How Telcos Stay Relevant In A Digital Revolution

Judy Cubiss and Ginger Shimp

Digital trends are doing more than taking over the telco industry. They are disruptive, changing the way telcos must do business. Companies such as Netflix, WhatsApp, and even Google have completely transformed the customer experience—and customer expectations—through speed and efficiency.

Enter the realm of hyperconnectivity.

Recently, Brian Fanzo and Daniel Newman, co-hosts of the popular S.M.A.C. Talk (social, mobile, analytics, cloud) technology podcast, caught up with Stephan Gatien, global head telecommunications industry business unit SAP, on an episode of an extraordinary series entitled Digital Industries, which examines how digital transformation is affecting 16 different industries.

over the top players are leveraging the hyperconnected society to deliver services that used to be the bread and butter of telcos

With everything involving the Internet of Things (IoT) happening lightning-fast and at the stroke of a few keys, customers of telecommunications companies (telcos) expect the same degree of service. Telcos unable to meet the speed of demand quickly fall out of relevance. And this trend is not going to slow down anytime soon.

Compounding the problem, Gatien points out, “Voice data is almost free, and we take this for granted. And as a result, the competition of these over-the-top players has actually had a massive negative impact on the top line of most telecommunications operators.”

Furthermore, by 2020 there will be an estimated 5.9 billion smartphones in the world. In terms of speed of connectivity, the next generation of 5G wireless connectivity will be 100 times faster than 4G. Anyone who grew up at the advent of the Internet and social media is well aware of the drastic speed of growth in the tech world. This will have an immense impact on the telcos.

Moving beyond communications

Along with the disruption of technologies, telcos must disrupt their own way of doing business. These companies can no longer provide basic communications services, including telephone access and Internet service. They must push beyond the boundaries of what was formerly defined as telco provisions. Gatien said, “The entire challenge of this industry is to stay relevant in this digital era, continue to connect and power everything that we do. But find ways to create sustainable revenue streams with the new domains, like the Internet of Things and faster connections.”

Take Big Data. Telcos are in a prime position to gather data from communications customers, such as data compiled from home security systems. In fact, telcos have been at the forefront of Big Data since its conception. However, being able to store, analyze, and utilize this data is outside of the comfort zone of most telcos. It shouldn’t be. And in order for these companies to continue to remain relevant in the digital area, they need to find an efficient tech approach to dealing with Big Data.

Keeping up the pace

Telcos must also differentiate their service offerings. Look at how T-Mobile has built an alternative image against established companies. Gatien explains, “It’s not because of the inherent services they provide, but because of stances they are taking: no contract, automatic upgrade of phones, making your life easier—and as a result, being able to, or potentially able to, accompany you into your digital lives.”

Fanzo agrees that this flexibility makes a big difference to millennials. In addition, many developed markets are already saturated, so providing friendly connected services, Gatien predicts, will be one of the most important drivers for growth and relevancy.

Telcos may also need to assess a two-tier system: commercial and residential. Telcos preparing for the future may look towards industries for differentiation. Healthcare, financial services, home security, entertainment: Each of these industries requires a personalized approach that reflects the hyperconnectivity of society.

The key to this is understanding customers better so services can be easily personalized to ensure a constant revenue flow for future investment. Then telcos can move from being simple communication providers to become value-added digital service providers, offering everything from digital home automation and smart life services to e-health care and IoT services.

A good example is cybersecurity, which is fast becoming one of the more pertinent areas of telco services. Without safe and secure connections, consumers’ data and personal information, as well as the livelihood and interests of corporations, is at risk. Along these same lines is cloud computing, which has become second nature with the success of cloud sharing services like Dropbox and Google Docs. Telcos must find ways to provide these niche services without degrading the quality of communications technology.

