Culture – not technology – is the key to digital transformation for telcos

Operators’ Digital Transformation strategies will only be effective if they place employees at the heart of programmes and ensure a cultural shift, as a well as a technical one. This was the resounding message delivered during a Corporate Transformation panel at Total Telecom Congress 2018. Featuring speakers from Facebook, OTE Group and Bakcell, the discussion was chaired by Michael Dargue, Principal Analyst at Cartesian, who started the session by stating that corporate transformation is one of the biggest issues facing telcos today…

Operators’ Digital Transformation strategies will only be effective if they place employees at the heart of programmes and ensure a cultural shift, as a well as a technical one.

This was the resounding message delivered during a Corporate Transformation panel at Total Telecom Congress 2018.

Featuring speakers from Facebook, OTE Group and Bakcell, the discussion was chaired by Michael Dargue, Principal Analyst at Cartesian, who started the session by stating that corporate transformation is one of the biggest issues facing telcos today.

“It is clear the telcos need to be doing something differently if they are going to succeed, survive and flourish in years ahead,” he added.

Dargue went on to warn that success is not a given, highlighting that only 40% of Digital Transformation programmes are successful, according to industry reports. Cartesian’s own survey, said Dargue, showed that half of respondents felt the change required was overwhelming.

“Digital Transformation is a people programme as well,” he continued. “The main issues described by respondents certainly weren’t technical.”

The three panellists agreed with Dargue’s assessment, with Nikolai Beckers, CEO at Bakcell, describing the cultural shift towards innovation and agility that is needed as an “enormous challenge.”

“Digital Transformation is, of course, on the forefront of all telco industry managers’ minds – every CEO has to take care of it and, if not, he is doomed,” he said. “But how do we do that? […] We are big organisations which are run on cost control, structure and clear processes and, of course, we have targets; we have to create revenue and profitability which doesn’t go very well with the cultural aspects of innovation and agility. Overall, as an industry, we have to do it but the challenges ahead of us are enormous.”

Yannis Konstantinidis, Chief Strategy, Transformation & Wholesale Officer at OTE Group, underlined how important the cultural aspect was by describing his own’s company Digital Transformation strategy, with one of the three main areas in the programme being how the company prepares the entire organisation to move and drive the programme.

Moving on to address a comment from Dargue that there is a vision of where telcos need to get to but how they get there remains unclear, Beckers, Konstantinidis and Daniel Augsten, Industry Leader & Head of Tech and Telco at Facebook, all concurred but had differing views on where telcos should focus.

“The direction is very clear – the problem is in the detail and really making it happen,” said Beckers. “One thing which most telcos really have to focus on is the internal culture of the company which is, in general, too bureaucratic and too slow.”

While Konstantinidis agreed culture was important, he also thought technical aspects played a key role, highlighting a new operational model as essential for speeding up time-to-market.

“It is both cultural and technical,” he continued. “[…] It is true we are very bureaucratic but, more particularly, where we are lagging behind is time-to-market. In this area, we need more agility and we need to rethink the operational model we are using.”

In looking for a solution to the cultural challenge, Augsten proposed that telcos look to OTT players.

“From a cultural point of view, purpose is very important – you need an organization where everyone in it can tell you what the purpose of the organisation is and the purpose of what you are doing,” he said. “That is strongly lived within OTT players – whoever you ask in the company, they will tell you the purpose of the business.!

As the panel session drew to a close, the comparison of telcos to OTTs continued with other telco qualities that could be challenging for Digital Transformation including an aversion to risk and pressure from stake holders, as well as a need to streamline their businesses.

However, the session ended on a positive note with Beckers highlighting 5G as a game-changer for telcos: “5G is a completely new opportunity and in combination with Digital Transformation, should give us new life and new opportunities.”