In the face of declining voice revenue and weak data growth, transformation has become the main means to ease the current pressure.
What is digital operation?
So what exactly is the digital operation? It can be summed up as, the aim of digital operation is to be a leader in the digital world (environment?), with the ability to aggregate the products and services of partners, enabling a series of business IT capabilities, to provide one-stop product service experience for the customer.
With the rapid development of the internet, the digital world has become richer, and more and more people, objects and things are being connected to the Internet.
Just as in the real world, the digital world is driven by the following four roles: producers, consumers, managers and partners.
producer can reasonably use the digital value created by the manager to create the platform for digital goods, services planning and production. In the process of digital operation, the producer can comply with the rules and policies created by the manager for the digital economy.
In the digital world, consumers are the presupposition of the existence of value creation process. They are willing to participate in the economic consumption activities of the digital world.
Managers provide services for the digital world in which they have constructed, manage and maintain the order of the digital economy. By using policies, rules and tools to regulate and allocate resources effectively, managers attract more producers and consumers. Managers need to be responsible for the healthy development of the digital world economy. They are the interlink bridge between the digital world and the real world.
To sum up in one sentence: digital operation is the management of the digital world, by integrating the business processes of multiple producers or partners into a whole integrated and consolidated business process.
The four major characteristics of digital operations
Based on the above description of digital operations, the main features of digital operations include the following aspects.
1. Massive digital goods and services
Digital goods and services, as well as digitalised goods and services will become the main products and services produced by suppliers in the digital world. Digital goods and services include music, video, movies, internet news subscriptions, etc.
Digitalised goods and services include any goods and services that are sold online and subsequently obtained offline, for example, a teacup, a pencil, a month of domestic service and so on. Any product in the foreseeable future will be digitised: as small as a bottle of mineral water, or as big as a house. We can foresee that the category of digital goods will grow to be very rich and diversified.
The management of mass production of goods and the ability to deal with the vast numbers of transactions are the basic requirements for the future billing system. Product management includes support for one-time-transactional-based products and services, as well as periodic-transactional-based products and services. The billing system must be capable of enabling operators to produce vast quantities of goods and services, as well as to manage mass production of goods and services, for the whole industry.
As operators embark onto vertical industries, the system would require them to support huge volumes of transactions. The management of the vast numbers of charging events and the processing of ultra-high business concurrency, are the basic requirements of the future revenue management system.
According to Zhang Zhidong’s understanding, the standard definition for “massive” should be : over 10 million users could be online at the same time, the system could process over 10 billion index simultaneously and bear or store data over 100 P at the same time. Therefore, this determines the future of the software architecture, which should not just depend on increases hardware capacity to support the demand of massive processing.
2. One-stop online business experience
Any role in the production and consumption activities within the digital world must be able to carry out activities independently and functions such as self-help, self-registration, purchase, production, payment, shipping, return of goods, complaint handling, etc. should all be capable of being handled online.
The managers of the digital world are able to link the business processes of multiple partners and producers with the ability to support one-stop based customer experience, regardless of how many business entities are involved. Thus, a manager’s support system and equipment, as well as partner & OTT system should collectively be able to support such one-stop-based services.
In the traditional telecom business, a BP is collectively completed by the operator’s support system and network equipment. The support system and network equipment are both owned by the network operators themselves.
Since the rise of the mobile internet, a business process initiated by customers from smart terminals has increasingly crossed over the APP and IT support systems provided by multiple operating entities.
In the process of building their own digital world, operators and their partners, should be able to share and collaborate the data and IT/CT capabilities which they owned respectively. The requirement for a revenue management system is product being able to provide service ability. Examples are: the externalisation of account capabilities, the openness of computing power and the ability to allocate tariffs and so on.
3. Intelligent operation
Any digital goods and digitalised goods need to be consumed by consumers in the real world. In this process, both the go-to-market and consumption of goods/products will produce a lot of data. These data need to create added value and be able to support the operators to make the right business decisions and produce product go-to-market strategy based on the results of the data analysis.
The current revenue management system of telecom business in the industry is not equipped with such intelligence capabilities. Some vendors simply use big data as a built-in reporting capability. However, software products with a large amount of data can carry out intelligent learning and analysis, and these have increasingly become the basic capabilities of product.
When carriers launch new products and packages, usually they would want to know what revenue potential their new products and businesses are likely to generate, and how lucrative the market potential will be. According to the analysis of a large number of historical data, making the product possess such capability will offer significant competitive differentiation for that product.
The ability to present the operator’s revenue stream through statistical charts, and eventually to discover any potential problem and provide advice with AI capability, will be a key element in formulating the ultimate goals for building an intelligent revenue management system.
4. Dynamic changes of price during transaction
In the traditional trading model, the price can be forecasted in the process of the transaction, and the affected factors are reduced. Even in the more complex telecoms business, price adjustment is less dynamic (only if the cumulative consumption reaches the threshold, will there be a small number of dynamic adjustment costs, such as discounted pricing).
But in the transaction process within the digital world, dynamic price adjustment has become the norm. Many dynamic scenarios such as group bulk purchase, second-spikeshopping and bargaining are overly filled in the trading process. In addition, in processes such as internet car reservation services, the price varies with the dynamic change of factors such as the weather, traffic situation and so on.
For future billing software, the pricing results should support adaptability to dynamic changes, especially during the process of customers’ service experience, and they should support realisation with the dynamic change of price.