Telcos are still a bit rubbish at digital transformation – TM Forum

Digital transformation has been a circling buzzword for years, though research from the TM Forum show progress is cumbersome.

According to the TM Forum’s bi-annual Digital Transformation Tracker (DTT), 48% of telcos still have not found the business case for virtualization, while 32% revealed they are deploying NFV in the packet core, and 36% are deploying NFV at the mobile edge or have deployed virtual customer premise equipment (vCPE). The number of telcos who have a timetable for virtualization has dropped to 23% from 30% during the first addition of the survey.

“The telecoms industry first started to embrace the concepts of network virtualization and software-defined networking eight or nine years ago,” said Mark Newman, Chief Analyst at TM Forum. “Today, it appears the majority of CSPs are moving from the awareness and planning phases of transformation to deployment of VNFs. This progress is a positive thing, albeit a lot slower than expected.

“However, the deployment of these virtual network functions has not had the transformative impact that many CSPs were hoping for. As a result, many are now moving beyond virtualization to full network cloudification.”

The issues which many telcos are facing are a lack of definition and interpretation of what a digital transformation program involves, a lack of a cohesive plan and objectives internally and the alignment of business units. In short, virtualization at the telcos seems to be nothing more than a hodge podge of buzzwords, with little clarity or understanding of what digital transformation actually is.

Looking at the network, the end-goal is a bit clearer here. Most telcos are aiming to create a more automated environment, where the Devops concept aids fast release of services and an adaptable business environment. The biggest concern here is the need to introduce a new generation of agile OSS/BSS (60%), though 56% cited security vulnerabilities as a notable challenge.

How can MVNOs secure their place in digital value ecosystems? periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Thandi Demanet, Business Analyst at TMForum, explores the digital value ecosystems and how MVNOs can have a bright and strong future role in this emerging economic paradigm.

The business of IoT is rapidly growing, and despite a certain level of maturity, it’s not getting any simpler. As the speed of evolution and development continues, stakes too continue to rise. From the days of M2M we’ve seen a lot of change, a lot of innovation and countless opportunities have arisen as technology has become more sophisticated to enable IoT. It hasn’t stopped at that though, as IoT is expanding into IoE (the Internet of Everything, connecting people, processes and things to derive intelligent actions and optimize a variety of fields) and now into intricate digital value ecosystems. This new economic and commercial paradigm is radically different from anything companies have known for centuries so it’s only natural that it takes some time to find one’s footing – but time is not a luxury businesses can afford today, at the risk of being ousted, becoming irrelevant, or to use a term irrefutably associated with digital – disrupted.

What strategic capabilities and advantages can MVNOs leverage?

Luckily, MVNOs intrinsically possess capabilities that are valuable in this new ecosystem era and it’s important to take stock and take advantage of these to generate new revenues, to provide new services, to occupy new positions in various sectors. While providing connectivity over which to run complex digital services may seem the obvious role for a communications service provider, the MVNO can and should also leverage other capabilities and strengths it has including looking at agility and its current customer base. IoT and value ecosystems comprise a complex value stack consisting in connectivity, of course, but also, device management, data gathering and processing, security and privacy assurance, charging, billing and settlement, customer experience management, digital platform provision and management, APIs, OTT applications, etc. Some of which MVNOs are well placed to offer depending on the existing business model, size, expertise and customer base. Many innovative MVNOs are already looking at designing and adopting new business models and actively seeking innovative partners to develop new services and commercial opportunities.

In this previous article, TMForum’s Senior Director for IoE and Digital Business, Craig Bachmann alludes to the MVNO’s expertise in catering to niche markets. As the IoE expands, more and more use cases are emerging, each with its own particularities, and tailor-made, agile solutions will be what users value. In a recent report, Analysys Mason warned of the threat MVNOs pose to MNOs in IoT citing as an example recent MVNO contract wins with Audi, GM and Kia Motors in the automotive space. It’s becoming increasingly evident that with specialised MVNOs becoming more widespread, the customer relationship based on established trust goes a long way towards developing new services with and for them and generating new revenue streams. The game, or business rather, will be won by those able to forge a solid partnership with customers through expert understanding of their objectives and genuinely enhancing their business.

