Make it happen – Strategies for success in enterprise 5G
An operator whose business is 95% consumer today will find it difficult to build B2B capabilities that require different skills, experience and market access. For operators that do decide to target enterprises with 5G services, here are some important steps to take.
Mark Newman
02 Mar 2021
Make it happen – Strategies for success in enterprise 5G
This is an excerpt from out report Enterprise 5G: The role of the telco. Download it now for the full insight.
Communications service providers (CSPs) may be tempted to jump headfirst into the enterprise 5G business, but they won’t all be successful. In countries that have four or five national mobile operators, it is likely that only one or two will have enough experience serving enterprises to succeed. An operator whose business is 95% consumer today will find it difficult to build B2B capabilities that require different skills, experience and market access. For operators that do decide to target enterprises with 5G services, here are some important steps to take:
Consider connectivity
Many CSPs believe that to grow revenue they must develop new capabilities and offer services beyond connectivity. But 5G’s ability to deliver low-latency connectivity and speeds that come close to those achieved over fiber mean there is a huge opportunity to grow basic connectivity. For small and medium-sized enterprises this could be as simple as selling 5G to provide resiliency or redundancy, or basic broadband connectivity for new or temporary sites. But operators will have to improve the connectivity experience to be successful. This means offering the ability to customize or configure connectivity to meet the requirements of specific users or applications, and providing a fully digital experience that ideally puts the customer in control of managing their own connectivity requirements.
Don’t be a follower
Over the past 30 years, mobile operators around the world have built very similar networks using similar strategies in terms of deployment, services, pricing and support systems. But many CSPs will go their own way in developing networks and strategies to support the B2B market. They will focus on specific markets, particular customer bases, and they will develop business models that will work for them. As such, there will be no 5G enterprise blueprint, and operators will need to choose their own paths rather than following others.
Weigh partnerships
The telecommunications industry has been talking about the value of partnerships for several years without always being clear about their commercial rationale. CSPs partner with over-the-top (OTT) providers to increase loyalty and customer lifetime value. They do not make a profit from the services that they resell, and the deals may even be loss-making. When it comes to partnerships for 5G enterprise services, operators could take the same approach. Partnering with hyperscale cloud providers may be the best way to sell more 5G connections. On the other hand, CSPs may choose partnerships that will let them claim a bigger share in the sale of full, end-to-end solutions or that allow them to own the relationship with the enterprise customer.
Let customers lead
CSPs have long adopted a “build it and they will come” model, but this approach will not work in the enterprise market where each customer has a specific set of requirements. Mobile operators are finding special rules, characteristics and approaches to deployment of technology in every vertical. Without engaging potential customers to work through these challenges, it will not be possible to decide which network capabilities to exploit or to develop, or which support systems will help them monetize the opportunity.
Strike a balance
While operators will need to spend time investigating the requirements of verticals, they will not be able to build a profitable business if they have to customize every solution. CSPs should also focus on developing horizontal capabilities that are repeatable across sectors. For example, an operator could sell security-as-a-service to companies in all kinds of industries.
Choose verticals wisely
Even the world’s largest B2B telecoms operators are discovering that they may be able to serve only a few verticals with end-to-end ICT solutions. To become service providers of choice in those sectors, CSPs may need to acquire specialist ICT providers that already have expertise (and customers) in a given market. Vodafone is a good example of an operator that is using this approach as it has committed to serving business customers in the sometimes overlapping automotive and insurance industries.
Decide role in MPNs
The explosion of interest in mobile private networks (MPNs) has forced CSPs to quickly put together market propositions that meet the many and varied requirements of enterprises. Operators likely will focus on the same verticals in their MPN strategies as they do in selling 5G services more broadly. Forging strong partnerships with systems integrators and network equipment vendors will be essential for operators to participate in MPNs.
Build for agility
5G gives mobile operators the opportunity to innovate and co-create with business customers. While customer centricity is essential, operators will also need flexible network and IT architectures. Slow, costly customization and integration will not work. Enterprises necessarily will take an experimental approach to exploiting 5G’s capabilities, so mobile operators will need to adopt cloud native technology and move workloads to the public cloud in order to deliver flexible, scalable solutions. TM Forum members are developing the Open Digital Architecture (ODA) as a blueprint for modular, cloud-based, open digital platforms that can be orchestrated using AI. ODA replaces traditional operational and business support systems (OSS/BSS) with a new approach to building software for the telecoms industry. To find out how ODA can help in targeting enterprise 5G, please contact George Glass, and for more information read the white paper below.
