for our analysis, and examined typical variables of the categories that go into the make-up of the score.</p> <p><a href="http://www.fico.com/en/blogs/wp-content/uploads/2016/10/FICO-Score-High-Achiever-table.png"><img class="alignnone size-full wp-image-29367" src="http://www.fico.com/en/blogs/wp-content/uploads/2016/10/FICO-Score-High-Achiever-table.png" alt="fico-score-high-achiever-table" width="715" height="747" /></a></p> <p>Since there’s a lot to dissect in this chart, I’ll highlight a few findings that struck me: <ul> <li><strong>Credit history.</strong> Higher scores are undoubtedly associated with a longer time on file. What’s striking is the higher average time on file for the 800+ group, both overall and for revolving accounts (the most common trade line). Clearly, it helps to start credit use early in life – but that’s not the sole determining factor for high scoring. The younger cohorts in both the 800+ and 750-799 groups have time on file medians significantly less than their older counterparts.</li> <li><strong>New credit.</strong> High credit scorers do, in fact, pursue new credit. We see little variation in months since last trade line opening and last inquiry among all groups observed.</li> <li><strong>Pay on time.</strong> As you might expect, the further in the past the delinquency, the higher the score – and that’s <u>if</u> a delinquency ever happened. 95% of the 800+ people and 72% of the 750-799 group have never been delinquent, which is a striking contrast to the 57% for the total population. The percentages for the younger groups are even higher, especially so for the 750-799ers. Collection items are also scarce for these high scorers. 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It ain’t rocket science!</p>
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