What do digital ecosystem-based business stakeholders need to succeed sustainably?

What most companies don’t have unfortunately, is a holistic view of a given business scenario, meaning it cannot fully grasp the “end-to-end” requirements and value. This is true for all potential ecosystem participants likely to provide some part of the value chain (or fabric rather in this interconnected, interdependent context).Yet, without understanding the needs and strengths of your partners, as well as their objectives and overall business models, any ecosystem is destined to, at some point, encounter incompatibilities and difficulties, or worse, simply fall apart. When an end-user is relying on a service delivered though this ecosystem, he or she doesn’t care much about how or why the expected result, what they value, is no longer there. At best, it will be a commercial hindrance; at worst, lives and livelihoods will be impacted, depending on the sector and service. In other words, it’s vital,for a digital service delivered though an ecosystem of partners, what we refer to as value ecosystems, to be built on common understanding and a common vision, with compatible, sustainable business models throughout.

This is the concept behind an Ecosystem Business Architecture (EBA), which TM Forum is building with member companies through open collaboration. The Forum has been the global non-profit industry group helping organisations navigate digital transformation, improve agility and develop the assets and capabilities needed to remain competitive and thrive over the tumultuous changes of the past 28 years, and continues to do so via neutral industry-wide collaboration. Examining and mapping ecosystem roles, relationships, responsibilities, capabilities, value chains and fabrics, identifying potential weak spots, establishing a common language for ecosystem partners, identifying and defining ecosystem-level metrics and building a common reference architecture for effective, efficient and sustainable ecosystem-based digital business are the purpose of the EBA. Through addressing a series of real-life business scenarios, we will identify among the entire spectre of stakeholders, commonalities to provide guidelines, practical tools and assets to facilitate and optimise monetization and management, while generating solid trust.

The tip of the value ecosystem ice berg

While it’s become apparent that the commercial and organisational aspects are the least developed and most complicated when it comes to digital, connected business, the underlying, enabling technology is of course, a crucial part of IoT and value ecosystems. So, we continue to examine and explore the use of innovative technology solutions such as distributed ledger technology (DLT), automation, AI and machine learning. Indeed, these innovations open up new opportunities and potential revenue sources for MVNO players seeking to provide more than connectivity. The imminent launch of 5G too will bring new opportunities, challenges and business cases that will be better evaluated and mastered with the support of an ecosystem business architecture.

An ecosystem business architecture will allow MVNOs and other business stakeholders to visualise and examine the value ecosystem associated with a given business scenario and better inform their strategic decisions. It will make value ecosystems simpler and safer business undertakings.
We’re only at the tip of the ice berg when it comes to value ecosystems and we’re already seeing ecosystems of ecosystems appear. MVNOs can have a bright and strong future role in this emerging economic paradigm, but the time to prepare and take action is now, or better yet, yesterday!


Thandi colourThandi Demanet is the business analyst for TM Forum’s IoE & Digital Ecosystem program, working closely with members, including the world’s leading Communications Service Providers and technology providers. Thandi helps design and supports implementation of the Forum’s collaborative work in these areas, both strategically and tactically. Her role is to identify the most pressing and valuable opportunities and challenges within the connected economy, as well as to ensure effective and efficient open collaboration between industry leaders on a global level to facilitate commercial success for all. Thandi is passionate about the power and promise of the IoT and innovative emerging technologies to improve lives, societies and the world we live in.
Hear from Thandi Demanet at the MVNOs North America 2018. Thandi will be taking part on the ‘TM Forum Workshop: Focusing on IoT stack and where MVNOs can play’.

Bringing BSS/OSS into the new age – it’s now or never periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Tony Gillick, VP Solutions Management at Openet, urges the industry to transform its approach to BSS and OSS before it’s too late.

