Can CSPs play a bigger role in enterprise digitalization?

Enterprises face changing customer demand, expectations and behavior, along with a host of other novel challenges. Meeting these challenges and maximizing their opportunities requires them to adopt a more flexible and agile operating model by taking full advantage of digital capabilities, connecting internal silos, increasing their use of automation and AI, and supporting new ways of working.

This, in turn, creates new valuable opportunities for CSPs to widen their footprint within the enterprise and sell more products as a result, as well as broaden the offering beyond the enterprise to sell to more of the enterprise’s partners in the connected supply chain.

While there is considerable value at stake, CSPs are currently not grasping the opportunities being presented. According to the GSMA, while revenues from IoT will more than triple from $381 billion in 2020 to $906 billion in 2025 just 5% of this revenue will derive from connectivity. This means that CSPs need to go beyond connectivity to capture more value.

Enterprises recognize the valuable role CSPs could play in orchestrating services, technologies, and capabilities, as well as adding valuable know-how into the mix, but they often find them hard to do business with. Omdia has found, for example, that even though the number of enterprise 5G projects has doubled, the number led by CSPs had fallen from 21% in 2020 to 16% in 2021.

This means CSPs are being disintermediated and outpaced by alternative service providers who have increased their share of enterprise 5G deals from 7% in 2020 to 27% in 2021 according to Omdia. If CSPs are to assume a leading role in more digitalization projects they urgently need to refocus on where they can add more value, become more efficient in delivering what enterprises need, and begin communicating joined-up operational benefits rather than advocating narrow-focused technology advantages.

Verticalization and going deep

The industrification of telecoms requires CSPs to verticalize their offerings rather than treating large enterprises as either a generic sector or a siloed opportunity that requires a series of technologies to be bolted together into a bespoke offering. This latter approach slows everything down at a time when large enterprises no longer have the luxury of waiting for extended time periods to gain the anticipated business benefits.

Instead, the future enterprise needs to be more agile, flexible, automated, connected and interconnected. To take operational efficiency and commercial effectiveness to the next level, it will have to drive efficiency throughout its supply chains – from components & design, through manufacturing and creation, to logistics, fulfilment and end customer offers. This requires telecoms offers to be both segmented and verticalized, with each segmented offering addressing enterprises’ varying connectivity and security needs.

Verticalization – creating standardized but configurable offers tailored for the needs of a specific industry vertical – will be a key strategy and drive specialization of B2B service providers.

Connectivity will no longer be a vanilla service that can be supplied by any B2B service provider but will be tailored to the needs of the enterprise, and combined with specialist applications and knowledge to adapt offerings to the needs of verticalized business models, digital operations and supply chains. CSPs will supply these configurable verticalized applications with a tailored mix of bandwidth, latency and availability in order to comply with operational requirements, industry-specific standards, mandates and laws. Importantly, they will also provide assurance services to ensure that connected enterprises stay connected.

Operations and going wide

For many years we’ve talked about digital transformation of the enterprise – the adoption of digital technologies into all areas of business – but this concept was often criticized for being too broad in focus, and too preoccupied by the journey (the technologies) rather than the destination (the business benefits).

Shifting the focus from the process of digital transformation to the state of operating as a connected or smart enterprise is vital. Enterprises are no longer digitalizing for the first time, but evolving their digital capabilities and connecting their digital silos to widen digitalization throughout their operations, creating new opportunities for CSPs in the process.

Rather than focusing on technology and a specific end state, smart enterprises recognize that digitalization is really about having the capability to continuously change and adapt to both customer needs and market opportunities.

This is a transformation of approach rather than of technology.

Addressing this need requires CSPs to harness their capabilities to create an architecture and an organization that can flex and respond to customer change more dynamically. In the era of dynamic enterprises, CSPs and their customers will move away from a single large transformation towards the idea that smarter business is delivered through continuous micropivots that adjust the organization’s course. This is both less disruptive and less risky and puts technology into the position it should always have occupied – as an engine of business success. It is enabled by the SDN/NFV architecture, which provides the ability to automate, customize and streamline services – giving CSPs far greater control of the network experience – and controlled, configured, packaged and consumed via flexible and easy-to-use digital support systems.

