The best strategies leverage both good ideas and good timing. While traditional telecom services are facing challenges (which by now are traditional, too), new offerings, in new areas, are showing promise. Keeping the momentum going (and growing) means investing in IT that can spur and support innovation—and doing it now.
Even if the idea and the timing look right, what are the specifics? Where should telcos focus their investments? Can they buck the usual trend of their IT operating expenses increasing along with their capital expenditures? Can increasingly popular levers—such as outsourcing and commercial off-the-shelf software—be leveraged more efficiently? Will moving to less complex solutions and operating models always bring cost advantages? These are some of the key questions addressed in TeBIT 2014, a telco IT benchmarking study jointly developed in 2010 and conducted annually by The Global IT Association for Telecommunications (ETIS) and The Boston Consulting Group.
The report that follows highlights the insights unveiled by this year’s TeBIT study. The idea is not only to identify the IT challenges telcos face, but how they can address them. Just as importantly, the report examines how IT can best be leveraged to help telcos seize the opportunities today’s market presents. As it did last year, the study analyzes how telcos are steering their top capital-expenditure initiatives, how levers like outsourcing and commercial off-the-shelf software are being implemented, and how, perhaps, those levers could be optimized still. New this year is a close look at the relationship between complexity and costs. While one might think less complexity means lower costs, the link is not always clear cut.
TeBIT 2014 devotes much of its analysis to differentiation, looking at what telco IT departments are doing—and can do—to help set operators apart. Perhaps that is fitting, as the TeBIT study itself is a unique benchmark—created by the telcos for the telcos, and coordinated by an independent nonprofit organization with no financial interest in the outcome. All of this year’s participants have taken part in previous surveys. By participating in this benchmark, operators get an unbiased, in-depth, telecom-specific look at the IT environment of their organization.
There has been a tradition among the TeBIT participants to openly share all data (on a company level) in order to encourage discussion and exchange of knowledge. This is the distinct advantage of TeBIT—that is, knowing the companies you benchmark against. To make the sharing of information even easier, this year’s questionnaire was significantly shortened from previous versions, so as to get to the core data while greatly reducing the collection effort for participants. While this executive report is publicly available, companies that take part in the benchmarking can access the full results, including a comprehensive publication containing rich participant data as well as further trend analysis and data correlation. Moreover, participants are eligible for a one-on-one discussion of their company-specific results with the core TeBIT benchmarking team.
This year’s findings show IT units continuing their shift in focus from cost reduction to innovation—a strategy that increasingly looks like the right idea at the right time. But the data also suggests that telcos might, in effect, be able to have their cake and eat it, too: reducing operating expenses even as they increase capital expenditures. That would mark a break from past cost cycles, but perhaps that is only fitting, too. For telcos, future growth will mean breaking from older ideas on how, and where, to build business. ETIS and BCG believe that benchmarking and open exchange on past experience can help them do that—successfully, efficiently, and soon.
ETIS Managing Director
BCG Partner and Managing Director