The question of regulation always comes up for telcos as bidding for the different spectrums, and associated regulations is unique for the industry. There are positives, such as loosening of regulations in the UK, which, according to Gatien, has led to an accelerated consolidation, particularly from the traditional incumbents getting into markets that they had previously missed. And then there are negatives, such as the requirements for net neutrality, where telcos invest billions in the network but other companies reap the benefits. How this ultimately will evolve will be another factor in the success of many telcos.

Connecting with a human audience

Amid all the talk about technologies, it’s easy to overlook the end user: the consumer. Connecting with consumers in this hyper-connected culture means the difference between leading the competition and lagging behind. Without customers, after all, the latest tech advances offer little.

So where can telcos make their mark? By personalizing their customer engagement while simultaneously excelling in the retail experience. While telcos once held their presence with little to no user input, the instant access to these companies—thanks to the Internet—has changed the game. The personal touch and visibility of the company is especially important to millennials. Fanzo hailed T-Mobile’s John Leger as a great example of access to executives, which in turn changed millennials’ mindset and subsequent purchasing decisions.

T-Mobile's John Leeger's ability to be social and engaged gave me confidence that they are pushing the envelope

Today’s companies must listen to the real world and the real-time requests of consumers, creating a seamless customer experience. This is vital to staying abreast of a changing culture, which is happening in real time. It is also the keystone for maintaining a digital core that will keep telcos in touch with the rest of the technologies and opportunities thrown their way.

To listen to this episode of Digital Industries for the telecommunications industry, co-produced by SAP and S.M.A.C. Talk Technology Podcast, click here.

Transforming into a truly digital business is so much more than just implementing new technology to meet the demands of a digital age. It’s more than keeping up with the deluge of transformation happening all around us. Digital transformation is about understanding how to harness these changes and incorporate them into your business strategy. It’s about driving agility, connectivity, analytics, and collaboration to run a Live Business. A digital core empowers you with real-time visibility into all mission critical business processes inside your four walls, and in your interactions with customers, suppliers, workforce, Big Data, and the Internet of Things.

For more on how SAP can help you drive your own digital transformation in the telecommunications industry, visit us online.


Judy Cubiss

About Judy Cubiss

Judy is director of content marketing for Finance at SAP. She has worked in the software industry for over 20 years in a variety of roles, including consulting, product management, solution management, and content marketing in both Europe and the United States.

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.

How Digital Transformation Is Rewriting Business Models

Ginger Shimp

Everybody knows someone who has a stack of 3½-inch floppies in a desk drawer “just in case we may need them someday.” While that might be amusing, the truth is that relatively few people are confident that they’re making satisfactory progress on their digital journey. The boundaries between the digital and physical worlds continue to blur — with profound implications for the way we do business. Virtually every industry and every enterprise feels the effects of this ongoing digital transformation, whether from its own initiative or due to pressure from competitors.

What is digital transformation? It’s the wholesale reimagining and reinvention of how businesses operate, enabled by today’s advanced technology. Businesses have always changed with the times, but the confluence of technologies such as mobile, cloud, social, and Big Data analytics has accelerated the pace at which today’s businesses are evolving — and the degree to which they transform the way they innovate, operate, and serve customers.

The process of digital transformation began decades ago. Think back to how word processing fundamentally changed the way we write, or how email transformed the way we communicate. However, the scale of transformation currently underway is drastically more significant, with dramatically higher stakes. For some businesses, digital transformation is a disruptive force that leaves them playing catch-up. For others, it opens to door to unparalleled opportunities.

Upending traditional business models

To understand how the businesses that embrace digital transformation can ultimately benefit, it helps to look at the changes in business models currently in process.