Let customers lead
CSPs have long adopted a “build it and they will come” model, but this approach will not work in the enterprise market where each customer has a specific set of requirements. Mobile operators are finding special rules, characteristics and approaches to deployment of technology in every vertical. Without engaging potential customers to work through these challenges, it will not be possible to decide which network capabilities to exploit or to develop, or which support systems will help them monetize the opportunity.
Strike a balance
While operators will need to spend time investigating the requirements of verticals, they will not be able to build a profitable business if they have to customize every solution. CSPs should also focus on developing horizontal capabilities that are repeatable across sectors. For example, an operator could sell security-as-a-service to companies in all kinds of industries.
Choose verticalswisely
Even the world’s largest B2B telecoms operators are discovering that they may be able to serve only a few verticals with end-to-end ICT solutions. To become service providers of choice in those sectors, CSPs may need to acquire specialist ICT providers that already have expertise (and customers) in a given market. Vodafone is a good example of an operator that is using this approach as it has committed to serving business customers in the sometimes overlapping automotive and insurance industries.
Decide role in MPNs
The explosion of interest in mobile private networks (MPNs) has forced CSPs to quickly put together market propositions that meet the many and varied requirements of enterprises. Operators likely will focus on the same verticals in their MPN strategies as they do in selling 5G services more broadly. Forging strong partnerships with systems integrators and network equipment vendors will be essential for operators to participate in MPNs.
Build for agility
5G gives mobile operators the opportunity to innovate and co-create with business customers. While customer centricity is essential, operators will also need flexible network and IT architectures. Slow, costly customization and integration will not work. Enterprises necessarily will take an experimental approach to exploiting 5G’s capabilities, so mobile operators will need to adopt cloud native technology and move workloads to the public cloud in order to deliver flexible, scalable solutions. TM Forum members are developing the Open Digital Architecture (ODA) as a blueprint for modular, cloudbased, open digital platforms that can be orchestrated using AI. ODA replaces traditional operational and business support systems (OSS/BSS) with a new approach to building software for the telecoms industry. To find out how ODA can help in targeting enterprise 5G, please contact George Glass, and for more information read this white paper.
Improve BSS
Today’s enterprise BSS stacks are simply not designed to exploit the versatility of 5G, and it will be a while before operators understand fully which 5G capabilities are most relevant to the verticals they are targeting. It is clear, however, that 5G services will require CSPs to participate in digital ecosystems. In addition, enterprises expect control, self-service and real-time capabilities. CSPs need to start deploying these capabilities today to ensure they are ready when enterprises move beyond experimenting with 5G. Again, the ODA can help operators reimagine their core commerce systems for agility. In addition, TM Forum members are working on a Business Capability Map and Business Architecture to help CSPs understand their unique capabilities and how to monetize 5G services. To learn more about this work, please contact Joann O’Brien., “to make the most of future investments, organizations must learn to combine their best talents, look past familiar or trendy offerings and embrace the technologies designed to actually solve their worst problems.”
Designing the business of the future
There are four pillars that are critical to guide organizations thinking when they are assessing strategies for business transformation.
The right business model — Becoming digital is not simply about taking existing products or customer interactions and experiences and putting them online. Enduring success in the digital economy means fundamentally rethinking how business is conducted today. The way in which organizations get products to market through centralised catalogues and move to deliver entirely new consumption models (such as pervasive digital services and subscriptions rather than one off purchases) in addition to how consumers now purchase and use offerings is fundamental.
The right partners — Businesses that work together with digital partners across industry borders achieve far beyond what any individual business could do on its own in the ever-changing digital world. To achieve this, businesses must now integrate with a myriad of existing and 3rd party systems, streamline and simplify business processes, and develop efficient improvements that decrease operational risk and expense. The sharing of knowledge and unique experiences to develop new applications, products and services will become essential.
The right technology — Not all platforms are created equal, and that will become painfully evident to those that don’t choose wisely and bravely. The cost of legacy system infrastructure maintenance, integration and operations will become prohibitive when digital native competitors operate at a fraction of the cost. Getting there will be a challenge and enhancing legacy systems is not enough. A complete re-architecture that takes advantage of cloud first capabilities and micro services –– is now essential. To remain competitive, solutions must be SaaS, must run in the cloud, and must be a platform with the ability to unify and streamline increasingly complex operations.
The right mindset — Providing evolved customer experiences regardless of who those customers are—from consumers, to vendors, to partners - is vital to digital success, but it’s only half the equation. History has already shown the lesson - only 12.2% of the Fortune 500 companies in 1955 were still on the list in 2014. To survive and, most importantly, flourish a digital culture must be integrated at all levels of the organization to instill the mentality of agility and continuous learning the digital economy demands.
