When the telecom giant Vodafone decided to shift its entire global enterprise to a single digital environment, it clearly had its 300 million customers — and its future profitability — in mind.
The move to an enterprise-wide digital core standardized more than 80% of Vodafone’s core business processes and boosted automation levels to over 60% across the company, yielding not only new cost synergies and efficiencies for the company. But just as importantly, it freed employees to focus on meeting customer expectations, and on innovating to develop new products and services that emphasize a fuller, value-driven customer experience.
Vodafone, like many companies across the business landscape, is prioritizing digital investments — in 5G, artificial intelligence, machine learning, the Internet of Things (IoT), etc. — to help them deliver the enriched interactions, experiences and outcomes that their consumer and enterprise customers increasingly demand.
Ultimately, whether they compete in telecom, tech or some other industry, companies that successfully couple data intelligence and digital technologies with a relentless focus on the customer will be the ones best equipped to develop the compelling services and consistently outstanding customer experiences that will sustain them in an increasingly experience-focused and outcome-driven world.
Simply put, the companies that are best at collecting, protecting and responding to data from customers, connected devices and partners will be in the best position to delight their customers with experiences.
As difficult as it can be to accurately predict the direction of an industry or a market, it’s clear where my industry, telecom, is heading. I expect that by 2025, telecom revenue from non-communication services will overtake that of basic communication services. Enabled by the aforementioned digital technologies, this transformation from product-centric to customer-experience-centric already is well underway.
Moves like Vodafone’s are designed to eliminate gaps between the back office, customer engagement and network operations, in order to deliver personalized customer experiences across all channels. As Vodafone realized early in its digital transformation, it needed to put an enterprise-wide digital core in place to house and connect these advanced digital capabilities to their back and front offices, and to customers.
To transform themselves from product-focused commodity sellers to customer-focused service providers, we see companies leaning on several digital-forward approaches and strategies, all integrated within or connected to that digital core. One of them is the use of experience management tools to put customer experience and customer value at the center of everything they do.
In the experience economy that is taking shape today, the cycle time to sense, analyze and respond to the customer experience carries increasing competitive weight. Experience management, or XM, synthesizes operational performance data (O-data, which explains what is happening), with experience data (X-data, which explains why it is happening) gathered in the moment from customers, employees and partners.
As telecom companies like Three Ireland are discovering, XM data yields uniquely valuable insight into how operational factors impact the customer and employee experiences, creating a feedback loop that shows companies how to improve and refine the experiences their products and services, and their work environment, provide. Using a digital XM platform, Three Ireland increased its Net Promoter Score by 7% in one year, achieved record-high levels of customer intention to stay, and made customer experience a top-tier metric across the organization.
Ultimately, experience management uncovers pathways for companies to extend their customer value by anticipating and fulfilling customer needs proactively, based on a truly unified 360-degree view of customer experience across all touchpoints and channels.
Because an outstanding customer experience depends on engaged employees, companies are applying the same XM approaches to the employee experience. Likewise, they can apply those XM capabilities to their business relationships, to better understand their partners and stakeholders.
Which leads me to another prediction: By 2025, I expect business relationships will be driving a paradigm shift in the telecom business, whereby companies create multi-industry business ecosystems in which they align interests and combine strengths to create experience-based products and services that add value for customers and provide inroads into markets other than connectivity.
Competing as an ecosystem, they and their partners can deliver context-based intelligent connectivity and digital services at the edge, enabled by a digital platform to which all members of the ecosystem (and their customers, too) are connected. As the launch point for distributed B2B and B2C services, such a platform should enable all participants in an ecosystem to configure, price, quote and settle complex offerings where connectivity, infrastructure, solutions and services are combined.
From 5G-driven automotive telematics-based services to virtualization, the possibilities for telecom businesses to develop new revenue streams and explore new business models are seemingly endless. Companies like Verizon already are going down that road, with 5G-enabled data processing and analytics services at the edge. By 2025, I expect businesses in a wide range of industries, including telecom, to be leveraging customer experience insight and business ecosystems to develop innovative new business models and services as a way to compete with disrupters and new market entrants.
With the right combination of business models, data intelligence and digital capabilities, companies can diversify their revenue streams by transforming themselves into true enablers of digital transformation (for businesses) and a digital life (for consumers) with value-added services that sit on top of, or around, the network.
According to estimates by the World Economic Forum and Accenture, there’s $32 billion in value for telecom companies to unlock through 2025 by redefining customer engagement, and another $940 billion to unlock by extending revenue streams beyond connectivity. That’s reason enough for companies to put their customers at the center of everything they do.
About the Author:
Carl Kehres is Global Vice President, Telecommunications, for SAP SE. He has spent the past 20+ years helping the largest global telecommunications companies with their transformation projects.