Digital transformation as opportunity to improve services

Shane Minogue, senior market analyst for telecommunications, International Data Corp. (IDC) Australia and New Zealand

The process of digital transformation (DX) is already on the third platform—cloud and data—and companies that are able to leverage on it are the ones that are likely to thrive.

“The ongoing technology shift has been happening for years,” said Shane Minogue, senior market analyst for telecommunications, International Data Corp. (IDC) Australia and New Zealand. “But digital transformation is not just the transformation of digital things; it is business transformation in the digital era.”

Minogue is one of the keynote speakers in the annual Asian Carriers Conference held in Cebu.

“The way IDC looks today is that the first platform was mainframe computing,” he explained. “The second platform was your typical office environment: the PC, the front end computing, and the third platform is the cloud, social, mobile, and big data.”

“It is impacting every facet of the organization,” he said.

Analytics

Now that everything has been put in place such as the mindset to transform and the infrastructure, companies can now use cloud and analytics “to better understand consumers and to make these changes.”

“That’s the future of telcos is using their data for profitable means outside of just addressing their own concerns,” Minogue said. “They can actually create new revenue streams out of it.”

According to Minogue, digital transformation is used in different ways.

“We use data to simply look at what happened and to explain,” he said. “We do that today in most organizations and we say we look at our market share three months after the activity and go all ‘oh we went down.’”

For today’s DX, companies are now entering the stage where they can use data to predict what would happen soon.

“We see a lot of customers complaining about (say) our activity on Facebook,” Minogue explained. “And then, we say what we’re going see a drop if you don’t address it. That is how you start monetizing it so you can actually sell that information to related industries to help their organizations.”

Minogue stressed the key to digital transformation, first of all, is about changing the strategy.

“But, second of all, it is about creating new revenue streams to benefit from.”

He explained how telcos are facing a very tough time after finishing their investments in establishing 4G connection but many people are already predicting the onset of 5G in four-year time.

“They cannot charge customers higher fees because they won’t put up with that,” he said. “I think the adjustment is additional services. Consumers will be willing to give a greater share of their wallets to what telcos are offering if they provide meaningful solutions.”

Solutions

And with meaningful solutions, Minogue meant content.

“Content is king,” he said. “We see a high level of inertia in telecommunication services. They don’t really want to talk about their broadband or mobile.”

What they are happy to talk about are partnerships with content companies such as entertainment companies that offer video or music streaming.

“If you can capture your customer engagement using content it can increase customers’ stickiness and just benefit your long-term customer relationships.”

He said companies should move away from price competition and move to quality of service competition.

“We have to move away from the race to the bottom for telcos and start moving toward a more continued added services,” he said.

“In the past we looked at it as a threat, but the important thing for telcos is that it is in fact an opportunity,” Minogue added.