Amdocs leverages OSS and BSS to deliver digital transformation. But it faces big technology rivals, says Seth Ulinski, senior analyst at TBR.
The digital economy requires enterprise vendors adjust analog business models, and vendors must address immediacy and relevancy demands.
These market dynamics create challenges for communications services providers (CSPs), in particular, which are simultaneously pressed to improve customer experience and identify new revenue streams.
To remain competitive in this new paradigm, CSPs embark on digital transformation initiatives with IT services firms helping integrate front- and back-office operations. To deliver a seamless experience for consumers, CSPs are making investments that enable two-way data flow across areas such as billing, customer relationship management (CRM), content management and marketing.
During a client session at the 2016 Amdocs Executive Digital Summit, Telefonica CIO Phil Jordan shared his team’s philosophy of taking a holistic approach to the customer continuum: “The back office cannot be analog; the customer will see right through it.” This sets the stage for IT services firms such as Amdocs to extend business support systems (BSS) and operational support systems (OSS) projects with CSPs into digital transformation engagements, which impact the entire customer continuum.
Amdocs’ long-standing ties with CSP clients, including management of their valuable first-party data (e.g., CRM, billing), provide a path for Amdocs to enter larger-scale digital discussions. Additionally, key telecom players such as Verizon and AT&T are making aggressive moves to acquire advertising technology and digital media assets, driving demand for Amdocs’ solutions.
The digital marketing services (DMS) firms that enable enterprise use of digital advertising and marketing technology play a critical role in digital transformation for CSPs and other verticals. TBR estimates DMS to be a $40 billion market in 2016, growing approximately 20 percent year-to-year through 2020.
In addition to traditional digital agencies, DMS is attracting global systems integrators such as Accenture, IBM and Deloitte and management consultancies such as McKinsey, PwC and BCG. While Amdocs may periodically compete with these firms for digital transformation engagements with CSP clients, TBR believes a more frequent scenario is partnering, given longstanding relationships and business experience.
Competition may intensify as Amdocs ramps its advisory services practice to drive digital transformation conversations with CSPs and prospects in other verticals, such as financial services. Even if Amdocs does not secure a primary role in digital transformation contracts, a combination of services and technology allows it to compete for sizable subcontract roles that include advisory services, consulting and business process outsourcing (BPO).
Domain expertise and strategic alliances present digital opportunities During its nearly 35-year history, Amdocs has evolved from providing support services for clients operating wireline and telephony directory businesses to mobile communications and digital content delivery. As a services-led organization, Amdocs maintains an open ecosystem supporting APIs in delivery of its core OSS and BSS solutions. By continuing to support complexities and business needs of CSPs, Amdocs has established a roster of clients that includes global heavyweights such as AT&T, Telefonica and Vodafone.
As Amdocs expands its digital portfolio to include more back- and front-office functions, such as CRM and marketing, respectively, it forges strategic alliances with enterprise marketing cloud vendors such as Adobe. As a result, Amdocs is helping clients deliver contextually relevant messaging based on an “elastic customer profile,” accomplished through integration with Adobe Experience Manager (AEM).
Adobe, through its marketing cloud, is one of few vendors with a suite that spans advertising and marketing. This type of suite simplifies complexities across the two converging, yet historically siloed, functions. Success with AEM will likely pave the way for additional integrations between Adobe and Amdocs, increasing revenue opportunities for each. Other strategic partners highlighted included YouTube, Google’s streaming video platform and 247 Inc., a next generation customer service and engagement specialist.
The YouTube alliance primarily benefits audiences in developing markets, which may limit viewing due to concerns in those markets around data plan consumption. Amdocs integration with YouTube allows CSP clients to notify users while in YouTube of their app usage. It also allows CSP vendors to explore alternative plans to drive streaming of media, such as during off-peak hours.
Each of these benefits YouTube’s advertising business. 247 Inc. improves the customer continuum via ongoing investments in areas such as natural language processing and virtual agent technology, each of which augment its legacy BPO customer service capabilities. The ability to understand customer intent and route inquiries accordingly is paramount to a CSP landscape that is hypercompetitive.
