DISCLAIMER: THE VIEWS ON THIS POSTING ARE ENTIRELY MINE AND DO NOT REFLECT THE VIEW OF IBM, MY ISV PARTNERS OR MY CLIENTS.

In 2005, when there was a mad-dash amongst Telcos to get an IPTV initiative going, I had presented my perspectives on how the Telcos should approach IPTV initiatives. Over time, I have extended my views expressed earlier in the articles including the one that was published in the International Engineering Consortium (Business Imperatives for IPTV) journal. My article at that point expanded on my top 2 points that Telcos entering the TV business would have to pay attention to:

1. Focus more on getting their organizational and business model (especially partnering rather than doing everything on their own) right, rather than just TV technology, which seemed to be the fixation then
2. Follow open technology standards for building the IPTV platform and not a monolithic single format platform that allows only a centralized distribution of content

In 2009, IPTV plans of Telcos are still in early stages for many carriers and I will extend my previously stated views on the subject that a “TV only” or a “TV centric” strategy will not work for a Telco EXCEPT:

1. If its a Telco, like Verizon or France Telecom that owns the fibre to the home and can completely cut off its rivals (for all practical purposes)
2. If the Telco operates in a geographically small controlled market such as PCCW’s in Hong Kong where the content creation (or atleast aggregation) and distribution are controlled by the carrier
3. If the Telco has a special concession from regulator to provide the TV for a region or  market and is protected from potential rivals
4. If there is no existing viable option to desired TV programming in the service areas from an incumbent

Barring the above rare scenarios, having an IPTV strategy primarily for linear programming will be wasteful (if not an outright disaster); for most Telcos, IPTV needs to be viewed as a platform for building intimate relationships with customers and TV as one of the rich content media delivered. So, what WILL work for the majority of the Telcos that don’t qualify as the 4 EXCEPTIONS listed above …. Telcos need to:

a)      Offer TV as part of a basket (bundle, if you like that word though it is subject to certain fixed notions) of offerings to its customers – focus on interactive rich media services which also include TV programming – leverage the Telco’s ability through the platform to have the “back-channel” for information and knowledge on the customer’s preferences for information, communication and entertainment services

b)      Have TV as part of a life-style basket or a customer experience basket (see more on this on my earlier series of blogs titled ICE by ICE) or even maybe as part of a home gateway service that combines security, health monitoring, gaming, energy management – not the traditional bundle definition based on access technologies only such as the Triple Play and Quad Plays typically promoted with IPTV

c)      Phase in the type of TV offering, not necessarily go head to head for an “at par” offering of linear programming traditional TV to existing traditional TV providers in the offering area

d)      Start working harder on understanding the customer (at a more granular level) and creating a “TV like” offering and then going to full TV….. this would be in support of point (c) above

e)      Change the business model of the TV offering and provide convenience or a service that the customer base were sorely missing from earlier TV service providers

f)        Get over the myth that a “Trusted Telco” cannot send targeted messaging

g)      Either build the team or work with local partners for going beyond TV services set up at homes

h)      Have the basket/bundle of services as a key 1^st step in evolution to becoming a Home Gateway and put that possibility when designing the network, back office (OSS/BSS) systems or designing the field and support services operations

While the points under (a), (b), (g) and (h) are probably self-explanatory, the statements under (c), (d), (e) and (f) deserve a little elaboration.

Phasing in the TV offerings and offering a different business model

The business of providing superior traditional TV is not simple for anyone, including the Telco – intensive investments beyond their traditional xDSL lines are required, new regulatory environment to be grappled with, securing programming content from an existing industry with its own ways of operating is an art … the list goes on. Also, the argument from Telcos that existing customers want to run away from Cable providers (and they can step in) is mis-leading in most parts. Market feedback suggests that Cablecos are increasing their perception not only in their traditional TV domain, but also in their ability to service voice and internet customers.

