2017 presents a challenging year ahead for service providers. The demands of enterprises are changing rapidly and they have to decide where they should focus to drive new growth. In short, enterprises want service providers to deliver a more flexible approach, in particular to managed and network services, with a cost model and service performance that enables their own digital transformation. This allows them to compete more effectively in their new operating environment.
By identifying the areas in which enterprise demands remain unmet, service providers can prioritise the services that are being under-delivered. In 2016, Tata Communications commissioned a global survey of enterprises and service providers that revealed a gap between enterprise demands and service provider offerings – so what better time to look at the opportunities this void holds for service providers this year?
Filling the gaps
Our survey found that a third of enterprises have unmet demands across a range of services, with 37% saying that they could not get vertical industry offerings which are aligned with evolving business needs and market dynamics. These dynamics can be fundamental shifts in business models, delivery technologies or customer relationship management. The same percentage said their main service provider could not deliver the consulting and professional services they want, highlighting further the need for service providers to understand that their lack of action and evolution can have a negative impact on their customers.
Around the world, unmet demand varies between regions but there are a few common threads. For example, 53% of African enterprises say that their needs for vertical industry offerings are not being met by their main service providers, the largest of any region. Vertical industry offerings are among the top three concerns in Europe (38%) and MENA (28%).
There is an opportunity for service providers globally to build out their services to capture new revenue from existing customers while attracting new ones. Vertical industry offerings, for example, can drive growth in new markets where specific industries thrive. These solutions are evolving rapidly with new business models being introduced to rapidly undercut the existing modus operandi. Rolls-Royce is selling aircraft engine-time as a service rather than just shipping the engines and components. Service providers that cater to evolving business needs and move to subscription-based business models have an opportunity to play a key role as a vertical expert and long-term consultant.
The challenge for many service providers will be to overcome their own perceptions of customer needs and priorities. Recognising that a gap exists is the first step in tapping into new opportunities.
Although 65% of service providers see managed services as the strongest aspect of their service portfolio, only 30% of enterprises see it the same way. This gap shows that service providers have work to do in delivering managed services that enterprises really want. On the other hand, 47% of service providers believe unified communications and collaboration (UCC) is a strength while 31% of enterprises say they cannot get satisfactory UCC solutions from service providers. Therefore, service providers need to re-evaluate and reshape their managed services and UCC offerings to better match enterprise expectations. Providing examples of customer case studies, quantifiable ROI and an assessment of how specific business challenges can be overcome is a must.
On the other side of this are services that enterprises want but are not strengths for service providers. Around a third (30%) of enterprises say their primary service providers cannot deliver hybrid networks, while only 6% of service providers see the area as a strength. Service providers that can demonstrate expertise in hybrid or its advanced cousin, agile networks, and accelerate delivery to illustrate real savings and solution flexibility for customers will be ahead of a large majority of their competitors.
These unmet demands should drive service providers to act because, as our survey shows, they risk missing out in 2017 if they simply maintain the status quo. Rather than standing still, service providers must begin to develop services to meet the more complex and changing enterprise needs. However, to avoid falling further behind demand for newer services, they need a faster time-to-market and a more efficient way to deploy new services. It’s not just about technology introduction but aligning this with a changing business environment that enable customers to remain successful and competitive.
For these reasons, partnering will be crucial for service providers looking to capture new revenue streams in 2017. A strong partnership strategy, driven with collaboration with customers, will eliminate gaps in service portfolios and business models. Partnerships enable service providers to reduce the time between recognising opportunities and having services live and ready. It means they can look find partners to support them across a global ecosystem of technology services that enterprises want but aren’t yet getting. It is the smartest and simplest way to capture new growth in 2017.
How can service providers discover new revenue streams from global unified communications? Read Conor’s answer in a recent post.
This article originally appeared in Vanilla Plus.