To gain insight into where investment could provide the greatest returns for CSPs, CSG recently conducted research into the millennial market to see what the next generation expects from their CSPs, and specifically their mobile service, in the future. We found that they had three main requests – make it personal, make it easy and make it smart.Communications Service Providers (CSPs) face continual change as they embrace the latest technologies to serve their customers – from fixed line to mobile, to messaging and data services; and now to value-added services that exploit the data rich capabilities of 4G and future 5G networks, like streaming video content, geo-location and an app for everything.
Firstly, personalisation was a very strong theme. Millennials expect a highly personalised service, with offerings tailored to the way they individually use their mobile devices every day. According to survey findings, a significant majority (59 percent) of millennials are likely to spend more for a service customised to their usage patterns across voice, data, entertainment and other personalised services. They are even willing to give access to their personal usage data in exchange for a service tailored specifically to their needs. In the UK, this was especially prevalent, with nearly 80 percent of millennials (and 71% across all polled) noting they would be likely to allow their mobile service provider to make entertainment recommendations based on content they have watched or listened to before. Millennials also see their mobile service as something that should make their lives easier. According to our survey, 41 percent of millennials want their mobile service to become more useful for the small things in everyday life: to act as a pass for the commuter train, unlock doors and more. Looking to the future, millennials see their mobile service as not only completely integrated into their daily tasks, but powered by a smart, more powerful artificial intelligence that will anticipate needs and take action on their behalf. In fact, 49 percent of millennials want their mobile phone service to become a more intuitive personal assistant, completing tasks such as automatically checking-in a consumer for a flight 24-hours before flight time or using their location to find, order and pay for services nearby. Millennials also see their mobile device as a replacement for a wallet. After all, why carry both? Their devices can act as a credit card, a movie ticket or a discount coupon that is automatically applied to their payment. Millennial consumers want to access these services on-the-go and they want more of these capabilities.
The impact and opportunity for CSPs
It has long been said that CSPs will risk becoming a connectivity service only – a utility – if they don’t transform their people, processes and technologies to serve the rising generation of consumers. For premium revenue, getting ready to service millennials is key. And not only for millennials, but the generation beyond – we will see lifestyles enabled by the Internet of Things become the norm with the next generation – in the same way it was mobile phones for Gen X and smartphones for millennials.
With their connectivity services, CSPs are always going to be a part of the transaction and are well positioned to take a central role in enabling a B2B2x digital ecosystem. To do this, their businesses, systems and processes need to be agile and open to continually adapt and provide the expected customer experience for the next generation, and for the businesses that serve them.
What will enable B2B2x in the digital economy?
To power the digital economy, there are two broad components to consider. The first is the processes required to manage the vast volumes of digital transactions. These include pulling all the data together, correlating and processing it and using it to drive every digital transaction from authorisation, fulfilment of a service, analysing and predicting behaviour, to charging and settlement across one or many parties.
The second component is making it easier for customers to find and consume products and services through aggregation into a centralised catalogue. The service aggregator builds its own offerings, aggregates other businesses services, and provides end-to-end managed solutions to customers – creating a B2B2x environment. There are many players looking to position themselves as service aggregators, however CSPs are in a prime position to take on the role and tap into premium revenue streams with their connectivity and long established customer management processes, if they can adapt.
As a rule, legacy infrastructure is not geared for B2B2x models. What’s needed is the flexibility and agility to manage potentially hundreds of thousands of digital products and services, and infinite combinations of those services. Offerings need to be launched fast, and, if necessary, fail fast and be replaced – which is a very different philosophy from traditional telephony offerings. This capability usually requires new, adjunct systems to manage customer consumption across devices and collect insights about how customers use services.
The connected consumer expects you to anticipate what they want, making predictive big data analytics and customer insight models a critical toolset that service providers need to better understand. Analytics will drive decisions such as which up-sell, cross-sell, next best offer and even promotional items will generate a continual conversation with the customer, creating trust and loyalty with the brand.
Maximising ROI with B2B2x delivery models
As CSPs deploy B2B2x infrastructure models, their focus changes from internal operations to building a sustainable ecosystem, monetising their digital catalogue and delighting their customers. They need to find ways to free up skilled resources from the back-end systems to support these market initiatives, but at the same time internal operations need to be extremely efficient. More than ever they need to be automated, accurate and lightning fast.
This is where a fresh approach to managed services can add significant value. Managed service providers used to be about cost-cutting, but today they are about making traditional business environments more lean and agile, while driving innovation for new digital business. Creating a lean operating infrastructure that is fit for the digital economy often results in significant cost savings for CSPs, which frees up investments to feed back into innovation on the digital side.
The role of cloud and SaaS in building competitive advantage
There is a definite upswing in customers looking to leverage a cloud-based, Software-as-a-Service (SaaS) solution that can overlay existing infrastructure to help a CSP get to market quickly with new services and monetise new revenue streams. From CSG’s perspective, it is important to understand the drivers of this requirement – and, at the core, “it is the desire to innovate, launch new digital services quickly and monetise those services”. Companies want to get into the digital economy – but because it is a nascent business model, they are aware of the risks of investing too much, too quickly in a platform that might not meet their future needs. They also know the upfront and hidden costs of the “rip and replace” approach to existing infrastructure, but they still need to act. Because of this, we need to be ready with solutions that empower our customers to be nimble and innovative without having to re-build an entire operational architecture.
A further advantage of SaaS is the automatic upgrades of functionality, meaning that the latest toolset for innovation is always available, rather than going through resource consuming upgrades of traditional on-premise software.
Creating wealth in the digital economy
CSPs are under relentless pressure to compete in the digital economy, facing competition from digital powerhouses like Amazon, Google and Apple, which have set the bar for customer experience very high. To provide CSPs with a true competitive advantage, CSG’s strategic focus is to enable the B2B2x ecosystem that allows the companies we work with to connect consumers to each other and to the services that they care about. This means we are investing in solutions, such as the Ascendon platform, to support digital economy capabilities that drive efficiency and monetisation in the real-time world. We believe that the right platform, coupled with employing skilled resources where they can add most value, processes that are agile and adaptive, and technology that is robust and open, is at the core of creating wealth in the digital economy.