So, why go head to head for an “at par” TV offering with strong incumbents; why not adopt a “guerrilla strategy for TV” … offer a “TV like” offering on existing broadband infrastructure (or incrementally enhanced broadband access) and then graduate to a full TV offering after:

• The Telco gets a better understanding of consumer preferences for programming including the “hot buttons”, irritants, conveniences they don’t get from their existing TV provider
• The Telco’s IPTV organization has the opportunity to understand the business, restrictions, economics of access to programming, the restrictions, the bargaining required with content providers
• The Telco’s organization gets time to adjust to becoming a provider of TV services – customer and back end operations and technology – with key steps in between to offer “TV like” services

So what do I mean be “TV like” offering. This, for the Telco could be based on the customer preferences, ability to partner and available access technology in service area would be rich media services provided on broadband connections but controlled or partly controlled by the Telco for:

• Personalized programming for a serving area or an individual based which allows mixing and matching of content for delivery to computers and perhaps extended displays on TVs
• Paid mobile “snacking” of premium content on their smart-phones or net-books and getting the full serving on TV or the local movie theatre or a big screen computer
• Access to exclusive coverage of an event that is hugely popular for the specific serving areas of the Telco or if not the full deal, then help create the buzz around the event by previewing rich media content on an exclusive basis
• Advertisement supported TV programming like some are already offering but the Telco can surpass based on intimate knowledge of the customer
• Tying in rich media with local services and goods from advertisers – yes, the return of the interactive shopping channel, but with a very local twist based on IP addresses of the serving region and tie-in

Getting over the “Trusted Telco” and no ads argument

A key favourite argument most Telcos have as to why they would not want to use advertisements or offer nothing less than top grade TV service is that  they are “Trusted” and cannot sully their reputation. I don’t buy into this reticence for the following reasons (to point a few):

• Younger people don’t care about Telco brands and so don’t many existing customers who have had bad episodes of customer services, billing problems – they will flock to an offering that reduces inconvenience, offers them a bang for their buck, gives them the latest end user device and meets their individual preferences
• Ads can be “micro-targeted” with advances in IP technology and delivered only to those who “opt-in”; so make the process of “opt in” and “opt-out” easy and get on with building an add supported model, promotions as plots model or whatever that the advertisers can work out with the Telco
• Finally, if there is hesitation for “opt-in”, the Telco could go for a customer preferred list of advertisers .. who services the consumers’ hobbies, lifestyle, needs and wants

Attachments: the two papers in PDF from 2005:

Making the right technology choices for IPTV and Triple PlayTelcos and Triple Play Services – Busines Imperatives

DISCLAIMER: THE VIEWS ON THIS POSTING ARE ENTIRELY MINE AND DO NOT REFLECT THE VIEW OF IBM, MY ISV PARTNERS OR MY CLIENTS.

In my previous 6 postings, I defined what an Integrated Communication Experience (ICE) centric organization should be, how Telcos are best equipped to be the ones to deliver the ICE (Information, Communication and Entertainment) services and discussed 4 of the 5 imperatives that they need to focus on. This posting deals with the last fo the 5 imperatives.

As Telcos Re-think (the experience they wish to deliver), Re-Learn (what matters to their customers and what are the real metrics to measure success), Reorganize (by internal alignment to the customer experience), Re-Cast themselves in the ICE value chain (by partnering and becoming the orchestrator of the ICE eco-system) to re-discover their purpose and role in the ICE value chain, they need to Re-view how they make technology choices.

Employees of Telcos (even their marketing teams sometimes) generally are fluent with Information Communication Technologies and get excited with new technologies and jump into all things technical. Most feel comfortable with technology, lulling themselves into a sense that they are making the right technology choices. While these choices maybe good for their individual businesses, I believe that to provide a true Integrated Communication Experience, the approach to making technology choices has to be different than in the past for the Telcos wishing to be at the core of providing ICE to their customers. For these companies which want to be the ICE providers, all decisions regarding technology choices should start with defining a customer manifesto that in turn drives the organization structure and important processes to focus on to enable ICE. The Customer Manifesto, along with the processes & organizational focus should dictate the technology choices and not the other way around where Telcos buy the technology and then define the services and experience they can offer.

So what do I mean by a Customer Manifesto ? A Customer Manifesto needs to be written in the customers’ words and should reflect the experience she/he/they would want for their Information/Internet, Communication and Entertainment services. To illustrate the point, here is a hypothetical Customer Manifesto for a fictitious Telco serving a set of very demanding individual consumers. The Manifesto would be written in a format like a message to the Telco :

• Search for the best way to deliver to me the stuff I care most about
• Anticipate my needs and send me content pro-actively

• Do not ask to register for services individually

• Allow me to pay through my bank card, credit card, pre-paid ….

• Adjust your offerings with my changing needs

(Side-note: There are many creative ways to derive the Consumer Manifesto but that is beyond the scope of this posting).

Once the Customer Manifesto is clearly written in simple words, this should become the guiding principle that everyone within the Telco needs to remember, understand and incorporate in every decision they take. Together, the ICE (experiences) to offer (dealt in my 3^nd blog in this ICE series) and the Customer Manifesto should drive the customer facing processes and the technology choices that the Telco makes.

