Tomorrow starts today

Digital MigrationThe path to business success

Table of contents

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Introduction – What is Digitalisation?

The View of South African CIOs

Adoption of Digital

The Path to Digital Migration

Telkom Business’s response to Digitalisation

Glossary of Terms

01 © Telkom | 2015

02© Telkom | 2015

Digitalisation is the integration or adoption of digital technologies into everyday life by the digitisation of data or process that can be digitised. It is first and foremost a social and business phenomenon that is underpinned by the increasing adoption and use of digital technology for everyday processes and communication.

Digitalisation is therefore a large-scale social/lifestyle trend that currently permeates society and is not often discussed as a business technology trend. This is the paradox of Digitalisation – it is not primarily about technology. Digitalisation is being adopted by consumers much faster than enterprises. The core of Digitalisation is the mass adoption of connected digital technologies and applications by consumers, which is followed by adoption from enterprises and governments.

To compete, win and remain relevant in the digital era, organisations need to be able to successfully interact and transact with digital savvy users and leverage the network effect to drive adoption – a new challenge that requires a fresh approach.

Some of the companies that have achieved significant success in the digital era are ‘Hyperscale’ businesses1 or Supercompetitors2 such as Apple, Amazon, Alibaba, Facebook and Google.

While many industries have been and continue to be disrupted by digital era businesses, many incumbent companies remain defiant and believe that they are immune to the disruption – this is evident by the slow

adoption of digital.

This posturing by incumbent organisations provides opportunities for new entrants to ‘shape‘ incumbents’ industries, gain ‘early mover‘ advantage and convert customers away from incumbents.

Successful new digital companies, once they enter a specific industry or niche, make it very difficult for others to compete and win in the space (Amazon in the retail space).

As a phenomenon in society, Digitalisation can be seen in three distinct areas:

1. Consumer Adoption – Digital consumers are already fully adapted to the digital environment. They generally have at least one personal digital device that they expect to be constantly connected, and they are increasingly willing to share personal information through these devices.

2. Increasing Technology Accessibility – Digital technology is becoming more ubiquitous both in the number of devices that consumers have and in terms of the infrastructure backbone that supports these devices. Affordable, high-capacity broadband is becoming increasingly available worldwide, and new technologies, applications and devices are being developed to utilise it.

3. Business Integration – Many companies are beginning to see the benefits of this trend of ‘hyper connectivity’. From mobile connected workforces to discovering new ways to interact with customers, companies are investing money in new digitalised technology and utilising Digitalisation to gain competitive advantage.

01Introduction – What is Digitalisation?

1 Competition at the digital edge: ‘Hyperscale’ businesses - McKinsey - 20152 The New Supercompetitors - strategy-business.com - 2014

Technology +

fast digital adoption by consumers+

innovation +

slow adoption by incumbents =

disruption zones for new entrants

03

Digitalisation is a trend that businesses cannot ignore. As it permeates all levels of society, businesses need to make sure they are ready for it or they will be left behind.

An example of this can be seen in the mobile device growth in South Africa. Figure 1 shows the projected growth of 2G, 3G and 4G devices in South Africa, while figure 2 shows the breakdown of devices using data. Together, these graphs show, not only how rapidly the number of devices is growing, but how they are becoming increasingly sophisticated in their functionality. This will, in turn, allow for an increasing number of business usage functions.

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3 Africa Analysis SA Telecoms Model

Digitalisation is the pervasive incorporation of digital technologies to seamlessly weave togeth-er the business processes, systems, customers, partners, employees and industries for the achievement of the ultimate connected business.

– Telkom Business

Figure 1: Mobile Device Growth in South Africa3

Figure 2: Number of Devices Using Data in South Africa1

This rapid digital adoption also becomes a driver for change, as increased accessibility to connected devices creates a more empowered and digital savvy population.

Beyond the proliferation of smart devices, which consumers are using for a growing array of functions, there are also other key trends emerging in the digital world. For example, software development and distribution are getting faster, and software platforms and app stores make it easier to create and sell mobile services. This reduces barriers to entry for enterprising digital entrepreneurs.

Fibre connectivity is also becoming increasingly ubiquitous, and improved connectivity speeds and accessibility are, in turn, driving increased demand for

online services. The advent of Long-Term Evolution (LTE) technology is also creating faster mobile connectivity and improving the ease-of-use for mobile services to the point where it is becoming a feasible fixed broadband substitute.

In order to take advantage of these trends, Digitalisation strategies are being implemented in a variety of industries across the globe. Figure 3 shows the industry adoption of Digitalisation in Germany according to Accenture’s Top500 study of 2014. This digital transformation has created a new competitive landscape for enterprise companies. Smart solutions will redefine the interface to customers in most industries, and market positions will be lost or won much faster than before.

To remain competitive, it is essential for companies to formulate a digital strategy, provide digital offerings, and implement digital processes.