TM Forum’s recent launch of its Open Digital Architecture is good news for the industry. It captures a lot of the good work that has already taken place and sets out a blueprint for the digital transformation of BSS and OSS.

Today’s service providers know they need to change if they are to keep up with the pace at which the industry is moving. But with ever-decreasing ARPU, and the race to free data underway, they don’t have the luxury of embarking on lengthy, hugely expensive transformation programs to get their BSS and OSS stacks up to speed. Instead, they need an API-driven open architecture that enables them to get away from vendor lock-in and having to deal with inflexible, large vendors who will deliver projects and upgrade software on their terms.

The bleak reality is that if operators are to survive in the face of rising competition from web-scale companies, it’s now or never to make that change happen, so what does that look like for operators willing to transform?

Become the model for change

BSS/OSS have been around since the start of the cellular business in the 1980s, and that’s where the problems begin for today’s operators. Throughout the years, operators have built up a complex burg of legacy systems and processes, which are not only no longer fit for purpose but also nothing short of a nightmare to overhaul.

For operators, transforming OSS/BSS begins in two ways. First, with overhauling traditional commercial models, which have become slow to move and very inflexible. These commercial models are no longer fit to serve the agile world in which we live, one where subscribers want everything now, on-demand.

Today’s operators need new commercial models that are driven by short-term goals and that do away with the old, lengthy, never-ending service contracts that look at transformation projects over several years, instead of months or even weeks.

The second way in which transformation can happen is through new delivery models. It’s no secret that web-scale companies’ agility is beyond that of operators. But this need not be the case; by harnessing new processes and technologies such as DevOps and microservices, operators can replicate the agility of Internet companies. It is only through this open, innovative and experimental approach that operators will start to compete with the big OTT players.

By overhauling commercial and delivery models, operators will not only be able to boost their rate of innovation, but they’ll also see the industry-wide issue of vendor lock-in disappear. As the industry moves towards open technologies which proliferate the use of DevOps and Open APIs, fewer vendors will be able to tie down operators to lengthy contracts that provide little in the way of innovation and experimentation.

Setting operator priorities straight

But making change happen isn’t just about technical capabilities, it also requires a shift in mind-sets and priorities, particularly when it comes to the deployment of new services such as 5G and IoT. Although the race to 5G is well and truly on, the state of affairs for operators today implies that perhaps it shouldn’t warrant such urgency.

Operators’ resources are stretched and, where subscribers are concerned, the pressure is on to be better and do better – this means, selling a wider variety of personalised digital services. While 5G and IoT will undoubtedly bring about a wealth of applications that will benefit operators, neither of these technologies will bring about immediate ROI. It’s important, therefore, that operators invest their efforts in laying the foundations to not only ensure their survival today, but to be able to support the technologies of tomorrow, and that starts with changing the way they approach OSS/BSS.

A greenfield approach to OSS/BSS

Adopting the correct technologies will be the key to unlocking the OSS/BSS treasure chest. Operators should approach transformation with a greenfield attitude – that is, to start afresh, with no legacy systems or culture and to adopt a “digital first, customer first” approach. And this does not mean that existing large-scale transformation projects should be abandoned, instead, new greenfield approaches mean operators can run these in parallel to the current legacy stack being transformed.

This greenfield approach promotes the switch from hardware and software stacks to real-time, automated digital platforms. These digital platforms can see operators launch services in as little as 14-weeks whilst still going ahead with their longer-term transformation projects. By using these platforms, operators can leverage a modular, API-driven approach and select which service or “platform component” they need, on an ad-hoc basis. This promotes faster service delivery but also reduces the cost attached to digital transformation.

Most importantly, this open, best of breed, platform approach is the antithesis of big vendor lock-in. By drawing on open technologies, promoted through the use of open APIs, operators will be better suited to encourage partnerships and the collaboration and sharing of technologies within these. Not only will this reduce OSS/BSS cost and implementation timescales, it will also prevent mega-vendors from selling services from a single supplier.

Ultimately, it is this openness that will promote innovation in the telecoms industry and that will see OSS/BSS become the systems operators need to succeed in this ever-evolving, digital world.

