What we talk about when we talk about digital transformation

Digital transformation is one of the core buzzwords used in the telecoms industry and beyond, right up there with 5G, cloud computing, and artificial intelligence. What sets digital transformation apart from the others is the sheer number of different things it can stand for.

Here we are sharing the opening section of this Telecoms.com Intelligence special briefing to look into how the industry practitioners have undertaken the tasks of digitally transforming their businesses, what are the key success factors as well as the main obstacles to the success of these endeavours, and which approaches they prefer to adopt to tackle the challenges.

The full version of the report is available for free to download here.

In its broadest sense, digital transformation has been used in the socio-economic context by organisations like the United Nations. The 2019 Digital Strategy of United Nations Development Programme (“UNDP”) sees in digital transformation the pathways to the UN’s sustainable development goals. Although it heavily relies on the communications industry to help make the strategy happen, e.g. “digitally deliver policy and programme support”, UNDP’s strategy scope goes beyond that.

When it comes to the communications industry, digital transformation is often cited as an overarching theme to encapsulate all the telecom operators’ efforts to expand their role from mere connectivity provider to that of a digital service platform. However, there are so many components in such a context that one would likely get a different definition of digital transformation from every industry person one asked.

To start with, certain quarters of the industry, still occasionally conflate digitisation with digitalisation. It is therefore necessary to clarify the concept from outset. Digitisation refers to the change from analogue to digital. For example, the process can be called digitised when the application form to open a mobile account can be filled out on the computer instead of in paper form. Digitalisation refers to the change of processes, often focusing on automating previously manual processes, using digital technologies. In the example of opening a mobile account, the process can be viewed as digitalised when the whole application process is done online. Digitisation is therefore a prerequisite for digitalisation.

In the mobile telecoms world, digitisation was completed when 2G replaced (the retrospectively named) 1G networks. Digitalisation, on the other hand, is still an ongoing process and by all accounts will be with the industry for a long time, not the least because digital transformation is so much more complex than digitising the radio signal.

Despite that telecom operators may not agree with one another what digital transformation means to them individually, almost all of them agree collectively that they must undertake the transformation. This is both a strategic imperative and a competitive necessity. It is also widely agreed that the main objectives of digital transformation include:

The following chapters of this report will look into the key steps the industry has taken and still needs to take, the major obstacles to overcome and the worst misunderstandings to dispel, to achieve digital transformation objectives. The discussion and analysis will draw heavily on the first-hand insight and experience from the practitioners.