Figure 3: Industry Adoption of Digitalisation in Germany4

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Automobile ManufacturersTelecommunications

Average business result: 49.7

Average digital maturity: 2.8

Digitalisation Challenges Digitalisation Champions

Digitalisation Laggards Traditional Champions

4 Accenture – “Germany’s Top500 and the Digital Challenge” 2014

The View of South African CIOs

02With Digitalisation fast becoming a key part of any business strategy, it is important to get a view of what is being prioritised in the South African business context.

While the concept of Digitalisation remains new to most South African businesses, academically it is a well-recognised and acknowledged concept by South African executives. In 2015, Telkom Business hosted an executive suite Technology Road Show. This was attended by top South African industry players and data was retrieved around a few burning questions on Digitalisation.

From this, Telkom Business gathered views on some of the important focus areas around Digitalisation going forward.

The importance of Digitalisation is, however, gaining traction in South African businesses. As figure 5 shows, 30% of respondents say that their companies are in the process of articulating a digital strategy. Furthermore, Digitalisation is increasingly being seen as a way to solve major business challenges. Figure 6 shows the business challenges that CIOs are hoping to mitigate using Digitalisation strategies.

Figure 6 further shows that many businesses in South Africa already have a strong focus on Digitalisation as a strategy going forward. However, in order to respond to this trend successfully and make Digitalisation part of their strategy, they must first undergo digital migration.

When asked whether they consider Digitalisation to be a potential competitive advantage in business, 96% of respondents said that they believed it was (figure 4). Only 28% of respondents, however, have an articulated digital strategy in their businesses (figure 5).

Figure 4: 96% of respondents agree that Digitalisation is a case for

competitive advantage

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Figure 6: What business challenges are you hoping to manage through a

digitalisation strategy?

Customer Service

Omni-channel

Staff Productivity

Other

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Figure 5: When asked if companies had a formal digital business strategy, only 28% responded “yes” to this question

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Adoption of Digital

03Consumers continue to adopt digital faster than most incumbent organisations, resulting in a misalignment between consumer needs and service provider capabilities. Consumer behaviour has changed, and consumers expect their service providers to embrace digital – anytime, anywhere and any device.

Misalignment and ignoring changing consumer behaviour provide an opportunity for new entrants to disrupt an industry and shift focus to delighting customers across the entire customer journey.

Many incumbents continue to offer the same products and business models that worked through traditional analogue-era channels. In some industries, the challenge is compounded by incumbents adhering to business models that are convenient for themselves, but to the detriment of the customer.

New entrants strive to deliver new and differentiated offerings with new business models. Pay-as-you-go or as-you-use services work for disruptors, but are difficult for many incumbents due to organisational constraints and culture.

Analogue-era organisations typically have a ‘one size fits all’ approach to offerings, marketing, sales and customer engagement, meaning that all customers are treated the same, irrespective of their needs or situations. Many incumbents still depend on ‘face-to-face interactions’, although most customers prefer doing everything online, at their convenience and through digital channels of their choice.

New entrants are data driven, are 100% digital and have great insight into customer behaviour and needs, enabling a personalised customer experience at every touch point, and when required, adoption based on real-time customer data.

Incumbent organisations use their brand, market position and assets to attract partners, but do so in a very

prescriptive manner. In many situations, incumbents also prefer to develop their own products and services to expand into their existing markets.

Successful digital businesses leverage third-party components, resources, networks and ecosystems to deliver new offerings through new business models. This is achieved through a combination of digital platforms, ecosystems (real-time market places), the ability to scale critical capabilities, and dynamic product creation to differentiate themselves from traditional businesses.

With the focus on enhancing customer experience and fast delivery of new offerings through digital channels, IT must deliver new digital solutions but with the emphasis on agility, scalability, continuous change and fast time to market. The challenge is that most IT organisations take months or years to deliver new solutions.

Digital era companies have fast ‘go-to-market‘ capabilities, enabled by ‘cross-disciplinary‘ collaboration between marketing, innovation, R&D (research and development) and IT teams for building, evolving, operating and supporting rapidly changing resilient digital solutions.

A side effect of incumbent organisations being slow to adopt digital, hinders employees’ ability to engage with digital customers. Although some incumbents have digital as part of their strategy, it’s often a fragmented strategy that is not pervasive across the organisations and not core to their DNA.

Successful digital businesses are wired to compete and win in the digital era. Their DNA is digital and they have a ‘digital first’ mindset. They employ digital-savvy resources and prioritise digital integration across all aspects of the business, with a focus on the customer experience as their key differentiator.

07 © Telkom | 2016

Driving a Successful Digital Migration

Digital migration is a way for businesses to respond to the trend of Digitalisation. A successful digital migration will result in a company that is more efficient, more intelligent, and has greater competitive advantage in its industry.

Digital Migration can be a complex and difficult process for a company. There are many factors that have to be considered and many steps in the process. The first requirement of digital migration is digital

Companies that have then made the decision to undergo digital migration can utilise strategic technology levers in leading technology domains that support the migration (such as pervasive connectivity, UC, mobility, M2M, IoT, Social Media, Cloud, and Big data). These technology levers can be used to implement the necessary digital processes and solutions within the business.

