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February 2017 | www.tmforum.org

DIGITAL
TRANSFORMATION:
NAVIGATING THE
WAY TO SUCCESS

EXECUTIVE SUMMARY
Sponsored by:
INSIGHTS RESE ARCH

DIGITAL TRANSFORMATION:
NAVIGATING THE WAY TO SUCCESS
This report is free for all employees of TM Forum member organizations to download by registering on our website.
To purchase this report, non-members should contact aturner@tmforum.org

Report author:
Rob Rich
Managing Director, Insights Research, TM Forum
rrich@tmforum.org

Senior Director, Editorial:

Annie Turner
aturner@tmforum.org

Managing Editor:
Dawn Bushaus
dbushaus@tmforum.org

Editor, Digital Content:

Sarah Wray
swray@tmforum.org

Content Delivery and Program Manager:

Paul Davis
pdavis@tmforum.org

Content Delivery Coordinator:

Joia Tulloch
jtulloch@tmforum.org
The big picture
Head of Publications Sales:
Dominic Offord Section 1
dofford@tmforum.org
Why is transformation necessary?
Director, Solutions Marketing:
Charlotte Lewis Section 2
clewis@tmforum.org Service providers speak: Transformation gets underway
Senior Director, Research & Content: Section 3
Aaron Richard Earl Boasman
aboasman@tmforum.org What are the challenges and critical success factors?
Advisor: Section 4
Ken Dilbeck, VP, Collaborative R&D, TM Forum Digital maturity models: Building a transformation roadmap
Report Design:
Intuitive Design UK Ltd
Section 5
info@intuitive-design.co.uk Make it happen: How to accelerate transformation
Published by: Sponsored features
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2 Digital transformation: Navigating the way to success

 INSIGHTS RESEARCH

THE BIG PICTURE

Welcome to our first Insights Research
report on digital transformation

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INSIGHTS RESE ARCH

For communications service providers, digital transformation is not just an ideal – it’s a mandate.
Customers want to be in control of their own services, with access to new ones on demand. The business
models of digital natives like Amazon and Google provide this kind of flexibility and threaten to relegate
network operators to delivering only connectivity if they don’t transform their business processes,
networks and support systems.

While many operators have made progress with transformation
projects – we highlight several in this report and in our Case
Study Handbook 2017 – there is still no single agreed-upon
definition of what digital transformation entails, nor is there any
kind of industry-specific map to help service providers navigate
the way to success.
For this report, we surveyed 64 executives from 49
communications service providers about their plans for
transformation. More than half have already started projects,
and every executive we surveyed or interviewed said they
believe transformation is necessary.
None of this is easy, but despite that, respondents to our survey
said they are cautiously optimistic about their chances for
success with transformation. While their reasons vary, their
confidence and resolve is encouraging.
CHARTING THE COURSE
Importantly, respondents believe lack of a clear roadmap is
holding communications service providers back. One tool that
shows particular promise in addressing this is a digital maturity
model, combined with a series of clear metrics.

Maturity models force organizations to properly structure the

STRONG LEADERSHIP IS CRUCIAL
While technology is a critical enabler, digital transformation at
its heart is a business issue and requires strong leadership.
Customer centricity is the most important reason for
transformation, and management must lead the way to
improvements by setting the vision and goals, prioritizing
investments, directing and enabling resources, removing
roadblocks, and demanding performance.
problems to be addressed. They facilitate goals and plans, both
short and long term, and they provide a basis to help
organizations assess realistically where they are in their
transformation journey. They also facilitate benchmarking with
other organizations, provided they use common language.
Our research found that fewer than 30 percent of respondents
are using maturity models, and of the companies who are using
them, a large majority are using ‘home-grown’ models.

The organization must come together, evolving the culture
continually to meet business and market needs. Processes,
services, contracts and operations must be simplified everywhere,
but not at the cost of performance and certainly not by
compromising customer satisfaction. Improvements in governance
are necessary everywhere, but especially in data management.
TM Forum has begun developing an industry-wide Digital
Maturity Model & Metrics (DMMM) with the goal of launching
Phase 1 at TM Forum Live! 2017, which will be held May 15-18 in
Nice, France. In addition to the model itself, we also intend to
deliver a beta version of an app to help service providers assess
their progress, as well as provide initial results from early users.

