0
IBM Institute for Business Value

Telco’s strategic positioning
in the new world:
The revolution will be digital

Xi’an, 1...
IBM Institute for Business Value

What will be the Telco’s role in the new world?

The ‘mega’ market and technological tre...
IBM Institute for Business Value

Trends evident today are driving re-evaluation of business strategy
 Rise in power of t...
IBM Institute for Business Value

In addition to the trends, however, a number of high-impact variables
exist with outcome...
IBM Institute for Business Value

Mapping the extremes of the possible outcomes related to the
uncertainties reveals four ...
IBM Institute for Business Value

Regardless the scenario that will evolve, there is a set of common
critical success attr...
IBM Institute for Business Value

The 2020 Consumer: Connected life

Social
Social media, social business – all
the time, ...
IBM Institute for Business Value

The 2020 Business: Virtualisation becomes reality

Social business

Invest
Unprepared
Un...
IBM Institute for Business Value

The emerging ‘two sided’ business model becomes the majority
service delivery vehicle; t...
IBM Institute for Business Value

Telco’s must align growth initiatives to new strategic beliefs, incorporating
emerging t...
IBM Institute for Business Value

The telco must first perfect its strategic operational plays: “be brilliant
at the core”...
IBM Institute for Business Value

Telco’s must create a smarter ecosystem, and put themselves in the
centre of the ecosyst...
IBM Institute for Business Value

The integrated ICT engine of scale underpins this ecosystem
2b

Business

Consumers

Del...
IBM Institute for Business Value

Thank you

www.ibm.com/iibv

14

Rob van den Dam
Global Telecom Industry Leader
IBM Inst...
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Telcos Strategic Positioning in the new world: The revolution will be Digital (Xi'an, China)

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Presentation for Huawei Innovation & Transformation summit

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Transcript of "Telcos Strategic Positioning in the new world: The revolution will be Digital (Xi'an, China)"