Once they have the required technology levers in place, businesses can look at building the technology and business process platforms for Digitalisation. This can be implemented through converged access, connected devices, end-to-end networks and cloud solutions, seamless communications, and business process integration.

readiness. This refers to how prepared the company is to make the move to digital processes and platforms. To do this, the company must be able to see the opportunity for competitive advantage, and the wider ecosystem in which it exists must be ready to adapt to new digital processes.

Once this has been established, the business must look at how it will respond to this environment of digital readiness and formulate an integrated business and technology response, i.e. who will lead the migration towards Digitalisation?

To achieve growth and distinguish themselves from competitors, South African enterprises need to address the impact that Digitalisation will have on their business and develop their ability to adapt to the new digital reality, if they want to spread into new markets and diversify revenue streams.

Implementing a Digitalisation strategy in a business is, however, not a simple undertaking. Every business is different and its path to digital migration will be reliant on its unique set of circumstances.

There are several basic steps that a business must undertake to develop an ongoing digital strategy.

Reactive to industry trends

Proactive to industry trends - Sustainable Competitive Advantage

Digital readiness of the population

Response of business= digitalisation

Technologylevers

Strategy enablers

Figure 7: The Digital Migration Journey for Enterprise

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While planning a digital migration journey, it is important to consider the following in order to enhance the customer experience:

1. Mapping the Customer Journey: It is imperative to map the complete customer experience journey. A data-driven process and focus on understanding customer behaviour will identify areas for improvement, optimisation and radical change, and force a review of product offerings. Companies are encouraged to digitalise all customer touch points in order to ensure a complete and consistent experience. Partial digitalisation will result in a roller coaster ride for the customer, with some touch points or activities digitalised and others not, leading to a reduced overall customer experience. End-to-end mapping can also identify potential new offerings.

2. Pace of Technological Change: Digitalisation and emerging technologies are transforming people, organisations, industries and economies. The rapid rate of technological change presents both challenges and opportunities for some companies, but for others, its relevance and business model may be questioned. The challenge for any business is to decide how fast and how far to go on the path to digital migration.

3. Data Driven: Probably the three most important capabilities of a successful digital era organisation are: being data-driven, capturing data in real time, and performing meaningful analytics. Digital is all about data, whether it be data input, data processing or data output (Apple, Amazon, Facebook, Google, etc.). Many organisations have access to an abundance of data, but face challenges in assessing quality, processing data and extracting value. New roles for many organisations are that of digital data

technicians and data scientists who make business sense of small and big data, by producing decision-making information.

4. Competition: Incumbent organisations are the target. The incumbent’s position in the market (brand, products, customers, business partners, barriers to entry, etc.) is significantly reduced in the digital era. New competitors include not only local companies, but foreign brands with local reach. They typically opt for innovative approaches and technologies to win over customers, leverage the network effect, deploy disruptive business models and operate with much lower cost structures. They intentionally build a new company from the ground up, specifically to compete and win in the digital era. For these companies, data is the most powerful barrier to entry. Consider whether you want to collaborate with the opposition or compete with them.

5. Digitalisation of Business Processes: Digitalisation provides companies with an opportunity to review and optimise processes, and ultimately to reinvent the business. Obvious areas to consider are paper- and people-intensive processes, which can be substituted with frictionless digital experiences. Benefits include reduced operational costs, real-time data input processing and output, the ability to leverage online ecosystems, extended company reach, new business models, swifter decision making, faster time-to-revenue and exceptional customer experience.

6. Culture: Probably the single greatest challenge in executing a digital migration strategy is organisational culture. Digital migration is a collective and inclusive strategy requiring all levels and divisions to participate in achieving a clear end goal.

The Path to Digital Migration

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7. Digital Capability: Digitalising the customer journey and business processes represents a new challenge to most organisations and requires a digitally competent resource team. The same applies to digitally enabled products and software, where organisations can build or buy such products and services. One option for acquiring these resources, products and customers could include a merger or acquisition.

8. Incubation Lab: Rather than going the traditional internal route, companies should consider an incubation lab or capability. Such a lab should be staffed with start-up innovative mindset resources, with laser-focused deliverables, experimenting with new technologies, techniques and business models, and can be isolated from the rest of the organisation. This enables innovative business solutions to be delivered in a fast, agile and timely manner. In addition, the incubation lab can assist in cultivating new, digital-ready DNA for the company.

9. Integrated Connectivity Platform: This is a prerequisite for the seamless delivery of digital solutions and services. With the need for real-time collaboration across multiple digitally-enabled

“Culture is a derivative of leadership and represents the company’s personality, value system, purpose, and people. What’s clear in every Altimeter Group research programme is that the need to change is constant and pervasive. This is the effect of disruptive technology on business and society. Culture, too, must adapt to symbolise resilience and communicate a renewed vision to employees and the market overall.” Altimeter Group5

Changing company culture

Thinking beyond a “campaign mentality” in digital strategy efforts

Cooperation between departments and team silos

Resources (people, technologies, expertise) and budget allocation

Understanding behaviour or impact of new connected customer

Securing executive support of leadership

Lack of data to justify value of digital transformation

Risk management, compliance, and/or legal implications

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The importance of digital transformation initiatives to your business’s digital transformation efforts

channels, companies need to integrate voice, data and video into a single converged platform. This enables collaboration with customers, employees, suppliers and partners anytime, anywhere. Companies need to be omnipresent. Converged connectivity platforms extend access to and collection of data to the edge of business boundaries with mobility and Wi-Fi, thus enabling real-time predictive analytics for informed decision-making.