Some of the more prominent examples include:

  • A focus on outcome-based models — Open the door to business value to customers as determined by the outcome or impact on the customer’s business.
  • Expansion into new industries and markets — Extend the business’ reach virtually anywhere — beyond strictly defined customer demographics, physical locations, and traditional market segments.
  • Pervasive digitization of products and services — Accelerate the way products and services are conceived, designed, and delivered with no barriers between customers and the businesses that serve them.
  • Ecosystem competition — Create a more compelling value proposition in new markets through connections with other companies to enhance the value available to the customer.
  • Access a shared economy — Realize more value from underutilized sources by extending access to other business entities and customers — with the ability to access the resources of others.
  • Realize value from digital platforms — Monetize the inherent, previously untapped value of customer relationships to improve customer experiences, collaborate more effectively with partners, and drive ongoing innovation in products and services,

In other words, the time-tested assumptions about how to identify customers, develop and market products and services, and manage organizations may no longer apply. Every aspect of business operations — from forecasting demand to sourcing materials to recruiting and training staff to balancing the books — is subject to this wave of reinvention.

The question is not if, but when

These new models aren’t predictions of what could happen. They’re already realities for innovative, fast-moving companies across the globe. In this environment, playing the role of late adopter can put a business at a serious disadvantage. Ready or not, digital transformation is coming — and it’s coming fast.

Is your company ready for this sea of change in business models? At SAP, we’ve helped thousands of organizations embrace digital transformation — and turn the threat of disruption into new opportunities for innovation and growth. We’d relish the opportunity to do the same for you. Our Digital Readiness Assessment can help you see where you are in the journey and map out the next steps you’ll need to take.

Up next I’ll discuss the impact of digital transformation on processes and work. Until then, you can read more on how digital transformation is impacting your industry.


Ginger Shimp

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.

The Key To Gaining ROI From IoT

Daniel Kehrer

On the enterprise technology hype scale, the Internet of Things is a heavyweight champ. There’s only one problem. So far, this “transformative trend” – as Gartner calls it in the firm’s 2016 IoT Hype Cycle report – has remained largely that: Hype.

But that’s about to change. New enabling technologies – including Bluetooth 5, proximity awareness, and others – will speed the path to IoT value creation. The rollout of Bluetooth 5 in early 2017, for example, will quadruple Bluetooth range, double its speed and boost data broadcasting capacity by 800%.

These speed, range, and capacity improvements will open vast new IoT opportunities for companies to build a more accessible and interoperable IoT. This in turn will finally make hypothetical enterprise and industrial IoT use cases a reality.

According to a recent McKinsey Global Institute (MGI) report, the hype surrounding IoT may in fact understate its full potential. McKinsey predicts that if policymakers and businesses get it right, IoT’s linking of physical and digital worlds will generate between $4 trillion (their low estimate) and $11.1 trillion per year in economic value by 2025.

And the bulk of that value – nearly 70% of it, says McKinsey – will come from B2B applications such as construction and manufacturing where IoT technology helps optimize equipment placement and maintenance, improve safety and security, and much more.

Meanwhile, technology suppliers are ramping up IoT-related platforms to help enterprises design, implement, and operate solutions that fill the gap between the ability to collect data and the capacity to capture, analyze, and act on it.

The power of proximity-awareness technology

One of the most powerful tools in helping enterprise organizations gain ROI from IoT is proximity awareness. Smart proximity awareness technology will play a critical role in how enterprise organizations extract value from IoT or, alternatively, IoE – the Internet of Everything.

It’s also IoE because the value-creation chain includes more than just things. It involves people, data streams, locations, equipment, communication systems, and more, all connected to the Internet. Proximity-awareness technology brings these scattered pieces of IoT together into a cohesive, cyber-physical system that organizations can analyze and act on to solve problems, optimize time, and improve productivity. This is increasingly important as connected “things” gain autonomy and begin taking more actions on their own.

Proximity solutions enable organizations to gain greater order, efficiency, automation, and predictability from IoT. They solve for situations where people and things are dispersed haphazardly and sometimes unaccounted for, eliminating guesswork and costly inefficiencies. They enable organizations to see where things are, what’s happening with them, and how to make them more effective and productive.