Digital Transformation: just a bump in the road

There’s no doubt that digital transformation is hard, and it’s clear that few operators know where to begin. But the solution lies in this greenfield attitude; by starting anew, with no pre-conceptions or notions in mind, operators can leverage experimentation to roll out new services that may have otherwise taken years to deploy.

It is this provision of tools – namely the platforms, new technologies, APIs – by vendors that will encourage operators to innovate, and will see the challenges associated with digital transformation soon fade into the telco past.


openet-Tony-GillickTony is VP Solutions Management at Openet. He’s been designing and deploying BSS for over 15 years and is responsible for direction and deployment strategy for Openet Digital Business Platform.

Philosophical transformation and Light Reading both attended Digital Transformation World in Nice, France and it seemed to have been one trade show too many for Scott and Iain, who found themselves in the middle of an existential crisis.


Traditional operators are incapable of digital transformation

The Digital Transformation World event this week shone a light on quite how far from achieving digital transformation many operators are.

Such is the perceived importance of this concept to the future health of the CSP industry that TM Forum, which has traditionally been more focused on just the underlying technology used by CSPs, decided to rebrand its big show of the year accordingly. Everyone in attendance seemed to agree it’s important, but that certainly doesn’t mean it’s going to happen anytime soon.

First, what the hell is ‘digital transformation’? Like many persistent buzzwords it’s sufficiently broadly and vaguely-defined that it can be applied to pretty much every aspect of corporate evolution. In the context of CSPs it’s generally understood to refer to the necessity of changing the way they do things to match the speed of innovation typically associated with Silicon Valley internet companies. Or, as CEO of consultancy BearingPoint Angus Ward said at the show “How do you create more compelling, differentiated products and services that are harder for other people to copy?”

In this respect digital transformation (which we would abbreviate if it wasn’t for Deutsche Telekom – sigh) can be broadly subdivided into technological and cultural evolution. The former concerns all the cleverness currently underway in virtualizing, cloudifying and automating network management, which was a major theme last year.

Culture club

This year we felt the discussion focused much more on the cultural side of things, a view shared by many others in attendance. And if you thought the technological transformation was tricky, the cultural challenges can seem insurmountable, so much so that you have to wonder whether it’s even possible.

“That’s our big question,” said Nik Willetts, CEO of the TM Forum (pictured above, delivering his keynote). “Let’s assume for a minute the technology problems can be overcome – if you look outside the industry a lot of them have been overcome by hyperscale internet companies. But if you put all this amazing technology in an environment where people work and procure and think and sell the way they always have, it’s a bit like having a Ferrari engine in a Skoda.”

TM Forum launched its Digital Maturity Model last year and a Digital Transformation Tracker this year, both designed to shine a light on the challenges associated with all this stuff and to help companies go about it. In common with the technological challenges, the culture shift can seem to enormous and daunting that companies need it broken down into manageable chunks to have any hope of making progress.

One person who seemed impressed with this approach was Mary Clark, CMO of Synchronoss, which specializes in providing digital products and services to operators that they can then pass on to their customers. “I was happy to hear a consistent theme of looking at digital transformation in a modular way – breaking it down into manageable chunks that can then be executed upon,” she said.

“Rather than hearing about all-encompassing projects, there is a real embrace of targeting specific areas, setting objectives, and executing in a much more narrow way, giving more opportunity for success. I heard several examples where there was focus put on a specific business area, like enterprise or SMB and the subsequent actions taken to improve the customer journey for standard actions. And then get to it. Then if there are lessons learned there they apply them to another area. It makes the whole prospect of even beginning with a digital transformation project more feasible.”

BearingPoint’s Ward flagged up some research his company has done, segmenting companies by business and this culture type. “It’s quite a nice framework for things like culture,” said Ward. “So asset providers are very centralised, with a business case for everything and slow decision-making. But that is in conflict with the retail side that wants to move a lot more quickly. Also the culture of an asset-intensive business may be very different to one based around intellectual property.”