10. Intermediaries: The transparent nature of digitalisation enables users and competitors to rapidly determine a company’s unique selling features, business model and pricing. In fact, there is a dramatic increase in the number of ‘compare before you buy’ sites and apps managed by third parties who have been able to insert themselves between the customer and a seller.

5Altimeter Group Digital Transformation Survey - Altimeter Group - 2014, N=59

Figure 8: Challenges Facing Digital Transformation5

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“Digital migration is a way for businesses to respond to the trend of Digitalisation. A successful digital migration will result in a company that is more efficient, more intelligent, and has greater competitive advantage in its industry.”

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Compile a high level digital business strategy

Key questions:

• What is the impact of digitalisation on your industry?• What are the key digital opportunities and risks for your business?• What is the potential impact of digitalisation on your financial and customer metrics?• How does digitalisation link to your business strategy and plan?

Conduct a digital readiness assessment

Key questions:

• How are current key business processes utilising (or not utilising) digital technologies?• What is the ideal state of digital uptake in key business processes?• What are the high level business process and technology gaps in the business?

Develop a digital strategy implementation plan

Key actions:

• Implement an organisational change management plan.• Align necessary technology strategies.• Implement a transitional plan around timing and resources.• Ensure ongoing measurement and benchmarking.

The Digital Implementation Roadmap

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The Competitive Advantage of Digitalisation

If implemented correctly, digital migration can give a business a distinct competitive advantage over its competitors.

A competitive advantage is generally gained by combining the following aspects:

• Operational effectiveness, i.e. doing the same things better.

• Difference or positioning, i.e. doing things differently or doing different things.

• Industry shaping, i.e. predicting, influencing and responding to the industry structure.

A Digital Competitive Advantage derives from understanding and optimising the digital impact and opportunity in each of these realms.

When implementing a Digitalisation strategy, it is important to keep a balance between user needs and business needs. Customers or end-users must show a demand for Digitalisation options and be equipped and ready to utilise them. Businesses must also have the capacity to implement the Digitalisation strategy and the ability to leverage the competitive advantages it provides.

Companies are using digital technology to create real, transformative effects across customer experience, internal operations and new business models. It can improve the customer experience with technologies such as online or omni-channel solutions and can have a big impact on customer satisfaction. It allows businesses to reach new customers and markets, and it makes it possible to transition physical products or services to digital products or services. It can also improve internal communication, enhance the productivity of workers and automate operational processes.

Technology Trends and Enabling Digitalisation

When looking at digital migration, a business must consider three distinct areas:

Business Drivers – How they will respond to the changing industry environment, how they will enable business growth and respond to competition.

ICT Needs – The business needs expressed as ICT product requirements, a digital migration plan.

Points of Differentiation – The criteria that the business will use to choose ICT providers and formulate an ICT supply plan.

It is also important that the business ensures that it is able to leverage the power of the latest technologies as part of its digital migration strategy.

The Key Technology Levers

In order to move towards a fully digitalised business, one must look at the technologies available to help achieve this.

Telkom Business has therefore identified several Key ‘technology levers’ that represent the current leading technology trends impacting all industries. Organisations need to understand how they acquire, deploy and integrate these technology trends to support their Digitalisation strategy. These trends are described as technology levers in that they can be used to drive Digitalisation strategies.

1. Pervasive Connectivity – new technology allows for constant and all-encompassing connectivity across all areas of a business. It is now possible for head offices, regional offices, branches, suppliers and mobile employees to communicate with each other and process transactions in real time, even across widely dispersed geographical locations.

2. Machine-2-Machine / Internet of Things – M2M and IoT can be utilised in a number of ways to increase organisational efficiency. For example, it can be used for condition monitoring across such areas as utilities measurement, perishable food monitoring, employee behaviours, time-pattern monitoring, logistics, stock control and asset tracking.

3. Mobility and Unified Communications – The integration of mobile with other real-time communication services such as IM, presence, video and data sharing with non-real-time communication services such as SMS, email, voice mail and fax, can enable communication for business processes.

4. Social Media – by engaging effectively with customers on social media platforms, a company can increase its brand capital, find out what customers want and need, and enable an additional sales channel.

5. Cloud Computing – many key business processes can now be run through cloud services. For example, IT services and solutions such as security or data centre services such as hosted applications, backup and storage. Leveraging the power of cloud computing can increase system uptime and make necessary information or systems available across all areas of the business, even remotely.

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“Aligning business intelligence capabilities in a business allows for real-time business decisions based on an analysis of gathered data.”

