Service providers must build bridges to digital economy

TM Forum, the industry group focused on business effectiveness for the communications and media sectors, has warned service providers to start building bridges between where they are now and where they want to be in the digital economy of information, media and entertainment delivery, in a newly released TM Forum Insights Report.

The report concludes that although service providers may have managed to stretch their margins around voice and voice-related services for longer than expected, the writing is on the wall. They will be relegated to the role of dumb pipe unless they consider new retail, wholesale and value-add business models where they can be enablers to all stakeholders, including advertisers, retailers, media companies, content suppliers, financial institutions, government agencies and utilities.

Martin Creaner, president and COO, TM Forum commented: “Most stakeholders in the digital media value chain don’t want to reinvent the wheel, and service providers have a chance to leverage their networks, support systems and real time knowledge of the customer to become indispensable enablers of digital services.

“Profitability in the face of increasing competition will be key in the new digital economy, which means business transformation and operational excellence have a critical role to play in driving service innovation, customer loyalty and cost reduction,” he added. “To achieve all three, service providers have to also look at technology transformation: establishing the flexible, tightly integrated systems required to support new services. The ease with which service providers handle Procurement, Resource Management and Product Lifecycle Management will be key factors.”

Service providers have more to gain than to lose with business and technology transformations, said Creaner, as they are the only means by which they can both make very significant savings in software customisations, as well as generate millions of dollars with innovative services that will evolve in a Web 2.0 world.

This evolution will happen whether traditional service providers are part of it or not. Survival and longevity will come from creating a brand and services that win customers’ loyalty in an expanding value chain, but it can only happen through support systems, business processes, and data that all work with the same goal in mind, Creaner claimed.

Strategic Transformation for the Digital Economy was written by TM Forum with contributions from Telco 2.0, and sponsored by Nokia Siemens Networks, Martin Dawes Systems and Transverse and is available to all TM Forum members.

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