New Oracle Communications Report Released: ‘Rethinking IT Strategy…Can It Enable a Step Change in Communication Service Provider Performance?’
PwC-led Research Shows Communications Service Providers Must Make Smarter Investments in “Faster, Better, Cost-Effective” IT to Achieve Business Agility Required to Compete Effectively
TeleManagement Forum, Dublin, Ireland – May 23, 2011
Research released today by Oracle Communications and conducted by PwC, has found Communications Service Providers (CSPs) have a clear opportunity to improve IT efficiency, with many already planning important steps within the next 18 months to deliver the agility their businesses need to thrive in a competitive industry.
At the heart of improved business agility is the use of fewer bespoke applications which carry a higher total cost of ownership and bring considerable budget overruns, management overhead and time delays.
In terms of aligning IT with the business priorities, CIOs said improving customer experience is the top driver for IT strategy in the communications industry.
A smarter use of customer relationship management (CRM) applications is a focus for system replacement or upgrade, reflecting this prioritisation of user experience.
Portals and improved content are also a greater focus for CSPs looking to service and monetise a consumer hunger for rich media and social networking on mobile devices
Risk, lack of budget and complexity of existing systems are the greatest barriers to effective IT strategy implementation.
CIOs are planning a move towards more standardized, off-the-shelf applications as well as a more strategic use of outsourcing in order to simplify their in-house IT, bridge existing skills divides, reduce operating costs, mitigate risk and improve business efficiency.
The report, entitled ‘Rethinking IT strategy…can it enable a step change in Communication Service Provider performance?’ is based on research, conducted by PwC who interviewed CIOs or C-level executives from 30 European CSPs. The report can be accessed here.
Key Findings Include:
67% of bespoke applications are delivered with a “substantial” budget overrun (74% have some level of budget overrun)
52% of commercial-off-the-shelf applications (COTS) are delivered under budget
60% of CIOs currently spend more than half of their opex budget on ‘maintenance’
95% of CIOs believe they will increase their use of COTS over the next 18 months
40% said IT refresh or upgrade is also in the top three while 36% cited reducing operating expenditure.
Dan Ford, VP Product Marketing, Oracle Communications, said: “CSPs have a real window of opportunity right now to grow revenue through improved customer service and new content offerings. That must be where they focus their attention and their budgets. But first, they must stop over-investing in bespoke applications and migrate their operations to industry-standards based, off-the-shelf applications.”
David Russell, UK Telecommunications Leader, PwC, said: “CSPs are inherently complex, with overly complicated IT systems and infrastructure supporting overly complicated business processes and products. It’s not easy to get the balance right but this research suggests there are some clear steps many CIOs are taking towards improved agility and a smarter use of IT. The next 18 months look set to usher in real change with a clear intention among CIOs to increase their IT budget allocation for off-the-shelf applications and really build out a more compelling offering around portals and content. The intention of many now is clearly to heighten efficiency and agility through operational simplification, while ensuring they keep customer experience as their priority.”
PwC was commissioned by Oracle Communications to survey a mix of 30 communications CIOs, CTOs and senior IT executives in ten countries within the European cluster, in the first quarter of 2011, to understand their IT agendas in particular with respect to COTS applications in the short (18 months) to mid-term ( three years).
The survey consisted of 26 questions focused on the respondents’ current IT environment and associated budgets, key drivers and challenges for change and future IT strategies specific to COTS.
Forty-five percent of respondents provided both mobile and fixed-line services. The rest of the respondents’ organisations were split between either a mobile provider only (32%) or a fixed-line provider only (23%).
More than 50% of respondents had annual revenues of greater than $5 billion US, including 18% with revenues greater than $20 billion US.
About Oracle Communications
Only Oracle’s software and systems span the communications industry technology landscape — from carrier-grade servers, storage and IT infrastructure, to mission-critical business and operational support systems and service delivery platforms; from business intelligence applications and retail point-of-sale solutions to the Java platform running on more than two billion mobile and handheld devices. Oracle helps 100 of the world's top 100 service providers innovate and exploit new business models, build strong, profitable customer relationships, and streamline operations. For more information, visit http://www.oracle.com/us/industries/communications/index.html
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