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6. Big Data – the volume of data being produced by businesses is expected to expand 50-fold by 2020, and unstructured data will account for 90 percent of all the data created in the next decade. Companies that are able to use big data analysis in order to spot trends, track performance and make strategic decisions will have a major advantage in many aspects of their business.

The Digitalisation Strategy Enablers

The process of digital migration is one of taking a system of disparate communications and technology suppliers in a business environment and transforming it into a system of integrated communications and technology suppliers.

By utilising Digitalisation Strategy Enablers it is possible to create a technology platform for the business which provides a competitive advantage in the age of Digitalisation.

No strategy for leveraging digitalisation for competitive advantage

Ineffective customer interaction and inefficient internal processes

Disjointed communication and data flows

Disparate communicationtechnology platforms

Clear strategy for leveraging digitalisationfor competitive advantage

Effective and efficient customer interactionand internal processes

Cohesive communication and data flows

Integrated communicationstechnology platforms

Disparate communicationstechnology suppliers

Integrated communications technology and suppliers

Digitally enabled business processes and competitive market offerings

Seamless Communications

ConvergedAccess

End-to-endNetwork

ConnectedDevices

Figure 9: Digitalisation Strategy Enablers

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Some of the main components of a digitally enabled platform include:

• Converged Access – high speed, pervasive and reliable connectivity

• Connected End-Users and Devices – Mobile, BYOD and IoT functionality

• End-to-end Network and Application Management – Network, Data Centre and Cloud capabilities

• Seamless Communications – including access, network and services

• Digitally Enabled Business Processes and Solutions – UC / M2M / mobility and communication enabled business processes

Old vs New State: Making the Transition

Companies have to move from the traditional communication environment to a seamless communication environment to fully become digital players. To illustrate some elements of this transition, the following are examples of the changes across various layers of a digital capability:

Fragmented AccessFragmented and duplicate Access mediums – ADSL, mobile SIMs, leased lines, primary rate voice access, mostly fixed connectivity to enterprise applications.

Selected Devices connectedMultiple end-users and devices not connected. Non-standard mobile devices not allowed. Limited connected sensors. Limited Wi-Fi offering Internet access to customers.

Fragmented Network / Data Centre / CloudNo end-to-end manageability and performance analysis. Separate access, network and hosting/cloud providers.

Independent Communications TechnologiesCommunications hardware and software not interop-erable – legacy access, PBX, Internet access not able to link services, limited use of video applications.

Standalone Communications and Business Processes Customer solutions and supporting business process-es not integrated into a standardised communica-tions capability, non-stadardised comms platforms, limited social media integration for customer interaction.

Converged AccessSIP, VPN, Internet over fibre or next generation copper access with fixed or mobile redundant backup (improved manageability and cost efficien-cy). Pervasive (fixed and mobile) access to enter-prise applications and new mobile apps for employ-ees and external customers (improved efficiency and customer experience).

Connected devicesConnected end-users and devices - BYOD, IoT. Wi-Fi used where customer transactions occur for customer Internet access in exchange for customer tracking. Customer interaction and advertising (improved customer experience). Pervasive connected sensor network with analytics integrated into business processes (improved efficiency andcost effectiveness).

Integrated network / Data Centre / Cloud End-to-end network and application performance management across Network, data centre and cloud (improved manageability).

Seamless Communications PlatformCommunications infrastructure and services cohesive and optimally tied into network routing, data centre and cloud services (Improved manageability).Video applications used for improved conferencing and collaboration (Improved efficiency).

Digitally Enabled Business ProcessesUC / M2M / mobility - business processes communi-cation enabled (Improved efficiency). Social media integrated in contact centre infrastructure and business processes as a customer service channel (improved customer experience).

Digital Business Architecture Building Blocks

The palette of assets for digital business should include technologies — these include any of the technologies that enable digital business, such as the devices that make up the IoT, communications, applications and data analysis, cloud platforms and solutions, mobile devices and applications, social networking and media, and digital business applications.

“Determine Your Digital Business Architecture Building Blocks to Guide Investment Decisions” - Gartner 2015

16© Telkom | 2016

With the focus on the customer experience and business drivers, companies need to consider a digitalisation strategy that is business-driven, mapped to their specific needs and supported by a connectivity framework that will enable the execution of the Digitalisation strategy.

Embarking on the digital migration journey requires that you map your strategy for the future, based on where you are today and the digital customer journey.

In order to better understand current digital capabilities and future requirements, a digital readiness or maturity assessment can help companies better understand their current digital capabilities and future requirements. This typically includes key areas for innovation across current and future services, channels and infrastructure, including customer engagements across all channels, digital operations and governance, as well as infrastructure readiness using leading practices.

Benefits of Digitalisation

There are a few major business benefits to successfully undergo digital migration and implement a Digitalisation strategy.

Some of the main benefits can be seen in:

• ICT sourcing optimisation • Technology supplier integration • ICT efficiency enhancement • Business intelligence gains

Getting Started

The task is urgent. Companies can embark on the digitalisation journey today, or wait until they are forced to – at which point it will be too late.

The framework below provides a high-level indication of how digitalisation allows companies to get closer to customers, offer them a seamless experience and to stay at the centre of their commercial lives.

