May 26, 2016

Digital Service Providers: An Inevitable Evolution, Part 2 of 2

Digital transformation is a requirement for today’s service providers, but carrying out this transition will not happen overnight.

[In case you missed it, be sure to check out Part 1 of this series.]

DSPs will have a number of unique characteristics that separate them from today’s service providers. But there is a common thread. In general, there are three main attributes that highlight a successful DSP. Here’s a three-point digital evolution framework that details just how thorough this transformation will be:

1. Customer Experience

Customer experience must be personalized, proactive and omnichannel. It must provide contextual marketing and upselling, as well as zero-touch service fulfillment.

For service providers to truly excel at providing a superior customer experience, they need to align business and IT processes and ensure that data and context from the initial contact with customers carries over to subsequent channels. A typical customer today may research a product or service on social media and read reviews on the web but make the ultimate purchase in the store. If service providers cannot support a consistent and personalized experience across all of those channels, that customer will be out of their reach.

2. Operational Processes

The operational processes driving service providers’ businesses forward must be analytics-driven, agile, flexible, streamlined and cost-efficient. IT systems need to support the ability to provide a consistent experience regardless of customer engagement methodologies.

It should be no surprise, too, that a DSP’s workforce needs to mirror the customers and businesses it’s trying to serve. Workers need to be digitally connected with IT and cloud-based systems that provide myriad applications with a common experience across different devices. Like the web-scale internet companies that consumers value, successful DSPs practice data-driven decision-making, using analytics to do everything from tracking the effectiveness of marketing programs to deciding whether to buy products, build them or get them from partners.

3. Business Models

Next-generation business models must include an ecosystem of partners that can deliver what can’t be built internally, support creative, digital service bundles and incubate ideas and quickly try out new service delivery approaches.

The transformation into a DSP will not happen evenly across all dimensions in service providers’ businesses. Organizations must transition from physical to digital products and services but will also need clear long-term visions for their businesses. For example, they will need to evolve their infrastructure to provide connectivity and services for machine-to-machine (M2M) and Internet of Things (IoT) applications.

Successful DSPs will also create new service models in partnership with third-party vendors, such as over-the-top (OTT) content providers. A service provider that can successfully manage partners will be able to maximize their revenue potential across the digital value chain, regardless of where services originate and how those services are delivered.

This lines up nicely with the SDN- and NFV-driven technology evolution happening inside service provider networks. Both SDN and NFV open new ways for service providers to create and deliver services, many of which will be forged through different kinds of partnerships with content providers, gaming companies, social networks and other companies that were previously considered competitors.

Without a modernized back office system and a next-generation BSS, it will be impossible to become a DSP. A true business model evolution is strongly dependent on the ability to monetize new services and applications and, by extension, fully operationalize SDN and NFV.

IT Enablers of a Digital Service Provider

Becoming a DSP is not a choice; service providers must become a different kind of company. The success of these efforts will largely depend on how well next-generation IT infrastructure enables evolution.

To become a DSP, IT systems must:

  • Enable collaboration with partners across all channels, product lines and customer segments. Ecosystems should be open and offer the fastest time-to-market for partners.
  • Provide unified infrastructure management across all services, products and networks. New technologies should be plug-n-play.
  • Be agile enough to allow real-time rating, charging and billing for internally developed and third-party products and services.
  • Enable omnichannel service delivery across legacy and new services.
  • Provide proactive customer experience management across all channels and partners. Today’s consumers expect nothing less.
  • Include an analytics-driven ecosystem to foster real-time decision-making and operational efficiency.

Becoming a DSP will require service providers to completely reimagine and reinvent their businesses so they can be truly valuable to their customers and partners. It is now table stakes for service providers to offer an integrated, omnichannel experience to their customers.

It’s important that service providers do not pretend that they can make this transition alone. But who is going to help them go through that change? Of the 115 service providers that Netcracker surveyed globally, more than half said the most important external factor affecting their progress towards becoming a DSP was the “lack of qualified partners.”

The road to digital success will involve strategic partners that are innovative, responsive to change and have the proven ability to execute large-scale initiatives. The journey must involve a trusted advisor that can deliver short-term value while also helping future-proof businesses for long-term growth. It’s a big responsibility but the right partner is out there: Netcracker. We have the expertise, the culture and the resources to help service providers execute on the most important step that they will take...their next one.

[Editor’s note: An earlier version of this column also appears in the March/April 2016 issue of Global Telecoms Business magazine (] 


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