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Deloitte Au TMT b2b Igniting Telco Value Engine 241016 PDF
Deloitte Au TMT b2b Igniting Telco Value Engine 241016 PDF
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Historically, most global telecommunication carriers The transition from telecommunications
have focused on capturing growth in the consumer provider to an integrated ICT services company
is fraught with complexity. Many telcos have
segment. However, increasingly saturating mobile 03
extended their portfolio to include IT products
markets, disruption from OTT providers in core voice and services, either organically or through
and SMS services, and intense price competition is acquisitions, but have often failed to fully
integrate and leverage the combined portfolios.
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putting B2C markets under pressure. In contrast the
increasing demand of small business and enterprise As traditional telco operators explore relatively
clients for end to end ICT services presents a growth uncharted territory in B2B growth, important
choices emerge. The following paper provides
opportunity. In particular, demand for IT services is a perspective on the implications and
on the rise as businesses go digital. opportunities associated with these choices.
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01 Introduction
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Where to play 02
>Business model options
>Portfolio options
03
>Priority customers
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How to win
>Adopting a digital operating model
>Creating an integrated ICT
product portfolio
>Acquiring capabilities
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02 Where to play
Why B2B?
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02
Higher growth rates are the Global ICT Market Revenues and Growth
USD Billions
main attraction for telcos of B2B,
but higher net profit margins, 3,250 CAGR 2010-15 03
a client base willing to pay more 2,850
757 B2B Telecoms
for differentiated service, and a +2%
2,457 678 04
reasonable defense against over- 598
the-top substitution (at least for 1,192 B2B IT Services
now) also play a part. 989
+4%
785
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Perhaps the biggest challenge Strength in core data services is the backbone Data services are the
faced by telcos entering the ICT from which telcos expand into higher growth
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02 Where to play
02
Old revenue Current revenue New revenue
Opportunity: Opportunity: Opportunity:
Small and shrinking large and transient small and growing 03
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02 Where to play
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There is a range of business integration business requires highly skilled
models options within the labor (and associated recruitment and talent
management capabilities). In contrast, a
ICT portfolio. Each has a 03
capital intensive hosting business will require
unique set of considerations specific tools, technologies and platforms with
around P&L construct, margin technology sophistication and platform scale
as the key value driver.
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structure, investment needs,
and capability asks. As traditional telecom operators move into
new ICT portfolios, a shift in governance and
Telcos are traditionally capital intensive performance metrics is required to reflect the
businesses, but expanding from their different economics of the business they are
carriage products into services means in. Direct costs, for example, must be managed
getting to grips with a different commercial much more closely in a services business for
and operating model. For example, a system profitability to be maintained.
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02 Where to play
Direct Costs
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Operational Costs
50.5%
55.5%
37.6%
29.0%
18.0% 17.0% 10.9%
16.2%
3.3%
9.4% 7.0% 10.6%
5.4% 4.0% 1.5%
0
Connectivity Data Center Managed Managed IT Enabled Resale
Network Services IT Services Services
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To make the B2B value creation engine run you must
transform the operations and build new capabilities.
The key areas of change are in digitisation of operations, 03
modularisation of solutions and acquisition of new capabilities:
•• E2E Digital Operations: In terms of operations, processes need reinventing for 04
the digital age to substantially improve both customer and employee experience
while reducing operating costs, but the right technology and data foundations
need to be in place.
•• Integrated ICT Portfolio: In terms of the value proposition, the telco needs an
integrated portfolio which is built on and allows solutions to be designed using
industrialised building blocks. This will allow telcos to capture revenue from new Digitising operations,
services, while reducing costs associated with personalisation and customisation.
•• Inorganic value creation: Finally, in terms of the corporate portfolio, B2B modularising solutions and
is evolving rapidly. Value creation requires leveraging joint ventures to access acquiring new capabilities
capabilities in a capital efficient way, acquiring specialist capabilities in a targeted
approach and reviewing the portfolio to see if there are assets that could be are key to winning in B2B
increased in value through partial or complete sales.
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03 How to win
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• Greater Human-Digital Channel Integration
Customer experience
E2E Digitization • Personalization and Authentication
• Integration and automation in the E2E ecosystem
Cost 03
04
• Integrated portfolio
Integrated Revenue from new services
• Industrialized service offering
ICT Portfolios Cost
• Solution design with standard building blocks
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03 How to win
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Telcos have have often struggled
Integration of human For large enterprise customers, the role of the account executive
to make the economic case for and digital channels or service manager remains important, but their interactions
digital investment in B2B thanks must be informed not only by digital channel interactions but 03
to the smaller volumes and by product usage, and made richer through digital tools.
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03 How to win
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02
And yet relatively few B2B organisations are Leading digital players in B2B have got the With these foundations in place, businesses can
exhibiting these digital capabilities: why not? following basics in place: then start joining up their digital investments:
In the past, piece-meal and tactical investment integrating marketing automation software
1. A 360º view of the customer: a clean and 03
in digital by B2B organisations and lack of centralised customer data (integrating first, with CRM and social listening platforms; driving
investment in the technology foundations second and third party data sets), supported collaborative sales and service models to
has led to a disjointed customer experience by a real-time analytics capability improve cross-sell/upsell, and bringing usage
and high operating costs. Often foundational data and insight into product development and
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elements are neglected as benefits are spread 2. Identity management: the ability to simply sales planning cycles.
across many business areas and investment authenticate users, including single sign-on
must be pooled across business units, but and access and permissions management
without them digital initiatives quickly hit 3. Common solution catalogue.
diminishing returns.