ICT sourcing optimisation – outsource vs insource

Deciding what to insource and what to outsource in a business can be a delicate balancing act. When enabling a digital migration strategy, companies must have disciplined ICT sourcing governance capabilities. This will allow standard solutions to contribute the majority of the outsourced ICT stack, with a minimum number of vendors. Testing and demonstrating these ICT supply and operating modes should also become a natural behaviour as organisations move towards buying solutions rather than capacity.

One of the challenges around sourcing optimisation includes knowing which ICT services and assets are important to retain ownership of, versus which services can be outsourced for greater efficiency. Companies also need to understand the implications on costs, flexibility, service levels and risk that come with outsourcing a solution, as well as be able to identify areas where it is necessary to retain access to skills and capabilities.

Telkom Business’s suggested response to sourcing optimisation is a process of Review, Identify and Acquire.

First, review the complex internal structures and current management of technology life cycles within the company. Then identify the ideal capability placement – be it internal, with solution partners, or with service providers. Finally, acquire a managed services approach to enable flexibility and meet business service level expectations.

Figure 10: Opportunities in digital6

6Fiserv, Delta Partners analysis

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Get closer to customers

Offer a seamless experience

Reduce cost to serve customers

Connectivity platform

Position at the centre ofcustomers’ commercial lives

through new P&S

Build customer intimacythrough social media &direct communications

Reward customerloyalty through analytics

Put mobile at the core of the offering

Reduce the cost of recruiting new customers - digital marketing and sales channels

Ensure consistent user experience across multiplechannels - omni-channel

Allow for a non-linear customer journey - across

mobile, call centre and in-store

Opportunitiesin digital

Convergence Wi-FIHosted Collaboration

The benefit of optimising outsourcing in this way is that it gives businesses managed, flexible and responsive supply models for their ICT services. It also shares the responsibility for service levels and risk and ensures that appropriate internal skills are focused on business demand and business solutions.

Technology supplier integration – vendor consolidation

Vendor management is an important part of a Digitalisation strategy. Companies must ensure that they have a holistic view of vendors across their entire ecosystem. This view should include data analytics on service usage and performance, pricing and costs and ICT data security, data integrity and system availability risks. They must also ensure that ROI is measured in terms of strategic business outcomes and that governance is established across internal teams and appropriate vendors.

One of the main challenges around vendor management is dealing with a wide range of technology suppliers who may have competing objectives. It is therefore important to make sure that technology, solution, integration and service providers are all aligned, and that the company has a uniform policy on SLAs which does not allow for weak points or ‘blame’.

Telkom Business’s suggested response to vendor management is to rationalise, reduce and consolidate the number of suppliers, while increasing the internal ICT supply and demand management capabilities. This will reduce dependency on technical and support skills and allow for cross-functional SLAs with reduced supplier interfaces.

The benefits of this approach are reduced cost and complexity around managing third parties, as well as reduced risks and ‘points of blame’ as the company receives bundled and pre-integrated services ready for use.

ICT efficiency enhancement – costs and service levels

Efficient ICT operations in a business will have a direct and positive impact on the overall business responsiveness and productivity.

The major challenge around improving the efficiency of ICT infrastructure and systems concerns balancing the competing demands of improving service levels, reducing

costs, managing risks, responding to business demands rapidly and supporting flexible supply models.

The suggested response to these challenges from Telkom Business is to contract solid service level agreements between the service provider and internal ICT and business divisions that support the business process performance goals. In addition, organisations should develop strong business solution capabilities, both internally and in partnership with key vendors to be able to rapidly respond to new business requirements.Emerging supply models that offer utility or on-demand services also make it possible to implement flexible, outsourced supply models that are closely linked to the real and variable demand for services.

The benefits of these capabilities are that they lead to lean and efficient response structures, which in turn reduce the time spent on managing infrastructure and related services. This allows for increased time spent on accurately forecasting business demand and rapidly responding to solution demands.

Business intelligence gains – big data collection and accessibility

Aligning business intelligence capabilities in a business allows for real-time business decisions based on an analysis of gathered data.

The major challenges around optimising business intelligence are collecting and storing growing volumes of data, including voice and video. It is also important for businesses to maintain constant control of their information assets and know that they are secure. Finally, they need real-time, dynamic access to the relevant data and trends presented in a meaningful way, so as to enable business decisions.

In response to this trend, Telkom Business suggests connecting Business Intelligence requirements to competitive advantage drivers and establishing ‘highly aware’ communications processes to collect and feed intelligence data, as well as allowing for the evaluation of suitable data collection, storage, protection and data recovery services.

The benefits of utilising Business Intelligence include near real-time analysis of business and communications processes, protected data and information assets, and competitive advantage assessment capability.

18© Telkom | 2016

As a leading digital solutions provider, Telkom Business is perfectly equipped to help your business on the path to digital migration.

Telkom Business is a leading provider with an extremely wide geographical coverage and is the only service provider that can provide true and affordable convergence across fixed, mobile, data and cloud.

