The power of the internet harnessed through mobility, together with the availability of multiplatform and multiscreen content and increasingly smart devices, continues to redefine both the customer experience and their expectations.
The internet and associated applications are now an integral part of everyday life, and if we look closely, everything is becoming increasingly smart and connected. Be it reading news, watching videos, listening to music, connecting through social media or answering business email while on the move, the growing reliance on the internet has created an environment that is conducive to innovation by companies prepared to look beyond their conventional business models.
The information provider IDC notes that the rise of “the connected economy”, with services being provisioned and delivered as applications, has not only disrupted traditional industries such as music and entertainment but has even challenged the business models of well-established companies. Indeed, some of them have vanished as digital upstarts replace their once unshakable dominance. While no sector is immune to the digital phenomenon, the key issue is not whether companies need to make digital technology a strategic priority (that tipping point is now well past) but how they decide to embark upon the digital journey and turn it into a competitive advantage.
The digitally connected world that we are experiencing today can well be equated to scratching the surface of the possibilities around digital innovation in the future. Those businesses that fail to realise innovation, flexibility, and speed of execution are all essential to remaining afloat in a digital economy may not be able to survive the next wave of digital transformation. Be they a telecom operator or a company born on the internet, success in the digital universe will depend upon their ability to identify and deliver a unique user experience and ensure consistent customer engagement with their services.
In addition, IDC believes that monetising the unconventional business models and staying ahead of the competition — when the cost and time required for developing or replicating new services have both drastically reduced — will remain critical for success.
From the telecoms operators’ point of view, digital transformation has become an important factor in their life cycle, to the extent that they need to innovate and respond to changing consumer preferences with new business models; otherwise they will perish or, at best, be limited to becoming a commoditised provider of low-cost bandwidth. The availability of borderless interactive and innovative services is negatively impacting customer consumption patterns for core telecoms services – consumers are increasingly eschewing services such as SMS and voice, in favour of experience-rich digital services. This leaves telecoms operators with a difficult choice – to adapt and innovate or be left out of the digital revolution.
IDC sees enormous possibilities to innovate in sectors such as health care, governance, automotive, education and retail, among others. For telecoms operators, these possibilities translate into an opportunity to forward and backward integrate across the digital value chain. Nevertheless, telecoms operators will need to acquire a central role, and “front-end” the sales channel in order to capitalise on digital opportunities.
These services are delivered over fixed and mobile networks, but telecom operators have little experience in developing, provisioning, and maintaining complex digital solutions independently. Therefore, the success of telecoms operators in the digital world will depend heavily on their ability to develop and maintain partnerships as they compete with companies that were the product of the digital revolution. This would require them to carefully tread the path towards digital transformation with a clear strategy while simultaneously harnessing their strengths and mitigating the challenges.
Nevertheless, as citizens, we should be enthused about the experiences and convenience that the digital future has to offer. Rest assured, the market will continue to experience innovations, which will inevitably contribute to gradual but definitive cultural changes.
Learning from what has been happening around us, we can only imagine the enormous possibilities of the future as the effect of new technology goes further than its direct functionality. For example, when looking for specific information, many people no longer consult books but rely on the internet, which in itself amounts to a shift in culture. Another example is how social media has had an effect on the way we maintain our professional and personal relationships.
It is also clear to IDC that new permutations of technologies such as “Smart Cities” are now beginning to reach the critical mass of innovation. The possibilities across Smart Cities when combined with the “internet-of-Things” are endless, and will continue to usher in new services and deliver a level of convenience that was previously unheard of. Devices, appliances and systems that are increasingly connected also have an intelligence layer build into them. Such connected systems can access situations and trigger an event.
For example, a connected car, home appliance or preventive health monitoring system could trigger an alarm to the nearest available facilities in case of an emergency.
The rate of evolution in this connected universe is so overwhelming that one may now even be tempted to think that we have reached the pinnacle of innovation, with nothing further left to explore. However, I would like to remind those with such beliefs that the digital revolution is just getting started.
Bhanu Chaddha is a senior research analyst for telecoms and media at IDC Middle East, Africa and Turkey
