Covid-19 driving transformation projects in UK telecoms sector

• New report shows effects of pandemic behind fundamental operational rethinks 
• Cost reductions welcome but not the primary reason for change
• Permanently increased efficiency the main goal
• Outsourcing and partnerships the key

A new research report from the Yorkshire, England- headquartered business-to-business data processing company, Parseq, shows that well over three-quarters of senior UK telecoms executives have plans to push transformation projects through their businesses during 2021. Spurring the initiatives are factors such as the availability of, and need for, new technologies and organisational change as the world emerges from the shadows of the global Covid-19 pandemic that has destroyed and disrupted so much economic activity and cost so many lives and jobs over the course of this benighted year.

Indications are that, in some sectors, it will take several years before levels of demand and productivity return to what they were back in 2019 in the pre-Covid world, and it will perhaps take even longer for them to be exceeded. Recovery will be no overnight process and neither will (or is) transformation. Supply chains have been disrupted (and Brexit will disrupt them further) while unprecedented trade and travel restrictions have been imposed and working from home has become the new normal. The ramifications are considerable.

Unemployment is expected to rise markedly in the New Year and to be very high by late Spring. Meanwhile consumer confidence has collapsed in a time of reduced family income and career prospects. However, sensible, forward-looking businesses are using the vicissitudes and lessons of the pandemic experiences either to introduce new transformation plans or accelerate those that are already in place. Cost reduction is of course a major factor behind the drive to transform but it is neither the sole reason nor even the primary motivation.

It seems that the introduction of input and process reforms to optimise operational efficiencies and so boost and maintain greater productivity are the order of the new day as enterprises seek to make themselves scalable and resilient. The effects of Covid-19  came as a great shock not only to individual humans and social systems but also to economic systems as well Interestingly, but perhaps not surprisingly in light of the pandemic, the Parseq research shows that comms businesses contemplating transformation see outsourcing as an effective way to make and maintain efficiency savings. Survey respondents said they expect 30 per cent savings to be feasible, attainable and permanent.

Parseq's Big Business Efficiency Report indicates that companies intent on increasing efficiencies are interested, in roughly equal proportions, in doing so in production (50 per cent), front office (49 per cent) and back office (46 per cent) environments. Notably however, 57 per cent prioritised front office services over the 26 per cent that think the back office transformation should come first. This, surely, is prima facie evidence that customer facing services and processes will have even greater focus in the post-pandemic world. That poses some problems for enterprises that now have staff working permanently from home rather than in a company office especially as online sales have rocketed by between 40 per cent and 50 per cent since March this year when Covid-19 put a stranglehold on things.

Remarkably, almost a quarter of respondents to the Parseq survey (24 per cent) admitted that a lack of support of a third party in the form of a trusted and experienced outsourcing partner could greatly help a company to overcome obstacles to improved efficiency whilst leaving the business almost completely free to devote itself to its core skills and competencies.  

That's because outsourcing programmes have specific measurable qualitative and/or quantitative objectives which usually include the costs involved for the work to be done, accuracy and customer satisfaction.It also means return on investment can be calculated pretty accurately before a contract is signed and the outsourcing provider can be helped to legal account, which helps greatly to mitigate the understandable worries that are the inevitable corollary of handing over elements of a company's processes and operations to a third party. 

A heady mix or evolution with revolution

The primary areas where efficiency gains can be made are in Front Office functions including new digital comms channels, sales, marketing, customer relationship management and experience and better corporate governance; in the Back Office where IT,  procurement, finance, administration, HR, and compliance are of great importance as well as the digitising of documents and enhanced workflow management; in the Production environment where  R&D, product and service development, distribution an logistics take precedence. 

The Big Business Efficiency Report shows that, since lockdown, of the surveyed companies intending to make their operations more efficient, 38 per cent are focusing on learning and development (L&D), 36 per cent on AI, 36 percent on Machine Learning and 33 per cent to the introduction of new workflow management software. There is a degree of variance across sectors with telcos and equipment manufacturers prioritising AI and Machine Learning while the financial services sector the prime concern is workflow management software.

The organisations surveyed that have already or are in the process of transformation exercises reported that that capital unlocked by increased efficiency was/is being used to invest in new technology (41 per cent), improve customer experience (40 per cent), expand into new markets (34 per cent), compensate for falling revenues (27 per cent) and, finally, to fund Covid-19 contingency measures (26 per cent).

However, some respondents say there are barriers on the road to greater business efficiency with 35 per cent citing cost as the most significant problem followed closely by the complexity of the process (34 per cent). "Lack of time" to undertake meaningful transformation was a worry to 29 per cent of those surveyed while 29 per cent also found a lack of knowledge and understanding of the transformational processes themselves processes to be a major inhibition.

Finally, whilst, in the past transformation regarded within any organisation as relatively lengthy evolutionary process, times are changing and 82 per cent of those surveyed said they have plans in hand for revolutionary changes across the gamut of the ways they operate. That's the upside of the equation. The downside is that some businesses are still so bound up in, and hidebound by, established process and practices that transformation is not a strategic priority. There was a time when buggy whip manufacturers held the same opinion. You don't see many of them around any more.

Parseq's Big Business Efficiency Report was compiled from an analysis of surveys conducted with C-suite executives of 56 businesses with more than 250 employees and and annual turnovers of between £1 million and up to more than £500 million. The surveys were conducted on behalf or Parseq by the Censuswide organisation and took place between September 29 and October 5, 2020 at businesses in England, Scotland, Wales and Northern Ireland.