Lets take the hypothetical example of the Customer Manifesto example from above further to illustrate how this would drive the process and technology choices. Lets take point 1 – “Search for the best way to deliver to me the stuff I care most about.” This could imply driving processes for pro-active market intelligence and customer analytics that lead to prioritizing technology choices for Business Intelligence systems that leverage information from Mediation systems collected from various points in the network and support systems. Similarly each of the other 4 bullet points in the fictitious list of the Customer Manifesto above would drive process and technology choices that are relevant and meaningful and matter in delivering the Integrated Communication Experience.

A key problem that Telcos face due to their structure of being organized around service versus experiences is that they cannot fund and invest in IT and network technologies that are critical for them to succeed but cannot be funded by their individual businesses. Horse trading among the executives in charge of the funds is the only way to get funding in place for investments that are big but critical for providing an awesome customer experience and relevant customer offerings. Sub-optimal decisions are the norm for technology decision in such a scenario unless a CXO level executive put her/his weight behind a technology choices. However, if the Customer Manifesto and the selected Experiences drove the allocation of the bulk of the funding for technology investment at the Telco, the story would be different. There will always be turf battles between executives, vendor preferences, past preferences for specific technologies but overall, the re would be a vast improvement on how technology gets funded and the choices that are made. Platforms would be built and true immersive customer experiences delivered.

With that, I have at the high level laid out the 5 critical imperatives needed for Telcos to be the ones offering ICE (Integrated Communication Experiences) for the ICE (Information, Communication & Entertainment) business. This ICE mini-series of blogs is my high level recipe for success – to be tailored to the specific market and the specific position/aspirations of the Telco in the market.

]]> http://convergenceman.wordpress.com/2009/07/22/telcos-providing-ice-the-5th-imperative-%e2%80%93-making-technology-choices-for-an-integrated-communication-experience/feed/ 0 convergenceman http://convergenceman.wordpress.com/2009/07/20/telcos-providing-ice-4th-of-the-five-imperatives-the-partnering-mind-set/ http://convergenceman.wordpress.com/2009/07/20/telcos-providing-ice-4th-of-the-five-imperatives-the-partnering-mind-set/#comments Mon, 20 Jul 2009 13:19:06 +0000 convergenceman http://convergenceman.wordpress.com/?p=15 ]]> DISCLAIMER: THE VIEWS ON THIS POSTING ARE ENTIRELY MINE AND DO NOT REFLECT THE VIEW OF IBM, MY ISV PARTNERS OR MY CLIENTS. This is the penultimate blog in the series on Integrated Communication Experience imperatives for Telcos and focuses on the partnering by Telcos with other players in the value chain or eco-system of creating, delivering and getting paid for Information, Communication and Entertainment services to end customers.

This posting focusses on partnering strategically to achieve a specific set of goals with natural allies, vendors and existing/potential competitors. Importantly, it argues that partnering should be done with a mind-set that allows the Telcos to “walk away” from a partner once the objectives are met and re-engage again, should there be the need to do so so again. Most Telcos have relationships with vendors of equipment, content provider or IT service providers. These relationships typically tend to be “buyer-seller” types and not true partner types.

The definition of partnering I am using in the context of this blog is “mutual relationship for the parties to achieve specific goals with a 2 way flow of benefits, beyond that of a buyer-seller. Most critically, partnering implies that both parties have a common alignment on what needs to be achieved TOGETHER and preferably in what time frame.” The rationale for partnering is self-explanatory: no Telco rules the value chain of its offerings and should not attempt to do so either. Each Telco, due to its unique expertise, past successes, investments, acquisition and it regulatory environment has built a set of capabilities. Telcos need to have a very clear understanding of their differentiated capabilities and partner for gaps in their arsenal. They need to be the master of partnering – short term, mid term and long-term alliances. Period !

Typically, Telcos in developed countries and in state controlled settings like to build everything and control every point of the value chain, even those areas where they are ineffective or too costly to be taking part in. For the Telcos to be the Integration Communication Experience (ICE) provider of choice, one of the toughest acts is to “let go” as it requires a mind-set change across the organization (or atleast most of the organization). The re-think required around partnering for Telcos will require the organization to view partnering differently, manage it actively (like a portfolio), have different sets of expectations with the same partners for different objectives and invest in people with different kinds of skills. Let me lead in with two examples of areas Telcos invest a lot in whereas they could get away with lower risk if they partnered – billing and network upgrades. I have rarely seen a Telco that has built and can run a billing presentment system cost effectively. But I have rarely seen a Telco that does not pride that its strength includes a full fledged billing system (mediation to calculation to presentment) . I am waiting for the day when I see a Telco think of billing differently and not spend 100s of millions there but rather partner with an internet payment mechanism or even a Web 2.0 company, leverage their billing and payment system for atleast the calculation and presentment. The partnering with the external biller or Web 2.0 company may not produce the most ideally formatted bill, but it does the job well, perhaps ties into other payment systems that the customers already use and the Telco is not encumbered with maintaining a legacy billing system.

