Communications Service Providers (CSPs) have high expectations of the value partner ecosystems will deliver to their businesses, according to BearingPoint.
However, CSPs are yet to embark on the execution of ecosystem strategies, frustrated primarily by a series of technological challenges, said the independent management and technology consultancy firm.
BearingPoint's findings from a study into partner ecosystems in the telco industry reveals:
- 50% of CSPs anticipate a 16%+ revenue bump in just two years
- Over half (51%) of CSPs expect ecosystems to improve customer experience
- However, 31% of CSPs are still analyzing their options, and 14% are at the start of their journey
“Revenue, innovation, competitive positioning, customer experience and more. CSP expectations of the step change in business performance from adding partner ecosystems are very high. Our research also shows that companies adopting digital platform-based business models grow at twice the rate of those that don’t, simply because this allows them to generate value from their partner ecosystems. Considering that fact, perhaps partner ecosystems are the closest thing to a ‘silver bullet’ we’ve seen in telco in years,” says Angus Ward, CEO, Digital Platform Solutions at BearingPoint.
Progress report: telco lags on ecosystem execution
Despite their importance, CSPs are significantly behind in implementing the new business models and digital offerings based on partner ecosystems seen as vital to future success. Only 26% of CSPs have embarked on execution versus an average of 34% across industries surveyed. 27% of CSPs are about to embark on execution, 31% are analysing their options and 14% are at the very start of their journey. 2% have not even considered business model innovation and the development of new digital offerings.
“That a third of CSPs appear ‘stuck’ in the analysis phase is concerning. It reflects how much CSPs rely still are on rapidly commoditising products rather than proactively moving to differentiate to win new customers and protect revenues and profits,” says Henri Tcheng, Global Leader Consumer Industries at BearingPoint. “It’s important they begin to develop their ecosystem by putting the right strategy in place. Crucially, this should complement business objectives, identify appropriate partners and go-to-market offerings, and move to execution quickly, if the benefits they expect are to be realised.”
Ecosystem inhibitors: tech challenges loom large
Three of the top four challenges facing CSPs in curating ecosystems are technological in nature, asking deeper questions on CSPs’ capacity to deliver the right technology, skills and business agility:
- Having the right technology in place to manage monetisation across the partner ecosystem (55%)
- Overcoming a complex IT environment that cannot support a minimum viable product or fail fast concept (51%)
- Ability to manage ecosystem partner relationships (49%)
- Having the right technology and digital business platform to manage the partner ecosystem (48%)
“While business benefits drive the appeal of digital platform-based business models, technology challenges are frustrating CSP attempts to execute – be it making sure that partners get paid, creating agile environments for experimentation or simply providing a platform to bring together partners to create new services and exchange data and ideas,” continues Henri Tcheng.
“Ecosystem expectations are high but execution is only commencing. Without a shift to new underlying digital business platform technologies that are designed to facilitate partner ecosystem-based innovation and more sophisticated offers, CSP efforts to introduce new business models will surely fail,” concludes Angus Ward. “It’s time to stop talking about the potential of the ecosystem and start realising the benefits.”