This is a draft version! Do not share the link externally!

Article

Why IT and Business Need to Talk for Telcos to Transform

As telecommunications companies race to align IT with fast-changing business demands, BCG Platinion helps them chart the right path forward.

No items found.

Telco transformations are often delayed because of this question: where to begin? We frequently see players overwhelmed by complexity at the outset of Business Support System (BSS) transformations, resulting in a lack of alignment and costly errors.

In many cases, telcos want to address operational issues urgently – such as fixing their customer centre. When hurrying to tackle problems like these, telcos commonly overlook the importance of establishing an integrated scoping team and tackling fundamental issues rooted in the product model itself.

This is where a proven capability framework is indispensable, enabling the rigorous, coherent scoping necessary to start a large IT transformation where it really matters. Crucially, the right framework will encompass every aspect of the business scope in a top-down, bottom-up way.

Before implementing the framework, telcos need to understand the main transformation pathways, as well as the importance of a ‘big picture’ approach.

Picking the Right Pathway

In the fast-paced world of telecommunications, companies are facing unprecedented challenges when it comes to aligning their IT with evolving business needs. So far, three primary methods have emerged as strategies for this transformation: legacy modernization, keeping up with industry pace, and business model disruption.

Legacy modernization focuses on renovating core IT systems like outdated BSS stacks, including end-of-life CRM systems. This approach addresses the high maintenance costs and limited innovation capabilities of existing systems, necessitating BSS replacement strategies, health checks, and new collaboration models with System Integrators (SIs).

Keeping up with industry pace involves adapting to the new norm by evolving business models and extending product portfolios. This may include splitting up into NetCo and ServCo entities, forming new partnerships, reimagining IT software delivery processes, or leveraging cutting-edge technologies - GenAI and cloud computing at scale are prime examples.

Business model disruption challenges existing value chains by shifting towards tech-driven models. This strategy places IT at the forefront of change, requiring new IT structures and the rebuilding of product portfolios with programmable networks and XaaS (Anything-as-a-Service) at their core.

EXHIBIT 1

Telcos ultimately need to choose the transformation pathway that aligns best with their business goals. But regardless of the chosen route, these key guidelines should be used to steer the process:

  1. Structured scoping with a Process and Capability Framework: this ensures your transformation is built on strong foundations, aligning business and IT in a top-down way.
  2. Aligned business and IT scoping: by working closely with system integrators, technology implementations can be kept in sync with both business needs and market demands.
  3. Identifying skill groups and allocating efficiently: this means pinpointing strategic and operational skills as well as technical ones, making sure the right expertise is in place at the right stages of the transformation journey.

Those that proceed without the thorough scoping and guardrails enabled by an effective framework risk stumbling into complexity, which is why precision is paramount.

Promoting Project Precision

When it comes to the intricate process of BSS transformation, precise definition of project scope and meticulous estimation of effort are foundational priorities.

By drawing on transformation expertise and leveraging industry practices like eTOM, BCG has helped clients to shape and tailor frameworks that serve not only as top-down instruments, but as definitive guides to excellence.

Using our specifically designed telco transformation approach, combined with the Process and Capability Framework, we have helped clients to manage programs spanning tens of business processes, and more than 600 capabilities across B2C, B2B, and wholesale.

EXHIBIT 2

The framework transforms scope management into a disciplined process, making it a collaborative effort and maintaining a shared understanding of processes and business needs. Strategic classification enables capabilities to be categorized in a way that supports core functionalities and future-readiness, covering compliance, innovation, and competitive advantage.

Effort estimation has evolved from an art into a precise science, and this shift is noteworthy. The process can now meticulously account for the nuances of future business models, scrutinizing every step of the process, and as a result, the performance of each capability can be fully optimized.

Our framework is underpinned by a tried-and-true taxonomy, see Exhibit 3:

EXHIBIT 3

When in action, the framework facilitates transparent, adaptable, and cogent estimation that serves immediate needs and lays the groundwork for future innovation (see Exhibit 4 for an applied client use case).

A recent client engagement demonstrated how the framework can accelerate both alignment and execution. Once the business requirements had been clearly articulated, the team translated them into capabilities and features, applying a structured top-down approach that still allowed for bottom-up prioritization. This ensured that value-adding use cases were identified early, scoped effectively, and delivered with measurable impact. Beyond the immediate outcomes, the structured process also enabled transparency across teams - and created a repeatable model for managing future transformation initiatives.

EXHIBIT 4

The Power of Foresight

In an industry undergoing rapid and constant change, strategic foresight and adaptability have become mission critical. The Process and Capability Framework can help you to react to sudden market changes in a structured way, simplifying complexity that threatens transformation success.

Leaders need to be able to make directional decisions based on complete and relevant information, and the scoping process we implement enables this directly (while also fostering a powerful bond between business and IT units). To find out more about how we can enhance your telco transformation, get in touch!


More to Explore

No items found.
No items found.
No items found.
Technology, Media & Telecommunications
No items found.