  1. 1. IBM Institute for Business Value Telco’s strategic positioning in the new world: The revolution will be digital Xi’an, 17/18 Sept 2013 Innovation & Transformation Summit Rob van den Dam Global Telecommunications Industry Leader IBM Institute for Business Value © 2013 IBM Corporation
  2. 2. IBM Institute for Business Value What will be the Telco’s role in the new world? The ‘mega’ market and technological trends are creating a very new world for consumers, businesses and markets as a whole. In this new world, Telco’s strategic positioning and response relies on major growth plays Prediction is very difficult, especially if it's about the future. ― Niels Bohr 2 Your theory is crazy, but it's not crazy enough to be true. ― Niels Bohr © 2013 IBM Corporation
  3. 3. IBM Institute for Business Value Trends evident today are driving re-evaluation of business strategy  Rise in power of the smarter consumer  Social media explosion driving Market new behaviours Regulatory Economic   Slow long term growth outlook, shifting wealth and urbanisation Change in Global Hierarchy Demographic shifts Structural separation continuing Increasing roles of regulators especially in privacy     Internet of Things  Mobile first 3  OTTs and new Mobile saturation extending to M2M  Hyperdigitisation and Big data The 3rd platform – Cloud Technology Going global for growth Accelerated pressure on revenue/costs ICT Industry  competitors disintermediating Network technology investment and change as a design point © 2013 IBM Corporation
  4. 4. IBM Institute for Business Value In addition to the trends, however, a number of high-impact variables exist with outcomes that are, as yet, uncertain Telecom SCENARIOS Addressable Market/ Growth Areas Industry / Integration Model Demand for Voice communications Silo vs. unified communications Open versus closed devices Premium /Enriched Connectivity Expanding Network sharing vs. Outsourcing OTT vs. Network optimized content Machine-tomachine (M2M) communications Vertical vs. Horizontal Integration New Verticals Service Pricing Model User vs. 3rd Party / ad funded Ultra-fast Broadband Availability Regulatory Uncertainty SCENARIO 3 SCENARIO 4 SCENARIO 1 SCENARIO 2 Addressable market Declining/ Stagnant Concentrated/ Vertical 13 high-impact uncertainties that can have 2, 3 or 4 alternative outcomes 4 Fragmented/ Horizontal Dominant Industry / integration model © 2013 IBM Corporation
  5. 5. IBM Institute for Business Value Mapping the extremes of the possible outcomes related to the uncertainties reveals four contrasting scenarios Telecom SCENARIOS Expanding CLASH OF GIANTS Addressable market •• Disaggregation of Carrier collaboration • Carrier Assets Co-op of and alliances infrastructure •• Involvement Vertical End-to-end GovernGENERATIVE providers ment, Municipalities Market solutions BAZAR Open & Affordable •• Fragmentation • Mega Carriers connectivity to •• Driven by Brands in Emerging Carriers any person/object Mature markets • Declining / Stagnant SURVIVAL CONSOLIDATION • • • Concentrated / Vertical 5 Reduce Spending Consumers MARKET ARPU Erosion SHAKEOUT Investor Loss of Confidence Cash Crisis Fragmented / Horizontal Dominant Industry / integration model © 2013 IBM Corporation
  6. 6. IBM Institute for Business Value Regardless the scenario that will evolve, there is a set of common critical success attributes Telecom SCENARIOS Expanding CLASH OF GIANTS Common Critical Success Attributes Effective Digital Transformation GENERATIVE BAZAR Cost-effective ultra-fast broadband strategy Addressable market Network /customer insights to optimize experience & cost Agile, flexible, reconfigurable processes & infrastructure Cost containment Declining / Stagnant Culture of innovation and collaboration SURVIVAL CONSOLIDATION Concentrated / Vertical 6 MARKET SHAKEOUT Fragmented / Horizontal © 2013 IBM Corporation
  7. 7. IBM Institute for Business Value The 2020 Consumer: Connected life Social Social media, social business – all the time, respond, solicit, collaborate Contextual Perfect experience New contextual services to improve lives All the time – know, connect, serve Everything Connected Internet of Things, Multiple devices controlling multiple devices (TV, heating, car kids, etc.) The New World 7 Extensive use of avatars, concierge services, virtual interfaces Behavioral profiling Personalized Create own service portfolio according to their own needs, sourced from multiple providers Alternative me Continued virtualization Functions, services, enterprises Continuously providing insights and recommendation to the consumer to improve their lives, experiences and well being © 2013 IBM Corporation
  8. 8. IBM Institute for Business Value The 2020 Business: Virtualisation becomes reality Social business Invest Unprepared Unsure 62% 74% 67% 62% value? Source: IBM IBV Social Business Survey 2012 Use business functions as a service (ICT becomes virtual). 8 Two sided bus model…buys from partners who source from many Multiple devices controlling multiple devices, fleets, assets, workforce etc Mobile first is the design point Continued virtualisation of the enterprise, Global sourcing of services to further reduce costs Systems of engagement start to become the norm over systems Social business – all of the of record © 2013 IBM Corporation time
  9. 9. IBM Institute for Business Value The emerging ‘two sided’ business model becomes the majority service delivery vehicle; this is a key opportunity for CSPs Consumers In 2020 up to 60% of today’s ICT market is addressable through this delivery model Business Example Players in the services economy today Service providers and partners CSP solutions $1.5B revenue of10K+ Affiliates ISVs Personal comms Expecting $10B transactions on mobile in 2012 Banking Security 40% total units sold by outside sellers Policy 40% new business comes from non-CRM offerings Consultants/ SIs Healthcare Managed customer interface, services, platforms and networks Analytics Media M2M Developers Social business Etc… Etc… API only company reaches 150,000 developers and 1.5M calls a day 4.5M API invocations per month Promotions and loyalty programs 9 © 2013 IBM Corporation
  10. 10. IBM Institute for Business Value Telco’s must align growth initiatives to new strategic beliefs, incorporating emerging trends, new technology & the two sided business model Growth initiatives 2 Evolving beliefs • Imperative to create and acquire IP • Customer experience excellence Move the source of value • Lead in the new era services ecosystem • • Accelerate shift to higher value • Strategic beliefs Deliver integration and innovation to clients • • Dramatic simplification Take ‘stop’ decisions early Strategic Growth Play -Create Smarter ecosystem -Build Integrated ICT engine of scale 3 Expand internationally Critical success attributes New technology 1 Strategic Operational Play Be brilliant at the core Future uncertainties Current trends 10 © 2013 IBM Corporation
  11. 11. IBM Institute for Business Value The telco must first perfect its strategic operational plays: “be brilliant at the core” 1 Strategic Operational Plays Examples in other industries – all (except cablescos) with NPS > 60% Customer intimacy Emotional connection Virtual channels Dramatic simplification Low cost operating model Optimised heterogeneous network 11 Intense personalization © 2013 IBM Corporation
  12. 12. IBM Institute for Business Value Telco’s must create a smarter ecosystem, and put themselves in the centre of the ecosystem 2a Consumers Sales Service providers and partners ISVs Banking Sales partners Solution partners Component partners Consultants /SIs Healthcare Media Developers Etc… Business Delivery Smarter ecosystem core Managed customer interface, service creation, Open APIs. utilities Managed infrastructur e platforms, Core network Sales CSP solutions Personal comms Security Policy Analytics CSP to create a ‘two sided’ business and operating model and partner ecosystem to power business, government and consumer services M2M Social business Etc… Smarter Ecosystem core IP creation and exploitation 12 Clean business model Partners in control of own destiny CSP excels at horizontal Secure, open, standardised Specialist skill sets © 2013 IBM Corporation
  13. 13. IBM Institute for Business Value The integrated ICT engine of scale underpins this ecosystem 2b Business Consumers Delivery Service providers and partners ISVs Banking Consultants /SIs Smarter ecosystem core Personal comms Managed customer interface, service creation, Open APIs. utilities Security Policy Healthcare Media Developers Etc… CSP solutions Analytics Managed infrastructure platforms, Core network/ virtualisation CSP to build underlying capabilities of scale to power business, government and consumer ICT needs M2M Social business Etc… ICT engine core Large scale, Low cost 13 Integrated IP comms services Partners ‘inside’ Simplified technology platforms Secure, open, standardised Specialist skill sets © 2013 IBM Corporation
  14. 14. IBM Institute for Business Value Thank you www.ibm.com/iibv 14 Rob van den Dam Global Telecom Industry Leader IBM Institute for Business Value rob_vandendam@nl.ibm.com © 2013 IBM Corporation
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