Again, speaking more for the established Telcos (rater than new players), I have rarely seen a Telco that does not want to build and run its entire network infrastructure on its own even if it be in a completely new technology area where it has ZERO skills e.g. Moving from CDMA to GSM based network or getting into video services when it all along provided Plain Old Telephone Services. The partnering mind-set, if adopted would allow the Telcos to make a deal (fixed objectives, shared risks, fixed duration, Service Level Agreements) with the Network Equipment Providers or proven System Integrators in a classic or a modified form of Build Own Transfer or Build Own Operate mode. Sure, the Telcos will lose out on margins in the period that the alliance is operational and the employees won’t get the joy of building or managing the build of something new but it will save 100s of millions of $$, provide a quicker route to market, swifter absorption of new technologies and flexibility of options for operating the new infrastructure. The Telco employees can be paired with the partners at specific milestones so that they gain the intimate knowledge to understand the new technology at the right pace from deep experts and manage the environment after expiry of the alliance. The alliance period with the partner will allow the Telco to get its staff to focus on designing and developing the integration points for IT systems with exiting operational systems (OSS-BSS) infrastructure.

The two examples above were meant to illustrate how Telcos by partnering can greatly mitigate the down-side of the costly technology risks that have to undertake regularly as technologies shift and new services are added. Their need to continuously search for “killer applications” to justify investments will be minimized and they can focus on building the right platforms and architectural approach that sets them in the pole position to be the provider of choice for an Integrated Communication Experience.

The two examples of billing and investment in technology changes are but a part of the broader partner re-think required. The same partnering mind-set needs to be extended to managing and delivering rich media content, advertisement handling and delivering the Digital Home experience (beyond entertainment) to the customers to illustrate a few areas on the consumer side. On the enterprise side, a clear understanding of a Telco’s strength is essential so that the Telco can leave the build-out of unique customized experience for enterprise customers to System Integrator instead of being bogged down by long SI engagements. There are various other areas of partnering be it with local communities or other utility providers that in my view are completely under-exploited currently due to a buyer-seller mind-set versus a partnering mind-set.

While building the platform for delivering ICE, with its partners, the Telcos needs to be able to orchestrate the eco-system of its partners and not want to grab all possible revenue by getting into areas it is not skilled at. The Telco should focus on whatever it is particularly good at and it could be one, any or all of the following – usage tracking, exploiting a great franchise name in its local market, provisioning capabilities, established payment systems, a well orchestrated logistics system to get services set up or deliver equipment to homes/businesses, a legendary customer support organization, a great CRM system and Business Intelligence system that allows intimate knowledge of the customer, a great physical network or as a reputation of providing secure reliable connections …. for the rest, it should partner aggressively and extensively.

The focus of measurement partnering success should be “Flow-through” revenue and “transactions executed per customer” on its network due to the combined efforts of the eco-system it orchestrates and the cost it made to realize these. Putting a realistic price to cost avoidance and risk mitigation by partnering is essential to counter arguments on why not to partner.

The other key point I want to re-emphasize (if not already clear in my examples above) is that partnering for the platform, network technology, content or skills in most cases will not be a perpetual partnering. Time boxing objective of each partnering agreement is essential so that the benefits for a defined time period are tracked, measured and there are no misgivings on what the partnership intends to achieve and by when. Key metrics should be in place, non-achievement of which should trigger corrective action or even a dis-engagement if mitigation steps don’t work. The agreement with the partners should be written in clear language that allows the partners to part amicably and re-engage in the future for another set of mutually beneficial objectives. In other words, language should be written by business people with legal teams only helping ensure that there are no severe violations or indemnity exposures to the companies – agreements with “light legal touch”.

Success based on a series of light legal touch agreements with partners, flexibility of mind-set on duration of partnering and extensive extent of partnering will allow the Telcos realize and understand their core strengths and remove any ambiguity on their mission – as orchestrators of the eco-system for an Integrated Communication Experience. Once this realization is achieved, then new dimension of partnering beyond the traditional eco-system will open up and the Telco will be on self-perpetuating cycle of partnering success.

