Why Telcos must act now to survive the next recession
The possibility of a recession is looming, and to thrive beyond any next economic downturn, telcos must act now and with rigour.
Before we go into how telcos can successfully navigate economic downturns, it’s worth spending a moment on what challenges it causes in the first place.
A recession, without a doubt, will cause disruption and with disruption comes challenges, including labour shortages, budget cuts and much more. We will see the market start to contract, and the number of opportunities for telcos to win new business shrink drastically due to consumers not being as frivolous with their hard-earned money as before.
So, what do telcos do to successfully navigate an economic downturn?
According to Gartner's Quick Answer by Kameron Chao: How Should CSPs Prepare for Economic Downturn and Probable Recession?, “When facing a smaller than expected budget, your portfolio prioritization will become more critical and challenging. Communication Service Providers (CSPs) will need to reprioritize investments toward critical business initiatives based on enterprises’ funding outlook."
Although the potential for a recession would see telcos cut costs and pivot from their existing business models, they would still need to dig into their pockets and invest in solutions to stay ahead of their competition. Telcos should look for a solution that supports many lines of business and helps them attract new customers, increase revenue, and, let’s not forget, deliver better customer experiences. And they will need that to drive brand loyalty and trust.
Now, let’s look at what to prioritize in the portfolio when budgets are cut and why that starts with what impacts the business the most.
Ditch Your Legacy Business Model
Many telcos struggle with sales due to siloed or poorly integrated selling and order management systems. In addition, telcos typically have multiple product catalogues and legacy BSS stacks, which leave their B2B customers with poor overall experiences.
As enterprise business units get more ambitious in the comprehensiveness of what they are trying to sell, the more their current systems get out of control. In many cases, these systems limit and prevent them from growing revenue, which is a clear sign they should upgrade or implement new software.
The rising demand for higher productivity in enterprises pushes telcos to seek a configure, price and quote (CPQ) solution. Why? Because a telco-specific CPQ solution can handle the myriad factors in B2B service configuration and charging models, which include optional add-ons, multi-line ordering, multi-site solutions, shared access, multi-access providers, discounts, and plenty more.
With the right CPQ solution, telcos can handle the complexity of B2B2X partnerships and capitalize on and monetize the solutions that spring out of those. They can also offer new opportunities that generate new revenue streams through different channels like IoT, applications, and managed IT services.
In a recession, there will be less deals on the table, and the pressure to win new deals will be even higher. Telcos will need a CPQ solution that provides live system calculated pricing, streamlined discount approvals and the ability to accurately provide quotes that support the business and maximize the win rate for those precious deals.
As I mentioned earlier, tough economic times can drive the need to downsize in order to reduce costs. Loss of skills and capacity in the workforce can be offset with investment in automation, starting with a CPQ solution that creates rich valid and ready-to-process orders, even for complex B2B solutions.
While this kind of software has been around for decades, telcos still struggle to find a robust CPQ solution to help them do it all. When an organization is ready to fully invest in networks and flow through automation, a CPQ solution can fully automate, making the business future-ready.
Fortunately, this complexity is solvable with a CPQ solution tailored to the unique needs of telcos.
As If You Needed Another Reason to Implement a CPQ Solution
In my last article, I discussed how market offerings explode as new digital services emerge from B2B2X business models and the adoption of 5G. The looming recession only adds to the mounting pressure to stand out in a competitive field and offer richer services to customers. A CPQ solution tailored to telco-specific complexities will improve process speeds and create a faster time to market, which results in a better overall enterprise customer experience.
A CPQ solution that follows open API standards will reduce the costs associated with the integration and enable consistency that can be replicated and scaled. This, in turn, allows CSPs to add new partners and their offerings quickly and cost-effectively to the ecosystem. CSG offers a CPQ solution that is designed for CSPs and provides ready-to-go reusable integration through open APIs.
Based on how difficult it has been for telcos to consistently price and offer B2B bundles since the onset of 5G, the looming recession will only make it more difficult. To summarize, telcos must be hyper-focused to survive. They must invest in a CPQ solution that can do it all, open the door for new revenue streams, unlock savings, and enhance the customer experience. With a CPQ solution in play, telcos can navigate uncertain times and rapidly excel their business when things are going well. What more could you ask for?
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