• Telia has been rationalizing its IT systems
• It is dealing with fewer partners, using fewer systems
• Operator has four strategic IT suppliers
• ServiceNow playing a greater role as an important application vendor

Mindful of the multiple pressures that traditional telecom operators are coming under as the dynamics impacting the communications networking and services sectors evolve at an increasing pace, Nordic operator Telia is revamping and restructuring its assets, operations and processes to reduce complexity, become more streamlined and stand a greater chance of growth and survival in the cloud-oriented 5G era: Like many telcos, a key area of transformation focus for Telia is its digital asset base and its IT supplier relationships.

Under President and CEO Allison Kirkby, who took on the role in May 2020, Telia has sold operating units and assets (Telia Carrier, Turkcell stake, towers) to focus on the Nordic and Baltic markets and introduced, as part of its efforts to be a Better Telia, four strategic pillars – Connecting Everyone, Inspiring our Customers, Delivering Sustainably and Transforming to Digital. 

While all four deserve a closer look (the Sustainability effort has been very notable in recent months), the Transforming to Digital approach is worthy of some attention just now as, at its core, is an approach that has been talked about by telcos for years, proven very tough to implement by all, but which is now more important than ever as operators increasingly adopt a multi-cloud approach to day-to-day business – IT transformation (with a hefty emphasis on rationalization). This is linked very closely to Telia’s plans to drastically reduce the number of services it offers across its multiple markets (it had thousands, it is cutting the number by at least 50%), while also developing a platform that will enable it to efficiently take advantage of the service development and delivery potential of 5G Standalone (for example, network slicing). 

Telia provided an update on its IT transformation efforts when it reported its second quarter financials, including a slight increase in revenues to SEK21.9 billion ($2.53 billion), last week. It noted: 

“This quarter saw good progress also in our ‘Transform to Digital’ efforts aimed at transforming customer experience, simplifying the product portfolio, automating processes, increasing usage of data analytics, and removing legacy systems. An extension of our partnership with ServiceNow will further increase the usage of data and analytics, driving acceleration towards becoming a truly customer centric and automated service provider. So far in 2021, we have decommissioned more than 75 legacy systems which resulted in lower IT costs, and we have progressed on our radical reduction of strategic IT suppliers - going from 24 down to 4 – which is expected to make a significant contribution to the overall cost reduction ambition we have until 2025.”

And on the operator’s conference call with investors, Kirkby noted that the four strategic IT suppliers are Accenture, Capgemini, TCS and TietoEVRY. “We are already benefiting from the improved commercial terms and new ways of working as of the month of June,” noted the CEO, adding that during the next five years, this approach is due to reduce operating and capital costs combined by about SEK750 million ($87 million), while during the second quarter the operator stopped using 75 legacy IT systems, a move that resulted in additional IT savings of about SEK45 million ($5.2 million). 

As Telia sunsets its legacy systems across the group, it wants to increase the use of common products that are used across its multiple operations and develop systems that comply with TM Forum specifications such as Open APIs and the Open Digital Architecture (ODA). One of the companies benefitting from this approach is software-as-a-service (SaaS) workflow automation specialist ServiceNow, which was initially chosen to simplify day-to-day operations related to network and systems operations but which now also handles customer engagement and experience processes, replacing 25 legacy systems with a central portal for Telia support staff. (It’s worth noting that ServiceNow is, along with Telia, a TM Forum ODA Manifesto signatory). 

Now that relationship has been extended as Telia seeks to make even better use of the data and analytics capabilities it has at its fingertips. “We reached a strategic innovation partnership with software provider ServiceNow, which will fuel simplification and automation of key parts of our operations and [be] a key enabler for our orchestrator value proposition to B2B customers,” noted Kirkby during the Q2 earnings call. 

This is part of the efforts identified in January this year when Telia provided an update on its strategy and Rainer Deutschmann, Group Chief Operating Officer, talked about the “implementation of what we call a pervasive data driven organization, where we can take decisions based on data that are right and that are real time.”

That in turn drives automation. “We are converging towards harmonized processes for the customer facing side, as well as for the internal back-office side, which then again leads to a lot better IT support and less cost… And then we are looking at… Intelligent Automation, which is based on the analytics and the data. So, we can have personal recommendations to the customer, or we can have specific process variants depending upon what is the need in this very moment,” noted Deutschmann, who added that the operator had established a “centre of excellence for automation.”

Telia is making rapid progress and talking and behaving like a digital telco, which will help to provide its partners and suppliers with a good reference account.

That’s certainly the case for ServiceNow, which identified telecoms (alongside financial services and healthcare) as a key area of focus for business growth and for which it has been developing industry-specific workflows (based on existing R&D work with telcos such as BT), as well as striking partnerships with the likes of EXFO, Atrinet and Accenture, which is its “strategic go-to-market partner” for new telecoms solutions. 

ServiceNow also namechecks AT&T, NTT, Vodafone and Tata Communications as some of the other network operators it’s working with, as well as BT and Telia, so it’s already well entrenched in the telecoms sector: With process automation becoming increasingly important for cost as well as operational efficiencies, expect ServiceNow to crop up more and more in the coming years as cloud-oriented software platform players battle to deliver what is essentially the core orchestration system of a telco’s back office and customer-facing operations. 

- Ray Le Maistre, Editorial Director, TelecomTV