Digital Transformation

An opportunity for telecommunication companies to maintain their global competitiveness

In the light of the global change in customer expectations, disruption of the connectivity value chain, new rivals and declining top-line revenues in the telecommunications industry, the BT Group must act today to maintain its competitive advantage. How can BT re-think its digital transformation through digital innovation? In the following I assessed the state of BT’s digital transformation through a digital maturity model adapted to the context and challenges of telecommunication companies. I adapted the Deloitte Digital Maturity Model (2018) to cover the crucial business areas that are impacted and impact telecommunication companies’ digital transformation — ecosystem and innovation. Therefore, the project analysed the maturity across the five most important dimensions: strategy, customer, culture, operations, and technology.

I analysed five gaps in digital transformation at BT through expert interviews and secondary research. Based on these gaps, I derived recommendations on how to bridge the gap in digital maturity. Finally, I synthesized the key learnings of the most important gap in digital innovation — the business ecosystems — into a recommendation on how to further develop its Smart City ecosystem.

Five gaps in digital transformation at BT

Overall, BT is making progress along the digital transformation journey but has still gaps in digital maturity across the five dimensions customer, strategy, technology, operations, and organisation and culture.

Customer

There are three main gaps identified when it comes to customer engagement: there is currently a transition to use digital tools to get to customers, but this is still a long work in progress. Likewise, current network of partners and customer base of BT is focused on retail consumers from the Telecom business, not much into other area of businesses that BT already has, such as IoT for example.

Strategy

Regarding BT’s maturity to implement a digital strategy, I identified three gaps — ecosystems, stakeholder and strategic management. First, due to the changing competitive nature to competition between business ecosystems, it is vital to develop BT’s data exchange further. Second, BT has a shortage in hiring, developing, and retaining AI and data talent because there is no coherent approach across the Group. Third, the strategic management to implement the digital strategy is hampered by a fragmented, not yet agile organization and the need for a cultural change.

Technology

BT possesses great technology and application to the solution. It works with many clients in applying their technology and create product for each of the customer. In terms of data analytics, use of AI require high levels of data analysis and the experience and know-how kept in the firm. The network is the biggest strength for BT which they have the collaboration with university. To foresee development in the BT business, sharing the technology to outsiders would be the key.

Operations

BT has been progressively implementing AI, Robotic Process Automation (RPA), and advanced analytics in its operation processes. The data collection capabilities have been vastly improved. However, the value can be unlocked once the data collection leads to real time predictive analytics. BT needs to leverage AI to optimize its network as well as customer operations.

Culture and Organisation

BT currently has a commendable digital structure, as it maintains a futuristic approach in reskilling and upskilling employees, as well as a tech-enabled feedback loop to ensure equal access to information and learning. However, I noted that there are opportunities to improve collaboration across BT’s functions, as most teams work in silos. Similarly, BT has been limited in attracting the best tech talents across the globe, it is therefore necessary to encourage openness to ecosystems and invest in modern digital platforms to attract the best talents and optimise enterprise skills across the firm.

Seven recommendations to bridge gaps in digital maturity

To re-think digital transformation, the BT Group, the Digital business unit, and Applied Research (AR) should further set up a data ecosystem and talent ecosystem, agile organisation and cultural change management, and AI-enabled optimisation in network and customer processes.

Customer

To overcome the Customer gaps, mostly related to Customer Engagement, we recommend three solutions: the expansion of digital tools for customer engagements, facilitating Open Innovation spaces with customers to co-create new product ideas, and expand the B2B business through partnerships and more ecosystem-based solutions.

Strategy

To overcome BT’s gaps in strategic management — specifically in the ecosystem management, stakeholder management and strategic management –, I recommend three solutions: further develop the data ecosystem and build a talent ecosystem, further transform AR and the Digital unit into an agile organisation and enable them as cultural change manager for the Group.

First, the nature of competition is changing. Competition between enterprises is transforming into a competition between business ecosystems. To be ready to compete in this changing environment, BT should create a win for stakeholders through the development of its data exchange into a free-of-charge horizontal, distributed data ecosystem. Its success is determined by the BT- and government-enforcement to attract digital giants to participate as an orchestrator.