Smart proximity awareness technology will also enable value creation from enterprise “wearables” – always on, connected computing displays worn on the body for easy, hands-free access to show contextually relevant information – as these devices replace bar code scanners and handheld GPS.

Proximity makes IoT work

Many companies already generate large amounts of data from IoT but only use a fraction of it. That’s because they focus mainly on detecting breakdowns or other anomalies, rather than envisioning new, value-building uses. By deploying smart proximity-awareness technology, companies can realize greater value from IoT by using it to predict and optimize a wide range of activities. As this happens, the old mindset of repair and replace becomes a new mindset of predict and prevent.

Enriching corporate data with proximity awareness pushes several things forward. Knowing where your people, inanimate assets, suppliers, supplies, and customers are – and when their joint movements are actionable – allows automated responses to specific conditions of convergence and divergence.

And by standardizing proximity services in an open platform, enterprises can gather mobile and IoT telemetry, track assets and people in motion, determine when any two or more of them are converging or diverging, and act by triggering prox­imity-aware messages or instructions to both people and things.

As the world becomes increasingly networked with nearly everything linked to everything else, production and supplier networks are expected to grow enormously, meaning manufacturers will need to coordinate more global suppliers. At the same time, boundaries that now separate individual factories and other facilities will be eliminated as IoT and prox­imity awareness connect multiple factories and the people who run them.

According to MGI, “The potential value that could be unlocked with IoT applications in factory settings could be as much as $3.7 trillion in 2025, or about one-third of all potential economic value. Cities are the next largest, with value of up to $1.7 trillion per year.”

Building flexible solutions at scale

But building IoT systems and solutions as vertical silos and operational islands inhibits the ability to gain strategic value. Smart proximity awareness based on a scalable and horizontal technology foundation lowers barriers and makes it easier to integrate all of the pieces into a single whole that is easy to operate, expand, and maintain.

Now is the time to consider the IoT business opportunities at hand, set a vision, establish a plan, and put smart proximity awareness to work as a strategic differentiator. As McKinsey points out, “Businesses that fail to invest in IoT capabilities, culture, and processes, as well as in technology, are likely to fall behind competitors that do.”


Daniel Kehrer

About Daniel Kehrer

Daniel Kehrer has 20+ years leadership and hands-on execution experience as a technology, content marketing and digital media entrepreneur and industry thought leader. He has built & scaled multi-channel and global marketing and content creation teams and engines for VC- & PE-backed tech companies leading to acquisitions totaling nearly $1 billion. He is currently Founder & CEO of BizBest Media Corp. and, working with select startup and growth-stage tech companies. He’s written for Forbes, Harvard Business Review, The New York Times and Digitalist Magazine, among many other publications, writes a syndicated weekly column, is the author of seven books and earned his MBA from UCLA Anderson.

Diving Deep Into Digital Experiences

Kai Goerlich


Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.

What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”

Download the executive brief Diving Deep Into Digital Experiences.

Read the full article Swimming in the Immersive Digital Experience.


Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu


Jenny Dearborn: Soft Skills Will Be Essential for Future Careers

Jenny Dearborn

The Japanese culture has always shown a special reverence for its elderly. That’s why, in 1963, the government began a tradition of giving a silver dish, called a sakazuki, to each citizen who reached the age of 100 by Keiro no Hi (Respect for the Elders Day), which is celebrated on the third Monday of each September.

That first year, there were 153 recipients, according to The Japan Times. By 2016, the number had swelled to more than 65,000, and the dishes cost the already cash-strapped government more than US$2 million, Business Insider reports. Despite the country’s continued devotion to its seniors, the article continues, the government felt obliged to downgrade the finish of the dishes to silver plating to save money.

What tends to get lost in discussions about automation taking over jobs and Millennials taking over the workplace is the impact of increased longevity. In the future, people will need to be in the workforce much longer than they are today. Half of the people born in Japan today, for example, are predicted to live to 107, making their ancestors seem fragile, according to Lynda Gratton and Andrew Scott, professors at the London Business School and authors of The 100-Year Life: Living and Working in an Age of Longevity.

