Emily Hackman, Telecommunications Industry Marketing Director, recently sat down with Markus Persson, the IFS Global Telecom Industry Director, to get his reactions to the State of Service in Telecommunications 2023 research study.
Persson, a thirty-year telecom industry veteran, brings a wealth of knowledge and expertise to IFS. His intimate understanding of the telecommunications industry’s rapid evolution is evidenced by his three decades of experience driving innovation at Ericsson, where his OSS/BSS strategic team developed new, advanced services for consumers and B2B customers.
He now shares his insights into the findings of the IFS State of Service in Telecommunications 2023 research study, which highlighted that the telco industry is prioritizing artificial intelligence (AI), automation, and scheduling optimization to increase efficiencies, overcome labor challenges, deliver a richer customer experience, and comply with stricter regulations.
The top 5 challenges faced by telcos and CSPs regarding service delivery were:
- Increased Regulatory Requirements (49%)
- Outdated/insufficient service technologies (42%)
- Skilled Labor Shortage & Turnover (39%)
- Struggle in Meeting Customer SLAs (37%)
- Reduced margins (either in service or products) (31%)
Emily: “Markus, were you surprised by the top challenges?”
Markus: “I think they were true to a great degree. I’m slightly surprised that regulatory requirements ended up at number one. I was expecting that challenge to be in the top five, but that it would lead in the rank, it’s a bit surprising. I thought the labor skills, struggle to meet customer SLAs, and especially the reduced margins would be higher. And with connectivity being commoditized as a basic need, it puts further pressure on CSPs and telecom operators to maintain profitability.”
Emily: “Speaking of regulatory change, how will the recent openRAN movement impact the top challenges? Will it help the industry by making innovation easier, or hinder it?”
Markus: “Telco operators such as Vodafone have been restricted by the need to purchase a black box from kit vendors like Nokia or Ericsson. Due to the shortage of kit vendors in the market, there is minimal competition. Moreover, only a few players can afford to manufacture these boxes: Vodafone hopes to open this up and create more competition and innovation.
On the other side of the argument, these are complex, real-time systems, so to open them up and think you will maintain cost efficiency and performance is not something I see midterm. Incorporating software modules to enhance energy efficiency, speed, and performance in black box systems could be feasible in the future, but it may not immediately result in cost reduction. In fact, sustaining optimal performance could lead to increased expenses on an annual basis.”
Emily: “Do customers and prospects face challenges finding skilled labor?”
Markus: “Yes, it’s always on the agenda. How do we secure a workforce that can do this work, which is extremely complex and requires specialized training and skills. Young people don’t want to do this kind of work. So, vendors like IFS need to give them intelligent tools that are easy to use, that can help improve their work-life balance and daily schedules.”
Telecom companies often struggle with outdated service management technology, hindering their service delivery. Implementing new FSM systems can bring significant benefits:
- Better customer experience (67%)
- Revenue growth (64%)
- Attracting new skilled workers (49%)
- Ability to plan, forecast and optimize workforce (45%)
- Developing New Service Offerings (42%)
Emily: “Do you hear about these benefits and/or drivers behind new technology adoption in your conversations with our telecom prospects and customers?”
Markus: “I would say one of the major organizational issues of a CSP today is that the people dealing with the field are not incentivized on any of the things you see here on the list. Organizations don’t see that the field service management area is something that will greatly affect them.”
Emily: “Are you talking about the disconnect between things around customer management, either new customer acquisition or retention and the field operations?”
Markus: “There is often a disconnect between the teams working with customers and the technical staff responsible for field services at telcos or CSPs. While revenue growth and improving customer experience are top priorities, these companies often struggle to update their legacy field service management systems – many of which are incumbent or self-developed.
When it comes to sharing information about benefits, there is often a lack of communication within departments. If they were able to explain these benefits internally, then the C-suite would support an upgrade immediately. The top two benefits, better customer experience and revenue growth are always the main focus. One of the things that IFS needs to think about more when we do our customer engagements is to see how we can help telcos bridge this organizational gap.”