READ THIS REPORT TO UNDERSTAND:

Why transformation is Which companies are making

Key drivers for transformation
necessary progress

Key dimensions or areas of

Strategies for making it happen Challenges to overcome
focus

What TM Forum is doing to

What a digital maturity model
Critical success factors develop an industry-agreed
is and how it can help
model and metrics

4 Digital transformation: Navigating the way to success

 INSIGHTS RESEARCH

NAVIGATING THE WAY TO SUCCESS

For communications service providers, digital transformation is not just an ideal – it’s a
mandate. Customers want to be in control of their own services, with access to new
ones on demand, and over-the-top providers are only too happy to oblige. To compete
network operators must digitally transform their networks, business processes and
operations, and to do that they need an industry-agreed digital maturity model.

What’s so great about transformation?

The rewards for successful digital transformation are huge:

9% 26% 12%
MORE MORE HIGHER
REVENUE PROFIT MARKET VALUATIONS

What are the drivers for communications service providers?

We asked 64 respondents at 49 network operators worldwide about the status of their
transformation programs and what the main drivers are:

48% Some progress, but it’s still early

22% Just starting implementation
14% In the planning phase
8% Aware of the need but have not started
8% Well along and reaping significant benefits

1 2 3 4 5 6
Stronger Business Operational Growth Potential Regulatory
customer agility efficiency opportunities of new and compliance
and product and
relationships and cost service innovation technology requirements
and brand reduction tied for fourth
place

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INSIGHTS RESE ARCH

How are network operators tackling transformation?

Developing Adopting digital

Moving Rolling
77% digital channels
for improved 76% business practices
(for example, digital 68% to digital
operations
65% out digital
services
experience marketing, sales, retail)

Developing digital channels and adopting digital business practices came out on top,
which is no surprise, given that improving relationships with customers is the biggest
reason for transformation

What are the key dimensions to consider?

1 2 3 4 5
Customer Culture Digital Technology Digital
strategy product

6 7 8 9
Digital Brand Partners Trust
operations

The customer dimension led all others by a hefty margin, scoring about 20% higher than
the number-two dimension, culture

Why is transformation so difficult?

1 Lack of clear vision and goals 7 Legal or regulatory requirements

2 Top management support 8 Aversion to risk

3 Complexity of processes, products, etc. 9 Budget/lack of resources

4 Cultural or organizational issues 10 Weak governance structures

5 Availability of skills 11 Lack of industry roadmap

6 No sense of urgency

Many of the barriers are related to leadership and organizational strategy, with the top
three all closely linked to management

6 Digital transformation: Navigating the way to success

 INSIGHTS RESEARCH

What are the critical success factors?

1 Top management support 6 Having an industry roadmap

2 Organizational alignment
3 Quality of the digital strategy
4 Having the right culture
5 Simplification of products, processes, etc.
7
Governance/change management and
data management tied for 7th place
8 Adequate financial resources
9 Access to the latest technology

One factor stands out as critical: top management support

How confident are operators about their chances for success?

47.6% Somewhat confident

28.6% Very confident
15.8% Neutral
3.1% Not very confident
3.1% Not confident at all

Network operators are cautiously optimistic but not as confident as their peers in
other industries

How can creating a digital maturity model help?

Reveal what’s most Create short- and Assess the Facilitate

important long-term goals journey’s progress benchmarking

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INSIGHTS RESE ARCH

Who’s using a digital maturity model?

51% No
21% Yes, a ‘home-grown’ model
21% I don’t know
8% Yes, a third-party model

Why are they using them?

75% 27% 35% 13% 33%

Defining a roadmap Benchmarking Near-term planning Directing project Measuring progress

for the organization and goal setting investments against goals

Without question, defining a roadmap for the organization to use is most important
because it provides a clear path across multiple dimensions

Download the new report here

http://bit.ly/DigitalTransformation2017

8 Digital transformation: Navigating the way to success

DOWNLOAD
THIS REPORT NOW

Interested in participating?
Contact Ken Dilbeck, Vice President,
Collaborative R&D, TM Forum
kdilbeck@tmforum.org