Exploiting RPA to Cultivate Operational Innovation
Abid Mustafa
Director of Strategy and Customer Experience

Professional Background: Abid Mustafa is a seasoned ICT professional with over 24 years’ experience in Digital Transformation, IT, Operations, Project Management, Strategy, and Customer Experience, with special expertise in RPA, robotics and AI. He is well versed in different aspects of the telecommunication industry and has worked for a number of operators in Europe and the MENA region. Mustafa is also the author of In the Age of Turbulence: How to make Executive PMOs Successful (ISBN: 1482740621), which is available both in paperback and Kindle format.

Education: BSc, Electronic Engineering, King’s College, London University

By Abid Mustafa, Director of Strategy and Customer Experience, Etisalat

It’s no exaggeration to say that digital disruption is completely reshaping the competitive landscape of the telecommunications industry. In the near term, new entrants such as WhatsApp, Viber, and other chat providers are cannibalizing voice and data revenues for operators. Cloud service providers like Microsoft, Amazon, and Oracle are further squeezing revenues in both the enterprise and consumer markets. Medium to long term challenges include chat platforms, global Wi-Fi, and 5G digitally enabled ecosystems.

The digital revolution is disrupting the industry at every level and is forcing telecom operators to adapt or die. To successfully adapt, operators need to adopt new approaches and strategies that will help them navigate this unfamiliar environment.

A tale of trying times

This is not the first time that operators have struggled to devise strategies to address disruptions. A few decades ago, telecom operators reacted to cable operators providing media content over their networks by dabbling themselves in the media content business. What started out as grandiose plans to compete, however, ended in strategic failure. Operators had to settle for repackaging content, adding little to their overall revenue

The emergence of system integrators represented similar challenges. Telecom operators created professional services departments to compete with system integrators in delivering solutions to enterprise customers on top of connectivity. But unable to compete effectively with SIs in R&D, innovation, and skills, operators resorted to offering simple solutions combined with connectivity in the unrealized strategic hope that a one-stop shop model would entice customers.

In both cases, operators were unable to develop strategies that would allow them to take advantage of the opportunities in their industries. One of the principal reasons for such failures, of course, has been the array of regulatory restrictions that from the outset have made it difficult for operators to harness value around connectivity while making it easier for new rivals to exploit value higher up the value chain. The advent of the smart-phone and 3G exacerbated this difference, enabling non-telecommunication companies like Whatsapp to capture value on an enormous scale.

The failure of “strategic culture”

The connectivity-centric business model has produced another casualty—strategic culture. A preoccupation with the exploitation of new technologies to enhance network coverage and performance dominates the discipline of strategy formulation. Operators tend to ignore the need for strategic rethinking, as value creation and value capture are routinely confined to the connectivity domain. What strategic thinking does occur, it is often limited to copying ideas from competitors or purchasing the ideas of management consultants.

A weak strategic culture also affects strategy execution. It is common to find projects disconnected from strategy that create a huge drain on precious resources. Those projects that complement strategy do not deliver promised benefits, and operators struggle to capture value. The overall impact is that the gatekeepers of strategic culture—the C-suite—is ill prepared to handle any sort of disruption, and strategy is reduced to financial planning only.

This legacy of a weak strategic culture means that operators often struggle to craft a robust strategic response to digital disruption.  For some operators, digital strategy simply means adopting existing solutions that happen to involve digital technologies—cloud computing, big data and analytics, machine-to-machine communications, robotics, artificial intelligence—without thinking through the strategic rationale. Copying without innovation does not lead to differentiation nor does it boost sales. Think of IBM in the 1980s: it discovered that modelling OS/2 on MS-DOS wasn’t enough to compete with Microsoft.

Pressure to respond in some way to industry trends — becoming digital simply because other operators are doing so — can result in a flurry of “strategic” activity that goes nowhere. Another common and misguided response to external pressures is the adoption of separate strategies for the legacy business and the digital business, which is a recipe for failure. Focus is crucial to success and a good digital strategy requires the operator to undertake a deep assessment of where it can realistically compete, what resources it needs to create and capture value, and when to strike. 

Furthermore, some operators subscribe to the notion that a good digital strategy will deliver instantaneous success. This is rarely the case. Steve jobs waited 30 years before he struck it right with the iPhone.

An era of multiple disruptions

In today’s interconnected world, strategy formulation by operators to address solely digital disruption is inadequate. This is because the appearance of digital technology is not the only disruption they face.

There is political disruption. Think of Brexit, America’s unpredictability in international affairs, the emergence of multipolar powers like Russia and China, the erosion of state sovereignty through the rise of non-state actors (such as MNCs, NGOs, IGOs, and terrorist groups), and the global awakening of citizens. The last of these presents an interesting opportunity for operators, who might take advantage of accelerators to produce social media aps that could facilitate dialogue between citizens and civic society.

There is also economic disruption. Unconventional economic tools — such as quantitative easing, negative interest rates, and government interventions in the “free market” — dominate the landscape, and no one is sure about what will come next.  A better understanding of these factors could assist operators with a global footprint to insulate their operating profits in countries that are susceptible to devaluation or strengthening of the dollar.

Add to the above the disruptions created around the world by climate change and extreme climatic conditions. Operators need to think about how they can protect their business from freak weather conditions, possibly through sophisticated predictive weather models.

The age of disruption convergence necessitates a new type of strategic thinking that relies on a nimble strategy process, one that is continuously fed with different inputs to enable operators to proactively seize opportunities, mitigate threats, and revise business models on the fly. Operators also need to eschew the industry’s traditional siloed approach and forge partnerships with other industries, governments and civic society. The need to involve multiple stakeholders requires operators to draw on multiple strategy modes—what strategy expert Henry Mintzberg calls positional, learning, planning, political, and cultural strategies—to exploit these new developments.

The importance of generalists

The Industrial Revolution created a need for specialists who became experts in certain narrowly defined skills. Today’s digital revolution, driven by disruption convergence, requires generalists, employees well versed in interdisciplinary subjects such as psychology economics, politics, business, sociology, and diplomacy. The role of specialists will not diminish, but expect to see more demand for generalists, able to strategically assess and respond to the technical and other disruptions companies face. In fact, generalists may turn out to be the most valuable asset for operators as they work to survive and thrive in the digital age.

The Takeaways

Telecommunications operators need to improve on their spotty record in responding to disruptions in their competitive landscape, from the emergence of system integrators to the delivery of media content by cable operators over telecommunications networks.

Disruptions currently facing the industry result in part from digital technologies that have opened the door to new competitors. But operators should not overlook other disruptive forces—political, economic, even climatic—that create both threats and opportunities.

This “disruption convergence” requires an entirely new and flexible approach to strategy setting, one that enables operators to rapidly revise business models, work with a variety of partners, and draw on multiple strategy modes.