The growing demand for digital content products and value-added services is turning communications companies into super-enablers of all things digitally delivered. The many promising new revenue opportunities available are creating a mediacosm — or a new market of converged communications, media and entertainment services. Mediacosm revenue opportunities are available by bundling traditional communications services with add-ons such as games, videos and Web applications. The emergence of this new market opportunity is driving communications and media companies to consider restructuring the core business processes they rely on to market, sell and deliver these products and services.
Managing this mediacosm is not without its challenges. Companies need secure, flexible business processes to collaborate with new value chain partners that can enable these emerging digital content products and value-added services. The goal for communications providers is to efficiently and effectively integrate these products and services from multiple content providers to enhance the depth and breadth of market offers. Companies can best take advantage of the emerging digital opportunity by first building a community of business partners and suppliers and then leveraging those connections through technology solutions to build revenue generating offers.
Get Ready to Get Complex
Gartner research predicts that “by 2015, complex relationships will be the norm between telecom service providers, their customers, equipment/device vendors, and applications/content providers.” Gartner says that “Telecom service providers cannot afford to continue clinging onto old business paradigms or current competitive advantages. Rather, they should start to consider how they can create relevant roles for themselves in the new, open ecosystem that will emerge.”
One way to create those new relevant roles is by improving collaboration with partners and suppliers in order to provide greater value to consumers as well as reduce costs. But making these changes can prove to be complex. Similar to leading retailers, communications service providers will then face the same issues of constant change and complexity from a business process perspective when it comes to integrating with new suppliers or partners. Rapid and regular changes will come in the form of new business integration methods and processes to support new partners and suppliers and compliance with new and ever-changing legislative and technology requirements. Companies need to be able to react to such changes quickly but with an effort level and cost structure that protects margins.
To become super-enablers, communications companies are focusing greater attention on partner community excellence — or building an extended community of business partners and suppliers to bring new products and services to market and enhance they are sold and distributed. New business-to-partner integration solutions can address these challenges of building extended partner communities by allowing for flexibility to respond to new integration methods and process quickly and insulate the business from the complexities of implementing new partners. Business-to-partner integration solutions enable companies to build new business partner ecosystems that support real-time collaboration between systems and people across enterprises. Further, such solutions enable companies to create new business processes that extend to multiple partners and suppliers. Critical to enabling such new processes is the ability to quickly on-board and off-board business partners and seamlessly connect events, transactions, and files from external partners with internal systems and processes using any integration method.
Once strong partnerships are put in place and integration capabilities are helping processes run smoothly and handle increased transactions, communications companies can then focus on selling new offers. There’s a market demand for freshness and the “next big thing” — so providers need to be able to get offers to market quickly to avoid customer churn and take advantage of consumer excitement for new offers.
Invest in the Bundle
Although it may seem like opportunities to up-sell customers are limited with the current environment, research has shown that the market for new add-on services is in fact not yet saturated. The challenge is offering a shopping experience that encourages the customer to invest in the bundle. A March 2008 survey of television customers by Mintel found that 45 percent of online respondents only ordered a standalone subscription television service despite so many additional choices available from their providers. While it seems simple to make these offers, communications providers must find a way to make the process of researching products and purchasing services easier to navigate despite the number of retail channels. The shopping experience for communication services is too complicated now for consumers to manage and is keeping providers from closing the sale.
In the mobile industry, the situation is a bit different. Wireless handset penetration is approaching 90 percent in the U.S., so these additional offers and features are now more important than ever to keep customers interested and engaged. Service providers need to offer the best movies, music and games that customers want while allowing content partners to self-provision, access self-help, and monitor data exchange transactions. Selling tools will enable sales and marketing teams to quickly aggregate product and pricing data into catalogs so it takes less time for them to get to market. The more quickly these features can be released, the more opportunity is there for the service provider.
Today’s “mediacosm” is both a blessing and a curse — the industry has reached the cutting edge of technology and consumers have more options than ever before, but that means a more complicated selling environment for providers that requires the right technology tools to manage the complexity. By leveraging integration solutions to build a solid business-partner community and the right selling solutions running on the back end, communications companies can make the most of today’s market.
John Konczal is a global industry executive of communications and media at Sterling Commerce.