Four digital challenges facing telcos in APAC

Patrick Pathinathan/ Pivotal Software

The Asia Pacific telecommunications sector is experiencing incredibly fast growth, enabled primarily by investments in the network and IT infrastructure that supports mobile internet activity. The World Economic Forum in collaboration with Accenture has estimated that globally, digitization could contribute approximately $100 trillion in value to the telco industry over the next decade.

There are now more than 50 telecommunication operators and approximately 2.2 billion subscribers in the region. Southeast Asia, in particular, is experiencing rapid growth in mobile internet, digital and social media activity and is positioned to be a leader in this space with more than 370 million internet users. In fact, it’s the third-largest market globally for internet use.

To keep up with the growth, every telecommunications operator is now creating new experiences to make it easy for customers to engage with them as well as enabling employees to serve their customers seamlessly, lest they lose customers to a competitor that offers a better customer experience.

Digitization has influenced customer expectations so much so that winning the race for customer engagement and loyalty will require telco players to deliver on digital experiences and features in an efficient, timely and cost-effective manner.

With that in mind, here are four challenges of digitization facing the telco industry in APAC.

Evolving traditional software practices

Whilst every organization knows the importance of software, the way software is designed, built, tested and delivered at scale today is at odds with rapidly evolving customer and frontline experience expectations.

These traditional practices do not allow rapid development and testing of software before being launched to the broader customer base. Many organizations spend a significant amount of time in concept and design and then build with the expectation that this will deliver to the initial requirement. The challenge is that this prevents organizations from having the ability to gain ongoing customer feedback and incorporate it into modern software practices through CI/CD to continue to deliver value to their customers.

Inflexible legacy systems

Every organization is grappling with how they deal with legacy systems. CIOs across industries must learn to balance the constraints of legacy systems with the need to innovate at “start-up speed” to keep up with disruption.

These systems are reliant on hard-coded software, which is complex and tightly bound to back-end systems. Every time a new initiative is kicked off to create a new experience, the time to realize concept-to-cash takes significant headwinds and delays. In some cases, a simple product change can take anywhere from two to ten months to implement. Many systems were built for an environment where few changes took place and designed to support a single product set.

Product complexity

Many organizations face an average time frame of six months to launch and change product variations. The complexity of existing products and processes make it difficult to personalize experiences to meet individual customer needs.

As a result, organizations are investing in new digitization platforms that offer a significant amount of flexibility through the ability to create new microservices. Microservices are simpler to integrate with reusable components that allow innovation and personalization without increased complexity.

Manual processes

The challenge facing any organization is how they deal with manual processes when building new software experiences for its customers. The enterprises are dealing with the concept of constantly changing and updating everything they have. Manual processes enterprises are facing are impacting their time to market of new customer journeys.

Pivotal and research firms Longitude and Ovum recently conducted a survey of more than 1,600 IT executives across six countries and five industries, including telecoms. Among the findings, only 38% of APAC respondents reported that software deployment was mostly or fully automated.

To keep up with global industry innovation, operators must re-think how they utilize developers’ time. Freeing them up through automation can enable them to work on value-driven projects, such as writing code for new products or features, which will ultimately engage customers.

What’s next for telcos

Telco leaders across the region are working towards implementing digital strategies fueled by innovation that will meet and exceed customer experiences while also reducing cost. Initiatives undertaken by organizations address the limitations that cause or contribute to the pain points experienced by customers and staff. Australia's Telstra, for example, is investing up to A$3 billion ($2.16 billion) under its digitization and T-22 initiatives to transform its engagement with customers and staff.

The telecommunications sector plays a central role in connecting people, places and ideas across the globe through a digital ecosystem – particularly poignant in Australia, which can feel removed from friends, family and business operations in other regions.  By overcoming these challenges and thinking smartly about digital strategies, telcos can continue to play a pivotal role in fostering innovation that sparks customer loyalty across the region.

Patrick Pathinathan is a client director at Pivotal Software in Melbourne, Australia

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