Communication service providers (CSPs) face existential questions as they evolve their business models to become digital service providers, where delivering connectivity is only part of an extended and diverse value chain. Facing growing competition from industry rivals and non-telco players vying for the same wallet share, operators are looking to introduce new digital products into their consumer offering, ranging from streaming video subscriptions to gaming services, home security and healthcare as well as other 5G-enabled services.
Transforming their business model to become subscriber-centric technology companies - or ‘techcos’ - involves onboarding a range of new partners that provide these services, creating more value for existing subscribers and making them stickier. Challenge accepted. However, many operators are currently restricted by the limitations of legacy billing and customer management systems which can inhibit growth and new service expansion while causing headaches for technology leaders who need to deliver on key business objectives. It’s like trying to win a boxing match with one arm tied behind your back.
The truth is that delivering this level of multi-service, multi-partner offering requires highly flexible BSS, monetization, and customer relationship technologies that can manage deep complexities while providing a seamless user experience for subscribers who expect digital-first, Netflix-like experiences. Chief Information Officers (CIOs) are looking for ways to cost-effectively uplevel their technology stacks to support the rapid evolution of new operator business models. But innovation can be risky, complex and expensive - especially when you’re talking about enhancing deeply entrenched, outdated systems that have been in place for decades.
So, how can technology leaders think and act differently to accelerate BSS transformation and unlock techco revenues?
Legacy systems restrict business evolution
Boardroom and investor pressures to increase revenue, subscriber acquisition, and retention are mounting as competition intensifies in a digital-native arena where consumers have more choice and control than ever before. And frankly, many operators are sailing against the wind if they continue to rely on profoundly limited systems of the past. Legacy BSS systems are inflexible, slow and expensive to maintain, stifling the ability to scale across markets, roll out new products, and respond quickly to changing market dynamics. Rigid, monolithic systems never designed in the first place to support rapid experimentation won’t cut it anymore. To survive, operators need to be able to quickly and cost-effectively implement new features, business rules, service bundles and partner products.
Outdated systems limit the ability to implement modern digital sales strategies, affecting both revenue generation and customer satisfaction. In a world where consumers expect user-centric, self-driven digital experiences, utilizing outmoded inflexible tools can result in clunky, non-digital customer experiences that rely on legacy sales channels and lead to reduced brand loyalty. Operators looking to introduce new services and products amid their offerings need to demonstrate value to consumers as quickly as possible - they need to create a compelling digital proposition that shows customers their telco provider is the ultimate convenience option.
The clock is ticking. Operators need to overcome long implementation cycles for new technologies that delay go-to-market and leave the door open for competitors to overtake. Business leaders want to see immediate ROI on new platforms and digital transformation initiatives - 70% of which fail, according to McKinsey - but current tech stacks aren’t agile enough to deliver the required goals, cost-effectively and on deadline.
Telco marketplaces need modernization
New telco–to-techco business models driven by hybrid monetization streams require intricate and highly flexible billing and customer management technologies to deliver on their promise for operators and consumers alike. 5G-enabled network slicing, B2B2X offerings, and network-as-a-service (NaaS) models rely on robust partner ecosystems with intelligent, automated billing systems. Operators need to find ways to simplify and streamline multi-partner billing for service bundles that include complex pricing models such as usage-driven and tier-based pricing. Today, industry pioneers are coming together to develop breakthrough billing methodologies to solve these complex challenges.
In search of a more holistic approach to enabling new techco revenues without a significant system overhaul, technology leaders are increasingly opting for a complementary monetization layer - or a digital enablement layer - which sits deftly above existing systems with a more modern interface and digital-native capabilities. Fuel that BSS transformation without the risky, costly and time-intensive processes typically associated with making changes to in-place tech stacks.
An intelligent monetization layer provides seamless and low-risk integration with an existing BSS, enabling operators to keep those core systems in place while enhancing customer experiences. The benefits of an agile, complementary BSS layer include a cloud-based approach that supports cost-efficient scalability based on evolving workloads. Additionally, operators can enact rapid experimentation and iterative implementation to test and double down on new functionalities for customers without the associated risks of major system upgrades. Embracing a cloud-native, consumer-centric BSS layer equips these operators with the digital-first onboarding and self-service features a new generation of subscribers expect, while lowering the overall operational costs and resourcing pressures that come with maintaining and troubleshooting decades-old technology systems.
CIOs can champion BSS innovation without revenue disruption
The telecommunications industry stands teetering at a key inflexion point. Rapid market change has led many operators to grow out of legacy systems which are no longer able to support their current evolution phase in the move toward new telco-techco strategies. But challenge always comes with opportunity. Telco CIOs and IT leaders can emerge as business champions with a different approach to BSS transformation, harnessing overlaying customer management and billing technology to deliver fast results with low risk, no impact on core revenue or customer experience - and zero CapEx investment.
I speak with telecom technology leaders every day about the urgent need for BSS modernization - I know it matters. Decision-makers who take a fresh approach to digital transformation with a new monetization layer are not just delivering technology enhancement; they’re propelling business growth as telcos embrace new service provider identities in an increasingly digital, subscriber-centric world.