The adoption of AI will be ineffective without the right operating models

AI offers telecoms operators a wide range of short- and long-term opportunities. It will lead to a smaller, better-skilled workforce that is able to enhance customer journeys and improve success rates and volumes. But AI adoption will be ineffective without the right operating models. A successful transition to an AI-enhanced business requires all aspects of the operating model to be optimised for that new world, as well as being ready to address the new challenges and risks that AI presents. The additional cyber-security risks and associated liabilities are a significant consideration, and new regulation will make executives personally answerable for failures. TMT operators therefore need to approach the adoption of AI as a holistic reimagining of their future operating models, rather than simply a minor upgrade to existing systems.

Transcript

Hello, I'm Paul Jevons, a Director in our Transformation practice. We help organisations with business and IT change programmes, we help them run processes, cyber-security and help them better understand and use the data that's available to steer their business.

AI is already an emerging technology, and we see that with some simple use cases in the industry, whether it be customer service chatbots or some marketing analytics, but it has the potential to really disrupt and add value across the whole value chain, from pricing optimisation, automating customer processes and actually managing networks in the future.

What should telecoms operators consider when adopting AI into their operations?

As with any technology-enabled change, companies need to look at the impact on the business and the business change with as much focus that they will put on the technology implementation. It's not just about optimising processes or reducing headcount. You've got to look at what it means for governance, for policy, and business controls. How much are you handing over to the system? How much are you retaining within the hands of individuals in the organisation? So for companies to implement AI really successfully, they have to take a step back and look at their target business operating model. Look at how that's going to change. Look at what new roles, new skills, new capabilities, new controls are required within the business. And then when they've got a clear view of their target business operating model, they'll be able to exploit AI much more efficiently and effectively.

Is AI solely about cost reduction or are there revenue opportunities for telecoms operators as well?

There are definitely revenue opportunities in addition to the well-publicised sort of cost and efficiency savings that AI can bring. Any organisation that has a digitally enabled, retail, highly competitive front end will be looking for ways in which AI can help them with channel pricing optimisation. And we're already talking to a number of companies to help them on that journey. We also know, though, that AI has the ability to enhance customer journeys, both in terms of sales journeys and service journeys, and can definitely improve success rates for things like Next Best Offer, Next Best Action, and all of this is going to, ultimately, deliver significant value into an organisation. But once again, that depends on not only the data that's available but also the flexibility of their legacy, core IT systems. And so to really exploit AI in that area, they're going to have to address the digital maturity of their core IT systems and the availability and cleanliness of their data.

How will AI affect the data protection and cyber-security challenges of telecoms operators?

The cyber-security landscape is going to continually change. We know that AI can be used for both attack and defence. We also know that AI has the potential to introduce significant strength in terms of real-time responses to real-time data on a huge scale. But actually, companies need to consider what's the implication for their policies and their governance when they're introducing AI into the business for any purpose. The risk of shadow IT is increasing. And so with the regulations that are coming around, such as NIS2 in Europe, it means they're really going to have to address the implications on their cyber-security programmes and enhance those where necessary.

What is your one key message to the TMT industry right now?

My message to the industry would be that, you know, AI has the ability to add significant value across the entire value chain, but it actually doesn't take away the responsibility of executives to understand and improve the core business fundamentals such that they can really benefit from AI.