Managed Transformation: The Low-Risk, High-Reward Alternative

“Transform and Survive – Or Die”

After years of talking about the business and operational implications of serving a more connected world, service providers are finally starting to switch gears and move to more specific plans of action, spurred by declines in traditional revenue sources, rising customer demands, and fast-growing competition from non-traditional players such as Google, Facebook, and Apple.

As the pace of change accelerates, very few of these providers can afford to put off the substantial B/OSS improvements and capability development required to enable new and innovative business models. Disparate and legacy systems, along with inefficient business processes, are hurting both the top and bottom lines.

As a result, many service providers are planning to make significant changes or undergo a fundamental transformation over the next 12-18 months (according to STL Partners findings).

Managed Service Flow

Don’t Follow the Herd

Traditionally, large service providers have tried to manage thetransformation process themselves, using a variety of vendors to provide specific systems, applications, and services to support the overall change. But the costs and risks involved could cause even the most aggressive executives to hold back from getting started.

But rather than going it alone, they should consider transforming under a managed services model, which provides a more affordable, less risky, and ultimately more effective alternative.

With “managed transformation,” a strategic partner takes end-to- end accountability both for transforming critical B/OSS functions and capabilities, and for managing and optimizing them on an ongoing basis to ensure substantial and sustained business benefits.

Under this arrangement, the partner has tremendous financial incentives to ensure that the subsequent transformation creates an efficient, manageable and affordable new approach since it maintains accountability for ongoing results.

 

One Throat to Choke

 

Of course, the strategic partner may not provide every single product and service within a transformation program, but, most importantly, the partner will be fully accountable (through well defined service level commitments) for ensuring that the transformation and ongoing operations are in full compliance with service provider plans and requirements.

By assuming management and accountability of legacy and transformed operations, the partner gains much deeper insight into the business issues and processes, pain points, gaps, and requirements for change.   As a result, the transformed systems and processes are more closely aligned with enabling business outcomes, not simply meeting IT performance targets.

From “Whether” to “How”

As the pace of change continues to accelerate, service providers are less and less able to put off transformation. How to organize and manage such a transformation is fast becoming a more important question for executives than whether to attempt one at all.

As discovered by MetroPCS, under a managed transformation model, service providers can gain greater financial flexibility, lower risk, and stronger accountability for results – not to mention a compelling way forward in the race for competitive advantage.

 

What do you think – should service providers stick with a traditional transformation approach and cross their fingers they won’t exceed their budget and timeline?  Or extend more accountability and “skin-in-the-game” to their strategic partners through a managed transformation model?

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