Second, to compensate the gaps in hiring, developing, and retaining AI and data talent, BT should further develop a global but locally-branded talent ecosystem. To implement the new talent ecosystem, a global technology hub in a Silicon Valley-similar city should be further developed in which AR plays a lead role in talent attraction. To upskill and reskill AI and data talent and to empower and educate users and customers, an open and accessible Apple store-similar Future of Work education center should be built in an inner-city location.

Third, to better implement the digital strategy, BT should enable AR and the Digital unit to drive agile transformation and cultural change across the Group. AR should act as an agile-transformed, innovation poster child, to top-down cascade digitisation with the CDO in the Group. AR should use its formal and informal networks, shared processes and culture of openness to drive change in the organisation as cultural change manager. In addition, AR should develop into a bottom-up driver and enabler for digitization as “start-up” within the Group.

Technology

First, to share the knowledge and technology within BT to outsider, AI Open Innovation Hub might be a solution. The Hub would make BT explain and share the AI patent technologies and other technologies that BT has to outsiders and host events like hackathons.

Second, BT has been offering solutions to customer requiring data analytics. This experience and capabilities is unique and is an important transferable know-how for clients. BT may offer AI data analytics advisory service with the AI technology. This may find a hidden needs which can be leveraged to further service.

Operations

For the operations, the digital maturity was benchmarked against other leading telecom players leveraging AI and other emerging applications. My analysis highlighted the importance of AI and Robotic Process Automation for network efficiency optimization. I proposed four key recommendations for operational efficiency.

First, predictive analytics and self-optimizing networks for predictive maintenance. Second, Low-code and devops for network simulation, leading to faster and easier implementation. Third, AI chatbots for one-on-one customer interactions. Fourth, Robotic Process Automation for streamlining and automating complex processes.

Culture and Organisation

First, BT should create cross-departmental teams to work on digital projects in order to develop a collaborative digital culture across departments. Second, BT’s board should lead by example by using data to drive decision-making and including firm-wide use of digital platforms in performance assessment. Third, BT should create decentralized innovation labs to enable internal partnerships and collaboration with external networks, encouraging usage and enhancement of digital ecosystems. Fourth, it is necessary for BT to upskill and reskill current employees with relevant digital skills to prep them for the sustained use of digital platforms and automated processes. Additionally, BT should invest in emerging technology and enable firm-wide adoption of digital processes in order to attract futuristic and innovative talent.

Ecosystem

Regarding the ecosystem-based business opportunities, BT has already done relevant work in initiatives such as Transportation, Retail, Utilities, Logistics and Cities. For the purpose of this project, I focus on Smart Cities initiatives and provide three main recommendations.

First, BT should scale up the smart cities solutions that have already been validated as business cases e.g., smart lightning, smart parking, enhanced transport solutions. I suggest to expand similar initiatives in new locations that meet two criteria: Mid-size cities to avoid the complexity of big cities but big enough to scale the business cases. And cities where local authorities have greater autonomy over transport policy, health and education.

Second, BT should further develop strategic partnerships with private and public institutions to gain presence in new projects. BT can do this by tapping into its unique offers: IoT, Data Analytics, Trust and Security. It could also foster a wider adoption of the Hypercat specifications.

Finally, in terms of the opportunities in the digital infrastructure, BT could have a greater role in the National Digital Twins Programme. Incorporating current unique solutions such as Machine to Machine, Intelligent Assets and Intelligent Data Analytics would give BT an edge to adopt the National Digital Twins approach in is IoT Data Hub models.

Conclusion

These actionable insights are set out to influence business leaders in BT Group, the Digital business unit, and Applied Research to create a win for all stakeholders in the telecommunications ecosystem. By analysing BT’s gaps in digital transformation and providing recommendations on how transform digitally, I helped BT to maintain its global competitiveness.

To sum up, I believe that BT is in a great position to transition effectively in its digital maturity journey. Based on the gaps identified, I recommend that BT identify strategic management gaps relating to agile organisation and change, data and talent management, and implement operational strategies to fill these gaps. BT also needs to scale up its current emerging technology solutions such as its smart cities solutions, and develop strategic partnerships cross-functionally and externally, to drive the change needed in its digital transformation journey.

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