Bearing point 4 models

Bearing point 4 quadrant

The customer is always right

Bengt Nordstrom of telecoms consultancy Northstream identified the key cultural challenge as the move to a customer-centric mindset. “A digital transformation project must always start with a customer and business process mindset,” he said. “For instance, how would we like to serve our customers in the future? How would they like to buy and consume our services? What in our ways of working can be improved and streamlined to gain shorter lead times and cost reductions? After such analyses they can investigate how technology can help them to achieve their objectives.”

And it’s not like the operators haven’t got the memo. We spoke to several and they spoke with a common voice. “You’ve got to know what people want to buy; how do you stay relevant and make that pipe something you never leave?” said Ibrahim Gedeon, CTO at TELUS.

“Operators need to offer their customers contextual, useful things and be careful not to appear to be trying to exploit them,” said Erik Meijer, who works in Strategy GPM/Group Innovation at Deutsche Telekom. “What John [Legere] did in the US was to go into the call centre rather than the board room and listened into the calls to understand where the problems are. Then he started to eliminate problem by problem, by asking how he could help them.”

“It’s all a question of still being in the value chain in two, three, five years from now,” said Thierry Souche, CIO at Orange and SVP of Orange Labs Services. “That’s why we put a lot of effort into conversational services and identity. Digits from T-Mobile in the US is a good illustration of this as it allows you to loosely decouple your identity from your number, SIM and device.”

“Ultimately it is about survival,” said Nordstrom. “In a fast-moving ICT world, operators are only relevant as a channel for its various service and product providers and for its customer if they are digitizing their businesses at least with the same pace as they do.”

A few people we spoke to agreed that, as well as introducing digital transformation incrementally, it’s probably a good idea to have distinct, semi-autonomous business units within the company that are largely insulated from the incumbent culture and given longer-term, more qualitative, more collaborative incentives.

“Webscale companies like Amazon focus on smaller product-focused teams with all the right people in them to get the job done and their focus is on an outcome for a customer,” said Willetts. “Compare that to your classical enterprise – telco or otherwise – in which people operate primarily within their siloed department, and it’s completely different.”

Play to your strengths

Another common theme was the need for operators to open up to collaboration with partners that are better at things like apps and digital services than they are. This involves things like open APIs and creates risk, but the risk of not doing so seems greater.

“These days few, if any, innovations, whether they’re service improvements, or new products and services, are solely created in-house,” said Ward, who unveiled some research on partner ecosystems at this year’s show. “So you have to have a differentiating ecosystem of partners and they bring with them different cultures.”

A great illustration of how badly it can all go wrong when a traditional, siloed organization tries to act in an agile, customer-centric way without having undergone digital transformation is the tragic case of Vodafone 360, which saw the telco attempt to combat the OTT threat by launching a walled-gardened hardware and software platform. It had problems from the start as it was a massively inferior experience to iOS and Android and was embarrassingly canned just two years later.

Attempting even minor changes to the culture of large, old organizations is notoriously different. Not only is there a general cultural inertia, but you have levels of management that have built their careers on the old way of doing things and often all the incentive structures are set up to support the status quo. It’s hard to see how operators can hope to do this with the way they’re currently set up. The cruel irony is that they’ve probably got to transform themselves a fair bit just to be able to make a start on full-blown digital transformation.

To paraphrase the Philosopher Sam Harris: the most harm is done by good people with bad ideas and bad incentives. For CSPs to have any hope of achieving the digital transformation they all agree they need, they need to communicate that idea throughout the whole company and incentivize every single employee to implement it. Sounds simple enough, doesn’t it?

TM Forum serves up some digital transformation top tips

Telecoms industry association TM Forum is so into digital transformation these days it has even renamed its big event of the year after it.

At Digital Transformation World, TM Forum is publicizing the results of its Digital Transformation Tracker, a global survey of CSPs designed to see how the industry is getting on with digital transformation. In this context the buzzword seems to refer to a bunch of initiatives and cultural changes designed to make telcos as fast and agile as internet companies.