The End of the Three-Stage Career

Assuming that advances in healthcare continue, future generations in wealthier societies could be looking at careers lasting 65 or more years, rather than at the roughly 40 years for today’s 70-year-olds, write Gratton and Scott. The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

It will be replaced by a new model in which people continually learn new skills and shed old ones. Consider that today’s most in-demand occupations and specialties did not exist 10 years ago, according to The Future of Jobs, a report from the World Economic Forum.

And the pace of change is only going to accelerate. Sixty-five percent of children entering primary school today will ultimately end up working in jobs that don’t yet exist, the report notes.

Our current educational systems are not equipped to cope with this degree of change. For example, roughly half of the subject knowledge acquired during the first year of a four-year technical degree, such as computer science, is outdated by the time students graduate, the report continues.

Skills That Transcend the Job Market

Instead of treating post-secondary education as a jumping-off point for a specific career path, we may see a switch to a shorter school career that focuses more on skills that transcend a constantly shifting job market. Today, some of these skills, such as complex problem solving and critical thinking, are taught mostly in the context of broader disciplines, such as math or the humanities.

Other competencies that will become critically important in the future are currently treated as if they come naturally or over time with maturity or experience. We receive little, if any, formal training, for example, in creativity and innovation, empathy, emotional intelligence, cross-cultural awareness, persuasion, active listening, and acceptance of change. (No wonder the self-help marketplace continues to thrive!)

The three-stage model of employment that dominates the global economy today—education, work, and retirement—will be blown out of the water.

These skills, which today are heaped together under the dismissive “soft” rubric, are going to harden up to become indispensable. They will become more important, thanks to artificial intelligence and machine learning, which will usher in an era of infinite information, rendering the concept of an expert in most of today’s job disciplines a quaint relic. As our ability to know more than those around us decreases, our need to be able to collaborate well (with both humans and machines) will help define our success in the future.

Individuals and organizations alike will have to learn how to become more flexible and ready to give up set-in-stone ideas about how businesses and careers are supposed to operate. Given the rapid advances in knowledge and attendant skills that the future will bring, we must be willing to say, repeatedly, that whatever we’ve learned to that point doesn’t apply anymore.

Careers will become more like life itself: a series of unpredictable, fluid experiences rather than a tightly scripted narrative. We need to think about the way forward and be more willing to accept change at the individual and organizational levels.

Rethink Employee Training

One way that organizations can help employees manage this shift is by rethinking training. Today, overworked and overwhelmed employees devote just 1% of their workweek to learning, according to a study by consultancy Bersin by Deloitte. Meanwhile, top business leaders such as Bill Gates and Nike founder Phil Knight spend about five hours a week reading, thinking, and experimenting, according to an article in Inc. magazine.

If organizations are to avoid high turnover costs in a world where the need for new skills is shifting constantly, they must give employees more time for learning and make training courses more relevant to the future needs of organizations and individuals, not just to their current needs.

The amount of learning required will vary by role. That’s why at SAP we’re creating learning personas for specific roles in the company and determining how many hours will be required for each. We’re also dividing up training hours into distinct topics:

  • Law: 10%. This is training required by law, such as training to prevent sexual harassment in the workplace.

  • Company: 20%. Company training includes internal policies and systems.

  • Business: 30%. Employees learn skills required for their current roles in their business units.

  • Future: 40%. This is internal, external, and employee-driven training to close critical skill gaps for jobs of the future.

In the future, we will always need to learn, grow, read, seek out knowledge and truth, and better ourselves with new skills. With the support of employers and educators, we will transform our hardwired fear of change into excitement for change.

We must be able to say to ourselves, “I’m excited to learn something new that I never thought I could do or that never seemed possible before.” D!