In my previous postings, I outlined the advantages that the Telcos have in becoming the preferred Integration Communication Experience (ICE) provider and discussed the 1st two key steps in moving in that direction. In this posting, I will focus on the 3rd of the five imperatives laid out by me – focussing on a different set of financial metrics than they currently do.

When I look at financial reports of Telcos anywhere over the world, even the best of the companies typically talk about the normal corporate financial measures and then go into Telecom industry accepted metrics such as ARPU (Average Revenue Per User), % share of markets by access types (Wireless, Fixed line …), churn. My contention is while these are all good indicator’s of a company’s health especially when viewed in conjunction with each other, they limit the Telcos measures to specific narrow areas. Isolated financial measures lead to isolated thinking & action, isolated incentive programs for executives driving behavior that is siloed and has nothing to do with becoming a true provider of full services of the Telco.

Therefore for all integrated Telcos, a more appropriate measure probably would be Wallet Share of ICE (WASI ** – trade-marked by me ) … I am sure that by now you are getting the drift of where I am going with this if you have read my earlier posts. WASI would measure the total % of the spend by end customers in the Telcos’ offerings across Information, Communication and Entertainment that passes through the Telco’s books.

WASI (Wallet share of ICE) = Telco ICE revenue from all subscribers in service area
____________________________________________
Total spend on ICE by subscribers in service area

The numerator could comprise of revenue that hits the Telco’s books not only from core access and content services created by the Telco, but content and digital merchandise revenue share form 3rd party content providers, software vendors et al.

The denominator could comprise of the total spend of all households in the service area on digital entertainment, communication and and information services.  My point is not to get these measures perfectly right and spend millions of dollars on getting consultants to measure these but rather use this measure as a strategic guiding light, as the communication vehicle for all stakeholders on what the aspirations of the company are and to galvanize every employees in the organization so that they look at the market holistically across Information, Communication and Entertainment and not be complacent having but in x or y number of extra access lines.

This measure will embed the thinking in every business executive to engineer deals which are co-operative but time-bound with partners who share revenues. It will push the IT organization and the vendors who work for them to stretch and put in place the right systems which accurately measure how the ICE share is being split up … all of which will lead to greater awareness of end customer, more informed negotiations with content partners and strategy/actions that will eventually lead to a more intimate relationship between the Telco and its end customer.

So the WASI was the strategic measure on the revenue side, now lets move to a fundamental change on the cost side measurements that is required to be a true Integrated Communication Experience (ICE) provider. As outlined in my earlier posts, Telcos have built vertical organizations around specific technologies so the typical investment “gating” process in most Telcos still is “siloed” and allocated to specific offerings with a few key big network strategic spends thrown into the mix. An offering X is planned, the sponsors fit the offering into a bucket by departmental line and a portion of the network cost and all non-network costs (including the big IT investments) are all allocated to the specific offering. When the financial folks get wind of the costs, they reject the offering or wheedle it down till it become a “siloed” offering that is often meaningless to the customer. What is required is not costs by products or departments but rather sharing all costs (network to IT to customer Care to Sales & Marketing) for new offerings but being stringent in evaluating how the offering will increase the WASI for the company. Thus major departmental battles are put aside, horizontal systems supporting multiple offering are funded, resources are allocated where it matters most – getting a bigger share of the ICE wallet of the subscriber and thus increasing the relevance of the Telco to the consumer. No longer does every offering have its own provisioning, customer care and billing system, rather the company builds common infrastructure that serve multi-divisional offerings. No longer will the need be for the recurring “systems rationalization” exercise undertaken by IT intermittently at the cost of millions of $$$ trying to undo the harm created by funding specific offerings with their own supporting IT systems.

Having gone through identifying the true ICE needs of the customer and building the organization and financial measures that support the ICE model, the net step is to re-think partnering. More on that in my next posting. Adios !

In the previous post, I outlined that the 5 most important imperatives that the Telcos need to focus on as they RE-INVENT themselves for greater relevance to the end-user are:

1. Figuring out the experience to offer to the customer
2. Shifting organization from a technology focus to end user experience focus
3. Re-focussing on a different set of financial metrics
4. Changing the way Telcos partner with others in the industry
5. Making technology choices that support the Integrated Communication Experience

The focus of this post is on re-designing the organization so that the Telco is organized on the principle of delivering the end user experience that the customer buys rather than on technology and individual services.

