Managing Director & Partner
For B2B telecom operators, customer satisfaction remains a work in progress. Unfortunately, the work is outpacing the progress. Telcos consistently score below other sectors on this key metric, earning them a standing—and a reputation—they’ve struggled to shake. Indeed, many providers have failed to raise a bar that’s so low, it could challenge the most dexterous limbo contestant.
Meanwhile, pressure mounts. Lean fiber players, system integrators, and hyperscalers—unencumbered by legacy processes or systems—can offer similar products but radically different experiences. And it’s not just new competitors tugging at the sleeves. Telecommunications companies are also under the gun to deliver significant cost savings.
These twin mandates—raise satisfaction, lower costs—haven’t played well together. In many cases, process redesigns trigger savings only to trigger customer frustration as well.
But what if telcos could avoid the tradeoff? And while they’re at it, improve the employee engagement that can flag when helping customers takes too long, involves too many hoops, and brings too little joy?
Making this work is possible and so, too, are tangible—and sizable—rewards. Telcos can reduce the costs of a process, such as provisioning, by 80% or more while moving the needle on satisfaction. (See Exhibit 1.) And they can start seeing results soon: in our experience, within three to six months.
But getting it right requires a new approach to transformation, where telcos think like both a customer and a CFO. It also means combining methods that, traditionally, telcos haven’t used in unison—or, quite likely, at all.
Poor experiences, high costs, delays, and errors: they all trace back, in large measure, to inefficient processes. The solution would seem straightforward. Transform a process so that you reduce, or even eliminate, the waste.
The problem is, there are a lot of places to cut process waste—and a lot of ways to cut it. Where do you start? How do you sequence your efforts? What works well from both an internal perspective (lowering costs) and an external perspective (making customers happy)?
Telcos have struggled with these questions. The proof is in the track record. We’ve seen a wide variety of transformation projects, yet few have been truly transformative, bringing dramatic improvements in service and big reductions in costs. (See “The Pitfalls of B2B Transformations.”)
In our experience, that kind of step change requires an approach built on some essential cornerstones:
What does a transformation program based on these ideas look like? In practice, it has three key dimensions: generating the required insight, setting the delivery process up for success, and enabling lasting change.
Journey transformations need the right perspective—or, more accurately, the right perspectives. When a telco bases change solely on what benefits the telco, the result is often a hit with the accountants but a miss with customers. Yet a transformation based solely on customer requirements can also disappoint. It may not be technically feasible to meet some expectations. Or the cost of meeting them may outweigh any uptick in satisfaction.
The key is to strike the right balance: optimizing journeys from both an internal (inside-out) and an external (outside-in) perspective. To do that, telcos need to apply three methodologies that don’t have a lot of history working in concert:
SETTING THE DELIVERY PROCESS UP FOR SUCCESS
Telcos tend to split transformation projects into two phases: design and delivery (with the implicit assumption that the delivery phase will be easy). But often, it’s only during delivery that issues become apparent. By then, the design team has likely moved on to its next project—complicating the fix.
Many transformations are also hindered by another common practice: focusing on specific functions or features without giving much—if any—consideration to how changes will impact the overall customer journey.
A cross-functional end-to-end approach, leveraging agile ways of working, lowers both these barriers to success. This means structuring teams around the full change life cycle (concept, development, iterating, and scaling) as well as the full customer journey (sales, delivery, and service). Such teams will have all the necessary talent—and decision rights—to implement change so that they can iterate, scale, and create value quickly.
How would this look in action? To use the language of agile, different tribes cover different journeys (for example, lead-to-cash or trouble-to-resolve). Within each tribe, each squad is responsible for a specific capability (such as an efficient quoting process). This structure makes it easier to optimize the full process journey, instead of discrete steps. (See Exhibit 2.) It also enables telcos to create well-defined outcomes and clear accountabilities.
Because a squad includes all the expertise needed to design, develop, and deliver a capability, there’s a risk that the team can exceed the best-practice size (typically 12 to 15 FTEs). But given the importance of having those skills onboard, telcos should limit squad size only when performance degradation is apparent.
Other best practices are less negotiable:
ENABLING LASTING CHANGE
The best transformations create value quickly and build on that momentum, steadily deploying more changes and creating more value. Legacy technology hinders this effort. Yet building an all-new IT stack—a silver bullet, to be sure—is typically a multiyear endeavor. So how can telcos unlock value in the near term, even as they lay the groundwork for large-scale IT change?
The answer is to embrace three enablers:
Generative AI-Enabled Automation and Copiloting. The advent of generative AI has unlocked a new level of transformative opportunities. While customer care and interaction are prime focal points for the technology, the list is growing and includes areas that, traditionally, have been hard to optimize. For example, telcos could use generative AI to produce network designs automatically. Or to create a copilot to analyze complex network data. Or to extract data from unstructured customer input (so that telcos can feed the data to other systems).
Generative AI also enhances robotic process automation (RPA). While RPA has plenty of potential—performing high-volume repetitive tasks that humans would otherwise perform—it hasn’t gotten a lot of playing time at many telcos. The problem: RPA works best for high-volume processes. But within B2B telcos, processes are typically so fragmented that the business case for RPA is weak. By simplifying and modularizing processes before migrating, and using generative AI to create the structured data that RPA needs, telcos can change the calculus and make RPA a much more attractive investment.
Under increasing pressure to improve experiences while cutting costs, telcos can no longer afford a tradeoff. By embracing a new approach to transformation—one that looks from the outside as well as the inside—telcos can create value where it matters most. And they can spark growth when it matters most.
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