Boosting EX

“Companies are facing an exodus of employees who are exhausted and overwhelmed, questioning what work means, and thinking through their options…Providing top-notch EX is not just lip service; it requires a profound reorientation away from a traditional top-down model to one based on the fundamentals of design thinking.” McKinsey, September 2021.

People are a fundamental component of efficient and effective enterprise operations. Employee experience (EX) is something that is high on many enterprises’ agenda because it is strongly correlated with operational effectiveness and customer experience. McKinsey research, for example, shows that employees who report a positive EX have 16 times the engagement level of employees with a negative experience, and are eight times less likely to leave the organization (McKinsey Employee Experience Survey, 2020).

A key component of employee experience is providing employees with tools that are easy to use and help them do their job effectively and efficiently. For enterprises this means ensuring the network experience meets their employees’ expectations wherever they’re connecting from, and designing digital solutions with the employees’ needs in mind to meet their evolving expectations of digital tools and experiences.

Supplying an accurate and proactive notification of service disruptions and advice is an area where CSPs can demonstrate their value to enterprise customers. For example:

• fast and accurate notification of unplanned disruptions avoids the need for enterprise employees to call the contact center. Better communication during fault resolution supports a better customer experience
• prior notification of planned engineering means enterprises can decide how best to minimize the impact on their operations
• proactive notification of any remediation (eg payment against a service-level guarantee) avoids the need for the customer to call the contact center and request compensation – reducing the workload on both enterprise employees and CSRs.

Taking a more proactive and personalized approach to communicating fault management improves operational performance of CSPs and enterprises. It also boosts EX within both organizations and differentiates the service offering from that of other players

Examples of CSPs supporting enterprise innovation

Ford’s smart manufacturing supported by Vodafone UK

The Ford Motor Company is using a 4G/5G private network from Vodafone UK in its electric vehicle plant to analyse and control laser welding machines. Sensors installed throughout its electric vehicle factory in Essex, combined with low latency connectivity, enable end-to-end monitoring that allows machinery to be adjusted within milliseconds to optimize efficiency and maximize the quality of the finished products. Ford also uses its new private network to optimize maintenance and minimise downtime. Ford’s equipment suppliers can use AR and VR headsets along with digital twins to provide remote support, test new configurations and develop optimal solutions, without disrupting production. In addition to low latency, high-bandwidth connectivity, the Vodafone-supplied private network gives Ford control over provisioning and administration processes, such as activating and deactivating SIM cards.

KPN empowers Europe’s biggest port to become smarter

The Port of Rotterdam is Europe’s largest port and also one of its smartest. Its Smart Infrastructure programme has seen it transform from a physical to a digital port with the aim that an increasing number of functions will be autonomous by 2030. The unmanned container terminal already uses autonomous cranes and remote-controlled trucks on the Maasvlakte. By 2030 it aims to be receiving fully autonomous ships. The port has also developed a digital twin to give it realtime insights into the operation of the port, and has deployed IoT sensors to measure water movement, turbidity and pressure to help with efficiency and to meet its green objectives.

Verizon Media supports Marriott’s new sales strategy

Marriott created a campaign with Verizon Media during the Covid crisis called ‘Browse, Shop and Buy’ which helped it secure tens of thousands of bookings in the first few months. Data insight revealed that travellers wanted to take more trips locally and that cleanliness and sanitization were important to them. This meant taking a more localized approach to travel and saw Marriott working with Verizon Media to develop an interactive mobile tool that made personalized destination recommendations based on how far customers wanted to drive. Destination content was tailored in real-time based on in-unit engagement from audiences in 30 US cities. The result was clickthrough rates (CTR) of 4.78% which were 4.5 times greater than benchmarks for mobile interactive ad units. Clickthrough rates to Marriott.com were 12% – double Verizon’s benchmark of 6%.

Technology enablers of CSP success in the large enterprise market

Success in the large enterprise market requires an operating model that makes it easier for enterprises to buy what they need, lowers the cost and time required to configure services, and enables CSPs to adapt their offers as the needs of large enterprises evolve. As enterprises become more connected, the ability to create advanced offers around service continuity is a unique selling point for CSPs that are able to help their customers diagnose faults faster and minimize disruptions to their operations.