Telcos in the past have built entire vertical organizations (from network engineering and operations right up to marketing and customer care) around specific technologies therefore they typically have multiple network, product development, product management and sales channels for both core (ATM, Frame Relay, IP and myriad voice technologies) and even access technologies (ISDN, DSL, different satellite technologies). While I understand the continued need for specialized engineering and operations teams to build, operate, articulate and resolve issues for specific technologies, the idea of preserving stacked sales & marketing, IT and customer care channels for technology specifics only creates duplication, turf battles and a terrible end customer experience.

The organization design necessarily needs to start by building off the “experience” bought by the customer. The Telcos organizations facing the customers need to be organized around delivering the processes and tasks required to fulfil the set of purchased experiences. This will entail breaking the departmental silos and reaching across boundaries that keep the customer facing units of the wireless unit from working side by side with those from the terrestrial video unit, the IPTV team, the satellite TV team, the traditional PSTN service unit, the VoIP team, so on and so forth …. and instead organizing the customer facing people around delivering common sets of processes supporting different purchased “experiences”.

Only the deep network technology and engineering team that build, run and look after network technology components need to be specialized and organized around specific technologies for access, backbone and inter-carrier transport.

While re-making the customer facing and IT organizations, it is imperative to realize that the customer needs will change periodically and so the processes and organizations supporting them will have to constantly adjusted. Even more critically, Telcos will need to acquire people who can anticipate the needs of the new type of customers who buy these “experiences” especially customers who have needs that combine applications, network capabilities and 3rd party partner offerings (e.g. gamers, those who go for rich media offerings which have high value but short shelf-life etc). The skills mix at Telcos will have to adjust to capture and then deliver these new “experience” based capabilities. To illustrate the point, I am jotting down a short list of some of the skills that Telcos will need to build expertise on:

* Sales and Marketing (including product development and IT ) professionals who understand that services in the market may be ephemeral and will need to be retired if the uptake is not there, that fads needs to be captured as they realize big bucks even though these may be for very short time and those who understand the new digital media business models
* More lawyers and business development experts – who can negotiate interesting contracts and sustain relationships with partners for varying lengths with different objectives (see more in my upcoming post on “Changing the way Telcos partner”)
* Financial folks who can help Telcos understand how to look at offerings as a portfolio of risks and returns
* Specific skills for specific business models that the Telco may follow – e.g. classified sales folks (possible for targeted advertising)

With these changes in organizational design and skills enhancement, the Telco will have put in place the 1st essential enabler capability to evolve into a true Integrated Communication Experience provider. More on the next imperative – the need for a different set of financial metrics.

Side-notes:
* I do not wish to underplay the challenge of re-designing the organization but courageous leaders have to be sought and given the charge of re-creating from a fresh blue-print
* Anything short of a complete re-write of the organization map on a clean slate will only delay the inevitable suffering (or atleast dilution in returns) in markets that are competitive
* The current economic troubles have perhaps even created the right opportunity for some of the Telcos to undertake these drastic organizational measures and even hire skills who have been dislocated from other industries but could be valuable in the new Telco (e.g. classified sellers in newspapers, previously high flying negotiators, financial portfolio experts) as it prepares for the next up-swing in the economy.

In my previous blog, I highlighted the key advantages (enablers, technological, historical connection with the customer etc) that the Telcos had in becoming the true provider of ICE (Integrated Communication Experience). I also highlighted that a variety of reasons (internal organizational inertia, regulatory reasons etc) have prevented most Telcos from exploiting these advantages (though some Telcos have taken tentative steps in the right direction). This posting is the 1st of five blog postings that deal with the 5 most important imperatives that the Telcos need to focus on as they RE-INVENT themselves for greater relevance to the end-user, namely:

1. Figuring out the experience to offer to the customer (focus of this post)
2. Shifting organization from a technology focus to end user experience focus
3. Re-focussing on a different set of financial metrics
4. Changing the way Telcos partner with others in the industry
5. Making technology choices that support the Integrated Communication Experience

The starting point is Figuring out the Experiences to sell. Generally, all Telcos know what their customers want – at an aggregate level – but they need to dig deeper to understand the experiences that each sub-market in their serving area needs, wants or would be willing to pay for if offered the chance to buy. The exact experience for each Telco and its sub-market will vary but to illustrate my point, here are some simple examples of the experiences that the end customer may want to purchase on the consumer side:

* Infotainment (Information & Entertainment) wherever I am
* Infotainment at home
* Remote worker from home
* Interactive TV across all my end devices
* Interactive TV on my computer
* Eclectic TV on my computer
* Charge me on one bill for my extremely mobile family
* Reach me anywhere in the world/region/city on my mobile device

The list can go on and on in the consumer side and the Telco needs to figure out what experiences the customer wants when buying from/through them communication, information and entertainment services (or even merchandise). The key point is to define the list of “purchasable” experiences, unconstrained by current capabilities of offering these experiences. Defining the list of customer experiences that the end customer can relate to, rather than selling them a list of technologies generally described in 4 letter acronyms using industry specific jargon – EVDO, GPRS, HSPA, SDSL, ADSL, IPTV ……. – will be the 1st step in moving away the old ways of doing business.

A similar case can be made (though to a lesser extent given the typical buyer’s need to get into technologies) on the enterprise side of moving away from selling “feeds and speeds” to selling experiences such as:

* Dispersed and mobile workforce solution
* On demand conferencing services world-wide, regionally, in-city
* Low wireless charges anywhere: world-wide/regional/in-city
* One number anywhere: world-wide/regional/in-city

Once the inventory of experiences to be delivered is defined, then these experiences become the drivers of the capabilities to be built (organization structure, in-house technology, partner capabilities etc) to support these experiences (most of them with common enabling capabilities). The marketing message and sales efforts are altered to reflect these experiences changing the Telcos’ focus from selling voice/video/data services to communication/information/entertainment experiences. Of course, before finalizing the list of experiences to be offered, a rigorous financial analysis needs to eb performed but more about that in a later posting.

In the next blog posting, I will go into the 1st of the enablers required – organizational design shift – to support these customer experience focussed Telco.

Side-notes in the context of this blog:
* In my dealings, I have seen more evidence of experience based offerings for consumers in Asia (followed by W Europe) than the rest of the world in the consumer space while
* In contrast, I have seen more Enterprise or business focussed experience packaging in N America though often very customized and thereby expensive.

The traditional Telecom Service providers (or Telcos) have done a fabulous job of providing reliable dependable voice services (in most cases) for ever; as the communication shifted from voice to data, the Telcos built the pipes (where it made economic sense to) to get these bits and bytes to the end customer. They then expanded the pipes to provide even bigger pipes (our broadband connections) to our homes and offices. In the process, they learnt to deal with our (the consumer’s) technology installations, our needs, our concerns and got to know us at various levels. As we started sucking more joy out of our communication straws (work e-mails, personal e-mails, information, entertainment) and needed more (video, our social existence foundations – facebook, linkedin, blogs, …..), new players became interested in us (Cable companies as alternative providers of all things Telcos provided plus TV, Web 2.o companies that provide us business and personal convenience, fun and more and entertainment/information providers who wanted to talk to us directly) and our Telcos have had to work harder to keep the Cablecos away from us for data and voice services as well as enhance the foundation (network, access pipes) that allows us to enjoy our services from Web 2.0 and information/entertainment companies. The Telcos started being taken for granted by their customer, their services became transparent to the customer and the Telcos started to lose relevance. So they bought new properties, made a few alliances and tied up with content providers (reluctantly) so that they could provide us information, entertainment, business services et all. But sadly, they did it in sporadic bursts, lacked coherence in their approach and often did this in a very restrictive manner (e.g. choosing where we could go for our services on the web using our mobile phone ). As a result, most Telcos are in a bad shape today when it comes to providing us an Integrated Communication Experience – they still have to figure out what they serve, who they serve,to what extent they serve, what they let go off and what they keep under their control. These decisions are being made constantly but often in a non cohesive manner and in individual departments. But the Telcos need to do a major RE-THINK – think through their business portfolio through the prism of what the Integrated Communication Experience (ICE) means for their customers, lay out the key functions that enable this ICE experience, and then work through a capability analysis on the revised organization, technologies, processes and partnerships that they need to deliver the ICE to their customers.