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03 How to win
02
Significantly differing process standards, Siloed thinking and portfolios •• Failure of telco players to fully integrate the IT organisations
different skill and organisational requirements
as well as different BSS/OSS requirements •• Separate ‘siloed’ portfolio and subsequently sales approaches
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has led to unsynchronised client approaches •• Lack of new and integrated ICT propositions – instead of just
– with various sales teams from the same adding IT services and products to the existing portfolio
company approaching the client and resulting
in missed cross- and up-selling opportunities Cultural and operational •• Customer-centric eTOM (Telcos) vs. service- and operations-
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through combined and integrated ICT offers. differences centric ITIL (IT Player) process approaches and terminologies
•• Differing delivery as well as operating models as well as the
Telcos need to streamline their operating corresponding roles and skills
models to enable integrated sales and delivery
of products and IT services and solutions. Separate IT stacks •• Different and separate IT-stacks for Telco and IT products and
services due to different process and business requirements
Nevertheless integrated ICT portfolios require as well as product complexities
a different sales, delivery and service approach.
To operationalise ICT portfolios some changes
in the operating model are required.
Processes
Integration of eTOM and ITIL processes into an integrated and scalable ICT process landscape.
A full integration of
Organisation and Skills
telco and IT operating Ensure availability of skilled organisation to enable differentiated ICT sales and delivery approach.
models is needed for IT and Infrastructure
profitable growth Integration and rationalisation of IT stacks to support the integrated operating model. 13
03 How to win
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An important first step in the
Current B2B Offerings Portfolio Elements
development of new integrated ICT
Internal
operating models is the definition Internal and external 70% standardised modules
20% add. 10% 03
modules tailored
of an end-to-end ICT portfolio.
optimised IT stacks.
Define modularised key offerings, options and cross-sales
The disassembly of the telco and IT portfolio
components to standardisable product Secure
Future B2B Offerings External UCC (aaS) All IP BYOMD1 …
modules as illustrated below enables integrated Connect
ICT portfolios.
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Organic development of the
Inorganic Model Advantages Disadvantages
capabilities required to deliver
ICT solutions will be challenging 03
Joint-Venture (JV) •• Shared market knowledge •• Loss of control and
for most of the telco operators. and know-how equity ownership
There simply isn’t time. The long •• Shared risks/costs 04
term nature of B2B contracts
means the opportunity cost of Acquisition •• Rapid entry into new •• Higher up-front investments
being slow to build is high. markets or capabilities required
•• Leverage existing customer •• Execution risk due to
While inorganic growth will be a key base/operations complexity of integration
accelerator to scale the new portfolio,
there are many execution options including
acquisitions, JVs or alliances/partnerships. Strategic Alliance •• Lowest execution risk and •• Difficult to hold partner
lowest investment capital accountable for results/KPIs
01
02
Identify gaps and complementary Determine Best-Fit Identify right partner and define Develop Launch Plan and
areas in current portfolio Partnering Construct Deal Structure and terms Strong Governance and PMO
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products and services The key question revolves around how to In the B2B space telcos should consider the
make meaningful partnerships last. Taking a right way to tackle any new opportunity from
structured approach to formulate the right the ecosystem and partnership’s perspective.
partnership constructs can help. Should they do it alone? Are there opportunities
to go quicker or more effectively through
JV, acquisitions or strategic alliances? These
questions need to be asked at the beginning
of each opportunity in ICT space.
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04 About us
alignment to execute 02
03
Where to Play?
How to win?
Where to Play?
Where to Play?
Monitor Deloitte’s strategic growth Goals and
Focus of the
current paper
cascade framework provides an iterative aspirations
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approach to assess and align critical Where How to win?
How to win? How to win? How to
choices around transformative decisions. Source ofSource
Value of Value to play? Implement?
How
to win How to How to
Implement? Implement?
Monitor Deloitte is a long How to
implement
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04 About us
02
03
Globally Integrated •• We are a global market leader in consulting for telco
B2B team and expertise companies, especially in the B2B space.
•• Our global network provides us with direct access to 04
knowhow and client experts in all markets worldwide.
Strong Track Record, •• We bring a lean team with deep industry knowledge that is
and experiences with able to focus on the issues from the start – No “boiling the ocean”.
leading B2B Operators •• Our global SMEs will bring in best practices to ensure optimal
project results.
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an ICT product and
services roadmap
04 About us
01
an
el for
ator
Selected B2B/ICT projects overview
Developed Go-to-Market strategy
and potential partners screening for
European Telco’s roaming services unit
Diversification strategy in the
data center market and product
concept development
Pricing strategy for
B2B market for a
European Operator
Where to play
How to win 02
03
Digital strategy for Digital Channel for Indirect B2B growth strategy in connectivity and Strategic alliances to
B2B growth for a Partners for a leading US carrier ICT markets for a leading Asian Carrier accelerated digital ecosystems
leading US carrier for a leading B2B provider
for a leading Asian Carrier 04
T-SDN virtualization plan Developed Go-to-Market strategy Diversification strategy in the Pricing strategy for
and monetization model for and potential partners screening for data center market and product B2B market for a Where to play
a Latin American operator European Telco’s roaming services unit concept development European Operator How to win 19
04 About us
02
03
Jaime Rodriguez-Ramos Mirko René Gramatke Miguel Eiras Antunes Ganesha Rasiah
Partner Director Partner Partner
Monitor Deloitte Spain Monitor Deloitte Germany Monitor Deloitte Portugal Monitor Deloitte US
jrodriguezramos@deloitte.es mgramatke@deloitte.de meantunes@deloitte.pt grasiah@deloitte.com
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