Let’s talk about the top five service management solutions that telcos plan to adopt in 2023:
- Scheduling optimization and automation (53%)
- Artificial intelligence and machine learning (49%)
- Simulations (47%)
- Wearables (38%)
- Parts management (38%)
Emily: “How do you think these most-wanted solutions are helping CSPs overcome their biggest challenges and embrace new market trends? With over half of our survey respondents listing scheduling automation as the top-ranked solution, is this directly correlated with the skilled labor shortage?”
Markus: “I would say all three top ones are connected to workforce challenges. They’re all an efficiency and preparation play. This falls into the issue of skills and profit margins. The number of staff that you have today need to be optimized in every way. They are cutting hundreds of jobs at some of these large CSPs. They must maximize the efficiency of the staff that’s left.”
Emily: “Is there anything on this list that surprises you?”
Markus: “If we look at them, we see two blocks of results that rank very closely: the top three and then the rest. When we at IFS look at the products we’re selling to large telcos and CSPs, it’s in line with that because many of our deals are Planning and Scheduling Optimization, which is a combination of the first two elements because it is infused with AI and machine learning. It also offers WISE, what if scenario explorer, a business simulator tool.”
Lastly, let’s look to the future. The top three future focus points revealed in our survey were:
- Sustainability (40%)
- Updating legacy service management systems (38%)
- Leveraging emerging technology (34%)
Emily: “Focusing on the first initiative, sustainability. How is IFS supporting this trend?”
Markus: “Sustainability for me is like UX. You can either select to have it as a function on the side, so when everything Is done, they do a sustainability review, or you have it integrated in your way of working, which is harder, but the only way to get it going. All companies talk about it, but I don’t believe everybody is honest about it. I agree it should be high up, this is not only about telco, but the survival of this planet. Telcos must pull their part of this. I’m happy it is #1.”
Emily: “Next, when telcos are talking about updating legacy service management systems, are they picking the best-of-breed products to replace an incumbent or homegrown solution?”
Markus: “Yes, when you sell the updated systems, you sell into higher management. They want to have efficient processes. They want to have better KPIs, modern systems, etc. If you’re not strong as a vendor, you will end up with 1,000 adaptations and destroy every architectural principle you had. Trying to convince the C-level that they should change out their system, this is a safe career move, IFS is financially sound. We have your back, we’re not going to disappear.
When you’re implementing it to people who are working with these systems every day, you must be smart and introduce this to them in stages. You must ask what their pain points with current systems are, show them how this system is better in those aspects. This will make it easier for them to accept change.”
Emily: “How are telcos adopting emerging technologies, like AI and IOT?”
Markus: “Technology doesn’t solve anything by itself. It gives you a different tool to solve your current issues, but that tool doesn’t work if you don’t prepare your environment for it. Everybody wants to put things in the cloud, you want to have the advantages and better hardware.
Leveraging emerging technologies is not just about installing them and having them there. It’s a huge change in mindset, processes, and procedures. Everybody says they want leverage emerging technologies, but a few know it will rock the boat. This is why it takes longer than anticipated to adopt new solutions. Technology is not the problem, it’s everything else, how you deal with change management, how you work with it, how you create it, how you associate it to people, how you apply your staff on it. That’s what takes times.”
Emily: “The media has been focusing on the potential dangers of AI. As a society, do we need to shift our thinking towards more practical uses for emerging technology?”
Markus: “Leveraging emerging technologies is becoming more real. There are positives and negatives. I think that’s probably the biggest lesson to learn here. Find a vendor like IFS who can do that analysis and testing for you. It means you can get the best of what emerging tech has to offer without having to buy it and try to implement it yourself. We infuse our solutions like PSO with AI and machine learning, and our R&D teams do the exhaustive testing and working with pioneer customers to find the best use cases for it in each of our focus industries.”
Learn more telecom industry trends and predictions by checking out the IFS State of Service in Telecommunications 2023 report and infographic.