The good news is that once they work through this ICE view of the customer, they will realize:
a) They have a lot of relevance as they know more about the customer than they think they know (this posting is primarily focussed on this point)
b) They will find redundancies in technology platforms, organizational capabilities and services that they can rationalize and reduce expenses while providing better and more meaningful services to end customers
c) They will be able to identify partnership opportunities for the immediate, short and long term (more about it in another posting) that will enhance their value to the end customer and allow the Telcos to regain their confidence

With that preamble, let me launch into the key existing capabilities that Telcos have that allow for delivering ICE. The Telcos for various reasons (regulatory, old habits, unwillingness to try new ideas, lack of technology in the past, siloed organizations with separate narrow agendas) have been unable to exploit these capabilities but now they simply cannot fritter time and under-utilize these capabilities. So here are a few thoughts on what Telcos know about us (the end-users) and how they can perhaps use these capabilities to be more effective (I see these as just thought provokers that the Telecom industry needs to work on , build upon and run hard and fast with):

1. Telcos know WHO we are – we log-in, set up our profile for data/voice services and get IDs that allow Telcos to quickly identify us
2. Telcos know WHERE we are – fixed location for our home phones and DSL connections, cell triangulation when we are moving
3. They know HOW TO GET TO US – low or high bandwidth pipe, wireless or DSL or dial-up
4. They know HOW TO GET THE $ from us – pre-paid cards, fees for subscription services, ID chips on our phones, SIM cards (in GSM world) … and so on and so forth but they know how we pay, how they can collect the money from us and have reliable, trusted mechaism is place for it
5. They often know WHAT WE USE – the applications and services profiles whether provided by the Telcos or a pass through service provider at wireless/wireline are knows to them
6. They know WHERE WE GO – on the net from home or while we move – end calling party or URL is being systematically logged
7. They even have HUMAN TOUCH-POINT to us when things go wrong with our network, applications, equipment, they have established large customer care centres that can interact with us – that can solve issues, log issues, work on our billing concerns know us on a human level, sell to us etc

As you peruse this list (this is not even an exhaustive list), you can see the Telco’s existing power in providing us the Integrated Communication Experience we need for all our information, work, entertainment needs ANYTIME, ANYWHERE that WE CHOOSE . Also, think who other that the Telcos have this power (probably no one). But think harder and you will realize that all this rarely delivered to you cohesively by the Telco (I can think of atleast 50 new services that enterprise and individual customer of Telcos can get from my local existing Telco if they could bring their act together) and that is why you want to move away from them at the slightest cost/value advantage, often forget that the Telcos exists when you are downloading the latest music or movie or planning an instant get together with your friends in a seamless manner.

But this is my assertion that when the Telco brings all of its power and supplement this power by brokering others’ services (Web 2.0, information/entertainment) ANYTIME, ANYWHERE and in the most convenient fashion, the Telco will be the ICE provider you will have no problems sticking with. Telcos HAVE to therefore make this happen for you or slide into irrelevance despite having the initial HUGE advantage of knowing you (the end-user).

Large Telecom service providers (Telcos) have divisions that deal with each of the 3 pillars – Internet services, communication (connecting data/information source to end point) and entertainment (TV/Games/Information services and more). It is just that they seem to have a real challenge in bringing it all together for an Integrated Communication Experience for their consumers (individuals, companies). Web 2.0 (Google, Yahoo, Facebook etc) companies are delivering interesting services to the customers but are in a struggle with the Telcos on how much they can bypass the Telcos and the Cablecos who provide access to the customer. Cable companies are good with TV but often struggle with handling the customer or are missing the much needed wireless component. The big Entertainment and Information companies, like the Web 2.0 companies are also keen to get to the customer directly and leave little for the ones who provide the networks and access. The Electrical utilities have often made sporadic moves to get into the network and access technology business thus adding to the players in our industry. So all in all, the boundaries of who provides what are constantly shifting, there are no confirmed leaders and therefore for us in the industry (the Internet, communication and Entertainment industries that is), these are really exciting times as new business models get created, capital adjusted and new customer offering created. There is lots to think through, discuss and then run with.

It is these business, strategy aspects that will be addressed in a series of blogs titled “ICE by ICE”. My blog postings will primarily focus on topics that deal with delivering ICE (the integrated communication experience) through ICE service providers (Telcos, Web 2.0 companies, Cable cos – increasingly, Electrical Utilities – less so as of now). Instead of talking about the exciting new technologies, the blog will deal with business impacts, evolving approaches, possible business models and also often take a hard look at what is hype and what is reality (we in the industry often get carried away by our own imagination and don’t face up to the reality). What I am hoping to do is put out a perspective, get enough people upset , animated and/or engaged to generate a real conversation on delivering ICE through ICE and TOGETHER providing some meaningful views on what should/could happen. If some real perspectives are formed and we can put it to work in our day jobs to make our industry use capital efficiently, offer better customer experience or re-think what we are doing, the blog would have served its purpose.

Disclaimer: These views are slowly that of Manish Singh and do not represent the views of of IBM,  Manish’s customers or ISV partners.