New business models bring an underlying shift in the product portfolio & service delivery
The above scenarios most likely will influence the NEPs’ product portfolio mix. Software-centric 5G network evolution will demand XaaS models, SW only product sales (from traditional HW & SW integrated product sales) and after-market services. Nevertheless, the value propositions for NEPs, described below, could solidify their market position, while driving digital transformation.
The emerging business models will not necessarily serve as a substitute for current models, but will instead co-exist with them. In that case, NEPs may act as the prime integrator where a telecom operator, subscribed or not to an NEP, would place an entire order on NEPs, which involve third-party components including software from other original equipment manufacturers (OEMs), hardware from original design manufacturers (ODMs), application vendors and security vendors. NEPs may have to work with ecosystem partners, SW vendors, and open sources to deliver products and services to customers.
NEPs could expand their portfolio services beyond their current product offering directly to enterprise. Under this scenario, use cases may include connected car (Automotive), telehealth, remote surgery (Healthcare), smart cities (Energy & Utilities), and smart manufacturing. In these markets, NEPs can extend their value proposition by bringing together vertical service providers (VSPs) and Communication Service Providers (CSP). In the vertical markets, NEPs will have an opportunity to deliver their products in SaaS models by creating an ecosystem of vertical apps and connectivity delivery solutions.
Product portfolio changes push NEPs to re-invention
Through 5G and the product/ service portfolio changes it may bring, NEPs need to revamp their external (via partnerships) and internal (via organizational structure, capabilities, and processes) strategy to align with a holistic service experience to end customers.
To retune their strategy, NEPs need to focus their resources in the following domains:
- Focus on partnerships and ecosystem integration with suppliers, vendors, and telcos
- Invest in Digital Technologies to address digital platform centric business models for service providers. These include digital services platforms, IoT platforms, and AI to improve service levels and service experience
- Restructure the product engineering teams to create collaborative structures organized around customer solutions
- Develop services and consulting solutions that become a vital part of the organizational DNA
- Undergo significant change to IT applications & infrastructure to address XaaS models, Partnership Ecosystem, and Solution delivery as a prime integrator. This will warrant changes in backend IT applications.
- Develop new front-end to achieve a complete new digital sales lifecycle, due to a new SW-centric business
- Acquire and/or develop new applications/ capabilities for contract management and service operations
- Incentive customer sales through lifetime-value programs
- Prioritize customer-outcome oriented measures and related data collection over product leadership
- Develop changes for to lead-to-cash process such as sales, CPQ, supply chain, and finance
- Develop new processes around contract management, entitlement management, and revenue recognition
- Package data (GBs) utilization into solution-oriented products to ensure customer usefulness
- Capture customer data related to usage volume, patterns, and service levels to optimize the lifetime value to customers
The changes in the domains described above drive the NEP’s capability to create, sell, supply, execute, and deploy its revamped services. That is why a detailed roadmap is needed to orchestrate the change drivers (e.g. 5G), the impacted domains (e.g. business strategy), the impact level (low, medium, high) and the new solutions’ scalability (e.g. XaaS, exclusive partnerships). The roadmap requires a holistic approach from the NEPs and a review of the options to build their IT capabilities.
We explore four options for NEPs to build IT capabilities required to enable their 5G digital transformation:
- Brownfield approach
Build on top of their existing IT applications
- Fully independent – Greenfield
Set up new systems for the new business
- Fully integrated
Orchestration of existing capabilities with heavy reliance on existing systems and databases, etc.
- Modular Greenfield
Develop a new orchestration (IT capability) layer simplifying lead to cash, leveraging few legacy IT functions
The above options need to be evaluated against multiple criteria; however, the most relevant ones for NEPs are the following:
Speed to market
A minimal viable product (MVP) is needed fast to support 5G business within the next 6 to 12 months
Fluidity in the market and ability to pivot, given the unknowns of the 5G ecosystems
Fully implementable, enterprise product. The product needs to become the future core IT; no quick start-up fix
No legacy creation
Technical debt creation needs to be avoided. Architecture development and execution are of paramount importance
The Modular Greenfield methodology should be the way forward, given that incremental ‘proven’ change and rapid scaling are the most effective enablers to run IT in the digital-first world.
Key principles for NEPs to overcome technical debt of legacy IT toward their digital transformation
Irrespective of the NEPs’ chosen option to build IT capabilities to drive their digital transformation, a few practical IT design principles applied with complex legacy IT organizations of global companies need to be covered. These principles should help IT organizations improve their agility and become more responsive to business change.
Design/ Organizational Perspective
(automate, but not too much)
- Select a mature, implementable technology
- Low-volume/high-complexity process/products are not the best course of action. NEPs should target high-volume/ low-complexity process/products and bottlenecks first
- Move from a functional perspective (where it is unclear where to invest first, creating the need to automate everything) to an operational perspective focusing on high volume/low complexity branches and bottlenecks
- NEPs should limit coding the organization because of its ever-changing nature
- “Who, where, when” go to Process/BPMN layer
- “What” goes to the functional systems
- Leverage “pre-built” processes from Cloud Apps vendors: Configure to quote, Order to cash, Quote to cash
- Leverage but limit to vendor “engines” (e.g. manage subscriptions, workflows)
- Select Low Code systems and Integration Layer at the front end (e.g. Salesforce, BPM & RPA, MDM)
- Expose validation rules (only) from Back-Office systems (e.g. Stock or resource availability)
- Separate “non-business/ regulation centric” apps like HR, Accounting, Cash Management
- Use object-oriented approach to product description to “extend” instead of “cloning”
Wipro Value-Added Offerings
The following services can be provided by Wipro to facilitate the understanding and implementation of the models discussed above so that NEPs can effectively develop their 5G strategy.
Assessment of NEP readiness to offer new business models:
- Assess the current operations, IT systems, and business models
- Study future business models, portfolio, and strategy
Define the NEP’s overall strategy:
- Develop Market & Competition Analysis
- Financial Analysis & Modelling
- Develop Technology Strategy
- Develop Business Process to meet NEP strategy & new business models
Define new Business Process:
- Definition of Business Process Flows
- Definition of Business Policies
- Definition of HLD
- Sequence Diagrams & Use cases
- Interface Lists and APIs
Develop IT Architecture:
- Define requirement on IT systems
- Develop Architecture
- Define Interfaces & APIs
Develop & Deploy new IT systems:
- Develop new systems (Greenfield / Brownfield)
- Deploy new systems
- Internal Wipro documentation