Telkom Business’s Digitalisation Portfolio has everything that a business needs to implement a Digitalisation strategy.

What / Who does “it”

Wha

t “i

t” d

oes

/ is

Cont

ent

Com

puti

ng &

App

licat

ions

Com

mun

icat

ions

Individual“Person to Person”

Personal Communication

Fixed, mobile and convergedcommunications

Voice & data

Networks & Connected Systems

Basic data connectivityManaged data Network Services

M2MAgnostic access

Digital Home & Lifestyle

DevicesApplications

Integrated Services

Corporate IT Infrastructure& Applications

XaaSService Integration

Content & VAS

Video, music gaming, education, e-Commerce, “Smart Home”

Corporate, Systems“Machine to Machine”

Product sets which

deliver the needs

UnderlyingNeeds

Telkom Business’s response to Digitalisation

05Figure 11: Telkom Business Digitalisation Portfolio Approach

19 © Telkom | 2016

Finance

Account Managers

Solution Architects

Retail

Account Managers

Solution Architects

Service Delivery Management

Solutions

Government

Account Managers

Solution Architects

Health

Account Managers

Solution Architects

Education

Account Managers

Solution Architects

Diverse

Account Managers

Solution Architects

Fixed

Pre-sales specialists

Product House - TPD

Network / WholesaleManagement

Mobile Convergence IT & Cloud Services

Acquisition /Subsidiaries

Local & Globalpartners

Pre-sales specialists

Customer ops

Product

Mobile Network IT Factory

Pre-sales specialists

Product

Pre-sales specialists

Product

Partner Management

Pre-sales specialists

Product

Pre-sales specialists

Product

Telkom Business Solution Orientation

Telkom Business has decided to orientate towards a ‘Solutions Business’ focus to address the needs of vertical industries and horizontal cross-industry or value-chain focused solutions. This focus is designed to achieve the following:

• To prove to those industries that they are Telkom Business’s target market – ‘we are designed to serve your industry’

• To make it easier for companies to do business with Telkom Business – ‘Telkom Business already has solutions and services designed for your industry’

• To reduce the need, complexity and costs for in-house service aggregation and systems integration

• To reduce the risk inherent in self-constructing and

managing solutions• To reduce the dependence on internal scarce

skills that have limited knowledge and in-house experience only

• To link ICT solutions, services and costs closer to with business value, business outcomes and business needs – both in terms of the solution itself and the manner in which solution is offered, ordered, managed and commercially packaged

Telkom Business is perfectly situated to provide a holistic Digitalisation solution for your business. With its solutions-based approach, Telkom Business is able to assess what the customer needs and wants to achieve, and to make sure that the solutions that are on offer are aligned with those wants and needs, through providing a business solution for that company or industry.

Figure 12: Telkom Business’s New Vertical, Solution-Centric Operating Model

20© Telkom | 2016

Telkom & Business Connexion key differentiators

21 © Telkom | 2016

Largest, most reliable fixed

network

Leading POP Infrastructure

& backup

World-class Unified

Communication services

Best mobile data network in

South AfricaInnovation in M2M and POS

About 147,000km of fibre across South Africa

Hosted/virtual PBXs 98% population coverage in SA service provider to

include advanced M2M and PoS, complementingtraditional connectivity

Multiple redundancy, best availability and uptime in SA

Manage data network sites sites: 47,000+

Device management

2,643 mobile base stations constructedat 30 September 2015

Data Centre backup (9,700 squaremetres of hosting)

UC ready network (rich media capable)

Sites: LTE, 3G

Internet subs: 560,000+

Advanced UC with collaboration and telepresence

High data quality and speed with extensive LTE coverage

World-class network monitoring and management (24x7)

End-to-end SLA and network prioritisation

Application performance monitoring

Most extensive POP infrastructure – IP Net, Exchanges, Fibre distributionpoints, Internet POPs, Internet breakout, international investment in undersea cables

22© Telkom | 2016

Cloud and IT services

Converged Communications Wi-Fi hotspots

Network & application

performance management

Manage user-experience, networks and applications

Introduce Unified Communication platform and services

Provide all integrated IT, data centre and cloud services

Manage IT assetsin the data centre and cloud

Deliver QoS classes for applications

Hosted IP Contact Centre

11 Data Centres in South Africa. 3 x Tier IV design certified

ISO20000 certified for hosting

Full range of Cloud solutions (Public, Private, Hybrid) offering IaaS, PaaS and SaaS

Business requirement based IT solutions

Data Residency / Sovereignty

Faster time to market

Economies of scale

Service LevelAgreements

Campus Wi-Fi roll-out in customer locations

Free access to

Wi-Fi hotspots as part of Mobile data offer

Telkom & Business Connexion key differentiators

23 © Telkom | 2016

Leader in DataCentre Servicesin South Africa

Data Centre FacilitiesManagement and

Operations

Data Management Services Data Centre

Support ServicesCloud Platform

Support Services

BCX’s Tier IV designed-certified data centres are the benchmark for hosted information systems and applications

Mainframe Support Services

ICT InfrastructureManagement

Infrastructure as a service

Computing as a service

Cloud Infrastructure(Pvt Cloud and CSB)