There is no one size fits all approach to digital transformation, each strategy will be unique to each organization. However, a focus of balancing activities across the four pillars provides the compass to guide a successful transformation.
CSG understands both the challenge and the urgency of change in an ultra-competitive market. Organizations are trapped in a vicious circle of declining margins and the need to invest to change the status quo. Creating a compelling business case to fund new technology and innovation is one of the most significant hurdles.
That’s why we’re working on digital transformation, IoT strategies and cloud-first solutions with our customers now. Our advantage is that we are experts on both sides of the equation—we know how to optimize and get the best out of legacy systems to drive down costs and free up funding, and we have the technology and the innovation to enable a true digital business transformation.
As everyone continues to invest in and research digital transformation strategies it’s also worth looking at what’s driving the urgency. We have been tracking five key trends that we feel are driving the urgent need for digital transformation:
The Internet of Things is growing exponentially, and businesses must be ready to grow with it. Back in 2014, the number of devices surpassed the number of people on Earth. Fast forward to 2021, and the Internet of Things will support a staggering 46 billion connected devices. According to Constellation Research, nearly 50 percent of businesses have an established strategy with production IoT apps, or are piloting IoT projects. These businesses realize they must revamp their traditional business strategy to a digital business strategy. The amount of data connected devices and services generate, and the different systems on which they operate means old, legacy systems must be changed to digital enablement platforms with native cloud capabilities and microservices. This will enable them to keep up with the demand of seamless customer experience and big data vastness.
The need to create digital partner ecosystems. In an ultra-competitive market, partnering with companies that augment your platforms, networks, services and customer experience will be key. International Data Corporation predicts that by this year, over 50 percent of large enterprises, and 80 percent of enterprises with advanced digital transformation strategies will design or partner with industry platforms, developers and service providers.
Rapid cloud adoption - businesses are doubling down on cloud adoption. The demands on operations and integration are evolving so rapidly they will break legacy systems, they cannot just be upgraded, they need to be changed. A complete re-architecture that takes advantage of cloud native capabilities and micro services is now essential. Half of telecommunications companies rely on a hybrid cloud, where they own their own data centers but can fall back on the public cloud for additional capacity and bandwidth. Look for hybrid clouds to increase in popularity in 2018—hybrid cloud adoption tripled from 2016 to 2017.
Big data analytics will be worth more than gold. People are consuming over 2.5 quintillion bytes of data every day—that’s the capacity of about 2.4 trillion iPhone Xs. The data from our texts, tweets and web browsing is created on different systems, so there needs to be a common way to make sense of it all. Businesses are investing in big data analytics, spending up to $203 billion by 2020. It’s not just about the explosion of data—it’s the way in which we analyze and use this data to enhance what we do across all areas of society that makes it so powerful. It’s the way we combine data and intelligence to power innovative and transformational smart services with data exchange models and business model innovation. It’s clear that big data analysis, the cloud and other related technologies will enable this move from data to knowledge to outcome.
Artificial intelligence and machine learning are the next competitive advantage. AI can and will “think ahead.” According to MIT Sloan Management Review, nearly 85 percent of businesses think AI will give their companies a competitive advantage, and 41 percent expect large effects from AI within five years. We are still at the tip of the iceberg and 2018 is expected to be a year of exploration in AI. Digital business models that hinge on AI and IoT such as "as-a-service" and "mass personalization at scale" require large amounts of data and computing power to execute. In addition, the connections for IoT are in the cloud and AI processing will increasingly rely on cloud-based services to function. These trends will continue to drive investment in SaaS/cloud and big data technologies
About CSG
CSG simplifies the complexity of business transformation in the digital age for the most respected communications, media and entertainment service providers worldwide. With over 35 years of experience, CSG delivers revenue management, customer experience and digital monetization solutions for every stage of the customer lifecycle. The company is the trusted partner driving digital transformation for leading global brands, including Arrow Electronics, AT&T, Bharti Airtel, Charter Communications, Comcast, DISH, Eastlink, iflix, MTN, TalkTalk, Telefonica, Telstra and Verizon.
CSG has one vision: flexible, seamless, limitless communications, information and content services for everyone.
Advertisers are seeking to improve their effectiveness by reaching target audiences with highly relevant media in the appropriate context, thereby engaging the audience with content that benefits them. To do this, they need a clear understanding of audience profile and context at any given time.
