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.
This is one of the findings of new PwC research released by Oracle.
It finds that, 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.
CIOs surveyed said that, in terms of aligning IT with the business priorities, improving customer experience is the top driver for IT strategy in the communications industry. Thus, 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.
On the downside, risk, lack of budget and complexity of existing systems are the greatest barriers to effective IT strategy implementation.
To this end, CIOs are planning a move towards more standardised, 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.
Other key findings of the research 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, vice-president: product marketing at Oracle, says: “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 at PwC, adds: “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.”