60% of respondents said they’re already on some kind of digital transformation journey, which seems a b it low to be honest. Among the stated obstacles to getting on with a process that is generally considered vital to the long-term prosperity of the industry are: a lack of vision and focus; cultural and organizational issues and a lack of top management support.

The proportion of respondents who said they’re “very optimistic” was just 11% – half the level it was when they were asked in October 2018. So not only does the process seem to be stalling, but CSPs are becoming increasingly pessimistic about turning that situation around.

“Any change is hard to implement, and CSPs are no exception,” said said Mark Newman, Chief Analyst at TM Forum. “Some identify that they are not risk takers, and making a leap of faith into unproven revenue streams is not easy. Our second Digital Transformation Tracker shows that digital transformation extends well beyond technology itself, and increasingly we’re seeing concerns about organizational and cultural readiness.

“In order to ready themselves for successful digital transformation, operators must not only be able to articulate a clearly defined vision for their transformation projects, but critically they must communicate their vision throughout every level of their organisation.”

The proposed solution is for CSPs to shift their whole mindset towards being a digital service provider (DSP) instead, and TM Forum reckons it knows how best to go about that. “To date, definitions of what a DSP is, or could be, are relatively scarce,” said Nik Willetts, CEO of TM Forum. “The terms “platform” and “enabler” are now being adopted by many CSPs – and their technology suppliers – but there is a lack of clarity and understanding about how to monetise such approaches.

“Our Vision 2020 report seeks to address this by laying out the transition from a CSP, to digital CSP and beyond. From the new commercial and architectural models involved in becoming an enabler and partner, to the best route to take for strategic investments and access to vertical markets, the report offers a clear pathway to allow companies to be clearer on their digital transformation aspirations. This all starts with the CSP setting a clear vision for its business.”

The event itself is a pleasant alternative to the craziness of MWC, offering more opportunity to just sit down and talk shop with CSPs and vendors. The vibe we’re getting so far indicates support for any initiative that clarifies and facilitates the process of digital transformation but, from an operator perspective, there seems to be a feeling that vendors could do with raising their game in this area.

TM Forum brings Open APIs to the Linux party

Some might bring chips and dips, others potato salad, while the rogue ones bring Tequila, but the TM Forum has pitched up to the Linux Foundation’s LA party with a bag full of Open APIs.

The pair were already in partnership prior to this announcement, but the Open Networking Summit was deemed the perfect shindig to announce things are starting to get serious. As part of the new partnership, the TM Forum will allow its APIs to be shared across the entire Linux Foundation community for use in any of its open source projects.

“Together with TM Forum, we can shift the global industry one step closer to harmonization of open source and open standards,” said Arpit Joshipura, GM of Networking at The Linux Foundation. “Our joint efforts will help accelerate deployment and adoption for end users.  We look forward to this continued and intensified collaboration and how it will advance future networks.”

“Open Source and open standards – including TM Forum’s Open APIs and Open Digital Architecture – have a pivotal role to play in transforming the agility of our industry, ensuring it is fit for the next decade,” said Nik Willetts, CEO of TM Forum. “We’re delighted to be working with The Linux Foundation to bring together our joint expertise, and look forward to partnering with a range of open source projects over the coming months.”

As it stands, the TM Forum has a suite of 50 REST-based Open APIs which are used by 4,000 software developers in 700 companies worldwide. Open source projects are becoming increasingly popular with the telco space and this partnership introduces platform-agnostic industry standards to the mix. This could mean different things to different organizations, but standardization is generally a bit quicker, cheaper and removes the threat customization.

For a more in-depth look at the partnership Carol Wilson from our sister-site Light Reading is at the event. While there are certainly technological benefits to the partnership, it would also be worth noting the administrative benefits of the tie up.

Firstly, a closer relationship means the two can communicate directly as opposed to using members as the middlemen. Secondly, moving to Apache 2.0 license terms removes the potential threat of contributors claiming IP rights on any breakthroughs.