The digital advertising market continues to grow rapidly in the US, with the mobile share of spending on digital advertising passing that of desktops in 2016, and continuing that trend beyond (see Figure 1-2).
This growth in digital ad spending is a global phenomenon, though mobile is growing proportionally faster in the US (see Figure 1-3).
Real-time bidding (RTB) is driving a lot of digital advertising today. It refers to the buying and selling of online ad impressions through programmatic, real-time auctions that occur in the time it takes a webpage to load. As an ad impression loads in a user’s browser, information about the page (or app) in which it is contained and the user viewing it is passed to an ad exchange, which auctions it off to the advertiser willing to pay the highest price for it. The winning bidder’s ad is then loaded nearly instantly; the whole process takes just a small fraction of a second to complete.
Advertisers typically use demand-side platforms to help them decide which ad impressions to purchase and how much to bid on them based on a variety of factors, such as the sites they appear on and the previous behavior of the users loading them. For example, a particular retailer might recognize that a user has previously been on its site looking at specific merchandise and therefore may be prepared to pay more than another retailer to serve ads to her. The price of impressions is determined in real time, based on what buyers are willing to pay, hence the name ‘real-time bidding’.
RTB is important because it allows advertisers to target their ads to specific users instead of just broadly purchasing banner real estate on sites. Service providers often have much of the profiling information advertisers are looking for, including location, online behavior, preferences and demographic information, which provides the advertiser with a clearer target.
2. Financial services
There are many opportunities across all segments of financial services. For example financial services companies can analyze various events in the context of the customer’s lifecycle to offer relevant services, such as auto insurance for a car shopper, loans or credit for customers planning significant purchases, promotions for customers in proximity of retail bank branches, or financial services for frequent travelers. Importantly, institutions may also be able to use this information in conjunction with customer-retention campaigns.
Another key use of this data is for credit card companies and banks to detect and address fraud.
3. Managing traffic
Governments are interested in managing their public infrastructure assets to improve user experience and efficiency, reduce journey length, alleviate congestion and plan changes. Again, data from mobile service providers can be used to optimize standard schedules and to better understand and plan for traffic at special events, in detail, including profiles of those traveling.
Logistics companies may also find this information valuable in optimizing their delivery routes and methods.
4. Optimizing billboard advertising
Closely related to traffic flow (whether motorized or on foot) is the optimization of billboards, and in particular digital signage that may be located on busy thoroughfares or near various attractions. By understanding traffic patterns advertisers can deliver highly relevant content thorough digital signage and other media, shifting messages and content along with traffic characteristics.
5. Public transportation
Public transportation authorities are constantly aiming to improve both the passenger’s experience and operational efficiency of their transportation systems. This might include analyzing and reducing journey length, alleviating congestion, or understanding passenger waiting time at stations and stops. This data can be provided by service providers and used to optimize schedules, understand and plan for traffic at special events, in detail, even by passenger profile. It can also be used to help manage partnerships, such as with retailers or advertisers, resulting in additional revenue.
6. Siting and staffing facilities
Retailers want to know where to site their facilities to maximize store revenues and efficiency, especially for new store openings. Among the most important factors in making these decisions is being able to profile the movement and behavior of the target audience.
Understanding customer profiles in conjunction with travel patterns, spending history, interests and demographic information can help determine were to position new stores, as well as how many staff members might be required to service customers at any given time of the day or day of the week.
Retailers may also use this information competitively, tracking traffic trends around their competitors’ locations. Similarly, real estate companies may use it for the siting of commercial and residential facilities.
7. Entertainment and events
There are many entertainment opportunities, perhaps the most popular being sporting events, but the same principles apply to concerts and other special events.
Venues can use information to manage attendee traffic, sell tickets, target premium services (such as providing high-quality video clips), and promote fan-related merchandise. Gaming houses can also use this information to deliver relevant promotions to targeted profiles.
8. Internet of Things
The number of connected objects representing the IoT ecosystem is expected to reach tens of billions of devices over the next decade. A number of service providers already have active programs addressing smart homes, cars, health and cities, and could add value to them all with various types of information, including location, geo-spatial and much more. As we noted earlier, potential uses for customer data by third parties will grow as the digital economy continues to expand. Most of all, communications service providers, and especially mobile operators, have a unique contribution to make through their access to their customers’ data which, further down the line could well become a bargaining chip concerning the role(s) they play in digital ecosystems.
20 years as a chief analyst and research director covering the telecoms sector with a focus on operator business models, transformation and strategies for developing new revenue streams.