To stay ahead of the curve, every organization today is pulling out all the stops to “digitally disrupt” the marketplace. In this process, however, the finer nuances are often lost, leaving these players flailing. In a conversation with Mark Newman, Chief Analyst, TM Forum, Manoranjan ‘Mao’ Mohapatra, Chief Executive Officer, Comviva shares his views on whether companies are merely jumping onto the digital disruption bandwagon or are they prepared to leverage data to its fullest potential? Excerpts…
- On a scale of 1 to 10 where is the telecoms industry today in its digital transformation?
My personal view is that the industry is at a four or five. This isn’t because the industry isn’t doing it correctly. It’s because most people today still think that the need for transformation is one- time. If one goes back 20 years, one knew that any change in IT systems would have a life of ten years. Now, a lot of people are being myopic and thinking that the transformation would serve them for three to four years. But, in truth, one needs to accept that one has to live with transformation on a daily basis.To cite an example pertaining to software and agility, when I started in my career, major software builds were being carried out per year. Five years ago, a software build was being carried out per quarter. Now, a major software build is being carried out twice a year through agile. In fact, I read that Amazon is doing a software build every 11 minutes!
- How are most Chief Information Officers (CIOs) approaching transformation?
There is a whole spectrum of views and approaches. One section of chief information officers (CIOs) believes that one either transforms lock, stock, and barrel or not at all. Others are happy doing bits and pieces. I would say that most CIOs are taking a middle path. The reality is that there are a number of constraints for the CIOs. They have hundreds of services running that are generating revenues and these are paying their employees’ salaries.Most people are disrupting for the future, not to meet today’s challenges. To do this, one needs to adopt a leap-frogging approach. The need to leverage data is growing by the day. This is increasing demand for computing power and bandwidth for communication. If one has not prepared oneself for this growth, one is building up potential challenges for the future, when this explosion happens.
- Is the relationship between CSPs and their vendors changing as a result of digital transformation?
I’m not sure that the various aspects of this relationship are really changing yet. Customers are still trying to manage the transformation, which means that it is not really a partnership. They are still taking a “laundry list”-centric approach to how we work with them, rather than building a holistic view centred on a collaborative effort.
- What impact does it have whether your customers use your cloud or their own private cloud?
Today, most CSPs are using their own private cloud to host services such as those provided by Comviva. They ask us to bring our application to them, which is fine, except that they can’t then leverage our central expertise in data modelling and data analysis. We have a data science practice within Comviva with 15-20 experts based in Bangalore. Maybe we send one or two individuals to a customer location, but they are not availing our full competency set. Furthermore, it can be expensive for them because they are paying for dedicated resources.We have come across certain CSPs who are open, for example, to the idea of our caching their data. This is, however, rare, as most ask us to deliver our capabilities within their firewall.
- Is there an element of fear from some communication service providers (CSPs) about transformation?
certainly think there is sense of insecurity in many communication service providers (CSPs). They fear they may be opening their internal data too much. In many cases, this is because of national laws, with regulators concerned about data being stored outside their country.
- You’ve talked a lot about operators leveraging their data. Do you believe that they can make money from their data?
Yes, we do believe in data monetization. Consider the example of how a telecom operator can help a bank sign up customers. An operator’s mobile customers may only be generating one cent per kilobyte. However, if the bank is able to leverage customer data, it creates value that goes well beyond connectivity. If a bank’s subscriber acquisition cost is, let’s say, $1 per customer, then they may be prepared to give $0.10 or $0.20 to the operator.One of the reasons why this data-as-a-service business has been slow to take off is because the business-to-business (B2B) function in many operators is very underdeveloped, often generating less than 10 per cent of the total revenue. Furthermore, there may be tension between the consumer and the enterprise lines of business, as they feel that they are competing for business. The relationship aspects of transformation aren’t fully developed yet. Customers are still trying to manage, which indicates the absence of the “true essence” of a partnership.