A research report by PricewaterhouseCoopers (PwC) and Oracle into the IT priorities of European communications service providers (CSPs), has found that 60% of chief information officers (CIOs) are spending over half of their budget on maintenance and simply ‘keeping the lights on’ (opex) and will consider outsourcing and standardisation in the next year.
The report, entitled ‘Rethinking IT strategy… can it enable a step change in Communication Service Provider performance?, predicts a mass migration to commercial-off-the-shelf (COTS) applications, spelling potential danger for in-house IT workers who do not transfer to vacancies with IT firms. Billing, mediation and reporting would remain in-house.
Such outsourcing has become almost commonplace within the mobile industry in the last two years with Nokia, Everything Everywhere, Vodafone, O2 and Phones 4u all opting to transfer IT jobs to firms including Accenture, Tata Consultancy, T-Systems, Amdocs and 2e2.
But despite these actions PwC and Oracle foresee that a more strategic use of outsourcing and standardisation will be central to this strategy. Eighty-eight per cent of CIOs are planning an upgrade of their customer relationship management (CRM) systems in 2012 to free their focus on more strategic requirements and revenue drivers such as portal and content applications.
Gordon Rawling, senior marketing director at Oracle, told Mobile the changes are becoming more frequent as CIOs are now considered to be ‘agents for real business change’ and need to prove their business is running as efficiently as possible.
‘Whereas before it was OK to hire lots of developers to create multiple systems organically, there are now simply too many of these to really help achieve business objectives and serve the customers in the best way possible. It’s a bit of a spaghetti mismatch, so generic COTS solutions are seen as the easiest way to effectively integrate data and put the customer back at the heart of the business,’ he said.
One network to realise this early was O2, which partnered with IT service provider 2e2 to launch a joint venture company, O2 Unify. It claims the move provides businesses with the opportunity to outsource their IT and communications needs to a single provider and could drive efficiency savings of up to 30%.
O2 business director Ben Dowd said: ‘This move is absolutely based on what our customers have asked for. We are now seeing around 30% of bids requiring a totally converged solution and I believe with our ‘personal service’ we are in a great place with O2 Unify to provide exactly what corporate customers are looking for.’
Rawling says that mobile operators must think in a similar way if they are to cope with the technological advances expected in 2012 (see box) and he uses an airline analogy to explain how they can differentiate themselves from the competition.
‘They really have to use IT to focus on customer care and COTS can help with this. They should treat it like an aeroplane made by either Boeing or Airbus. All the airlines buy the same aeroplanes but then configure the customer experience programme to define their brand. IT can work in the same way and reach out to all consumer touchpoints in a way that will be essential for 2012, in an age of economic uncertainty.’
It’s evident that challenging times lie ahead and IT should help to make the difference for beleaguered consumers, but questions still remain over just how much personal cost this will entail for in-house IT workers.
Main challenges facing mobile decision makers
• 4G: Investment in long-term evolution will increase as the need for greater voice and data bandwidth becomes pressing
• Wi-Fi: Next generation Wi-Fi will force companies to quickly develop and execute relevant strategies
• Security: Mobile device security will be vital with the proliferation of smart mobile computing devices
• Cloud: Data security and privacy in the cloud will open up opportunities to develop deep relationships with customers as they start to make use of cloud services
About the survey
PwC was commissioned by Oracle to survey a mix of 30 senior IT executives in 10 EMEA countries in the first quarter of 2011 to understand their IT agenda with respect to COTS applications for the next 18 to 36 months. Forty-five per cent of respondents provided both mobile and fixed-line services and 32% were only mobile providers.