BCX’s operational expertise combined with its management skills and experience in customer services enables the group to deliver data and facilities management ensuring a connected world at all times

ITSCM (Disaster Recovery)

Data Centre Operations (24/7 monitoring)

Data Centre Facilities Consultation

Data Centre Facilities Upgrades

Open Systems Support Services (UNIX, LINUX)

Media Management

Deployment

Data Centre Hosting (incl. Co-location)

24© Telkom | 2016

The largest ICTService Provider

to the South AfricanRetail Space

One of the largest Industrial Solutions capabilities on the

continent

Full BusinessConsulting Capabilities

Leader in ApplicationServices, Application

Development &Application Outsourcing

Application Servicesprovides trusted application development capabilities supported by defined methodologies to plan, design, and build quality applications.

Energy & Industrial Solutions provides an in-depth understanding of the industrial sector enables us to provide stable and reliable ICT environments that are effective and efficient, improving production, maintenance, quality and inventory, bridging the gap between factory floor and the boardroom.

BCX has the largest pool of Industrial Solutions Engineers amongst its competitors and peer Systems Integrators (SI’s) – total of 99 people

Accredited as an Eskom Energy Services Company (ESCo) which allows us to develop anddeploy technology that will conserve power within the commercial and industrial environments.

Application Outsourcing manages the full life cycle of application development and application management for Enterprise and Corporate Clients

Services are focussed on creating a mobile platform and presence for customers.

ICT Planning and Integration (IPI): Using planning frameworks and methodologies to ”architect” enterprise solutions; establishing EA centres of excellence and capability; aligning ICT to business; planning ICT strategies andunderlying systems

Risk and Service Management (RSM): Optimising ICT processes; managing ICT Governance; improving IT service management; ensuring business continuity; identity management

Business Consulting provides Business Advisory, ICT Planning and Integration, Risk and Service Management Services

Business Advisory Services (BAS): Improving business performance and measurement, realising IT value, understanding changing business and operating models and managing change

Africa’s largest Retail IT POS Maintenance Service Provider

Providing services to 8 of the 10 Top 100 Listed JSE Retailers and most of our customer contracts have been in place for >15 Years

Presence in 74 locations throughout Southern Africa

Mirrored support provided to > 180 Retail Stores in Ghana, Nigeria, DRC, Angola, Zambia, Malawi, Mozambique and Uganda

Full turnkey specialised services provided

Retail IT Infrastructure Break Fix Services including Desktop Support Services

Workshop Repair Services

Warehousing

Specialised Procurement – value added supplier (BBBEE)

Project Management

Research and Development

Cabling

Provider of business process and IT related services to companies that operate within the Retail Value Chain

Provides SAP oriented services, Postilion and JDA-related and business process optimisation services to large and medium size retail businesses

Specialist retail supply chain, merchandise and store expertise focused on process and system optimisation

Flexible, innovative and dynamic managed Private Cloud services for SAP and other business critical systems

Proactive management and improvement of service delivery underpinned by our dedicated command centre and optimisation team

25 © Telkom | 2016

Glossary of terms

06

© Telkom | 2016 26

2G - Second-generation wireless telephone technology

3G - Third-generation wireless telephone technology

4G - Fourth-generation wireless telephone technology (also called LTE)

BYOD - Bring Your Own Device

Digitalisation - Integration of digital technologies into everyday lifethrough the digitisation of everything that can be digitised.

ICT - Information and Communications Technology/ies

IM - Instant messaging

IoT - Internet of Things

LTE - Long-Term Evolution (also called 4G)

M2M - Machine to Machine

Omni-Channel - An approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks-and-mortar store.

P&S - Products and Services

PBX - Private Branch Exchange

ROI - Return on Investment

R&D - Research and Development

SIP - Session Initiation Protocol

SLAs - Service Level Agreements

TPD - Telkom Product Development

UC / Unified Communications - the integration of real-time, enterprise, communication services

VPN - Virtual Private Network

XaaS - X as a Service/anything as a service

Telkom Business is a division of the Telkom Group organisation. We exist to serve the South African and African corporate; government and SME markets. Our passion is to seamlessly connect every business towards a digital future. Our solutions are offered end to end — ensuring that your business benefits from every economy of scale and superior service quality. Our solutions are customised by taking into consideration the role of the relevant technology trends; such as: fixed mobile convergence; mobility; machine to machine; big data; Wi-Fi; broadband; LAN; WAN; cloud computing; unified communications; digital and social media and others. Migrate your business into the digital future — contact Telkom Business today!

Business Connexion is one of the largest ICT services providers in Africa when measured in terms of turnover, assets under management and staff complement. It remains one of the leading South African cloud-based services providers with offices in South Africa, Namibia, Nigeria, Mozambique, Tanzania, Zambia, Kenya, Botswana, the United Kingdom and Dubai. The company employs more than 6 800 people on the African continent and generates revenue in excess of R6 billion a year.

For more information, please email tbsm@telkom.co.zawww.telkom.co.za/bigbusiness