It is a challenging time for the telco sector. Incumbents face an evolving market landscape, with big tech threatening their market share, falling revenue from traditional income streams, increasing infrastructure costs, and new regulatory requirements. All these factors are compounded by escalating expectations from customers who desire more personalised experiences from their providers – not to mention the lingering economic uncertainty created by the pandemic.
Telco players cannot, therefore, afford to stand still. They need to be nimbler and act faster to remain competitive. Facing such a potent mix of overlapping challenges, it is incumbent on a business leader to take a step back and strategise a better future for the organisation. For telcos, an essential part of this journey is to take a new approach to their IT architecture, rethinking how they deliver value to customers and ultimately plot a path back to sustainable growth.
A new vision for architecture
A traditional monolithic architecture is a huge barrier to innovation in the telco sector. Its inflexible backend limits the possible services a firm can deliver to customers, with change requiring lengthy development cycles, more time spent testing, and a higher risk of failure when it’s rolled out.
Decoupled architecture, however, offers an unbridled opportunity for telcos to operate with agility and embrace the possibilities of change.
This approach involves a telco player deconstructing their legacy IT, decoupling services and their user interface layer. On top of this, the business must go through a process of refactoring, getting rid of complex dependencies and integration between current IT components, introducing a standardised set of common components, and crucially, a layer of business configurability.
Together, this work allows IT to shift the role it plays within the organisation – becoming an enabler, rather than an obstacle, to achieving the wider goals of the business.
A more agile telco
A decoupled architecture provides telcos with a powerful platform to start delivering agile change right across the business, everything from experience to brand, personalisation to commercial.
Telcos can reframe their IT estate into a more adaptive, modular IT ecosystem of services. Cloud is an integral part of this transformation, providing a feature-rich and flexible platform to start testing out innovative new services, and when they are ready, rapidly scaling them up to benefit the rest of the organisation. This agility will then support the shift to a more modular vision of IT, moving towards utilising microservices and APIs.
By pivoting to this ‘plug-in’ IT strategy, telcos can reposition themselves in the market as a digital business, providing a platform to cooperate and connect with other partners in the ecosystem. Our parent company NTT Group has already been following a strategy of ‘B2B2X’ digital systems enablement since 2014 – even going on to trademark the term.
There are huge potential efficiency gains from this approach as well. The reason for this is IT services are able to be used flexibly to enable rapid transformation and the delivery of cutting-edge new experiences – including all that new technologies like AI and machine learning have to offer – without requiring any alterations to be made in the ecosystem as a whole.
The keynote at the recent Gartner IT Symposium 2020 stressed how modularity enables the creation of a “composable business”. In effect, this describes an organisation that is architected to be flexible and adaptable in how it delivers its services, able to rapidly reorient itself in the face of change – vital to respond to everything from shift in customer habits to more monumental disruption like COVID-19.
Fundamentally, the success of decoupled architecture relies on an organisation putting agility front and centre in business processes. Employees need to be fully invested in Agile delivery and DevOps practices, creating a culture that prides itself on innovation and continuous delivery – only then will the organisation be able to secure the full benefits of modernised IT.
At a recent TM Forum event we heard from Elaine Carey about Three Ireland’s transformation journey. She highlighted that by implementing business agility, supported by NTT DATA UK, Three was able to remove complexity, organise its people to embrace change, and ultimately successfully move from a traditional telco business model to new digital business practices. As Elaine made clear, this paid dividends for Three, providing it with the right culture and approach to technology to deliver exceptional value to its customers.
At its core, decoupled architecture is more than a technical change to a telco’s approach to IT. It is a roadmap for telcos to embrace agile change and deliver solutions to market at pace to stay ahead of the competition. Furthermore, it offers businesses all the tools they need to innovate and produce the personalised experiences in demand from customers – as well as from internal employee services.
Above all, by ‘platformising’ their services, businesses can start to rethink their place within the ecosystem. Thanks to the ‘plug-in IT’ delivered by the shift to APIs and microservices, telcos have the flexibility to smoothly interface with other partners and start creating exciting new products and services for clients to support business growth. The real innovators in this space are embracing this open platform architecture approach right across the entire telco estate. We have already seen it pioneered by our sister company NTT Docomo – it now gets 20% of its income from non-telco services. In the days ahead, more telcos may choose to follow them along this path from being a ‘traditional telco’ to a ‘tech comms’ organisation.