The UK telecoms market is going through a radical change at present as a result of competition, technology and customer demands. For a CIO within the telco space it is an interesting time, as Plusnet CIO Mark Dundon explains.
1: The BSkyB vs BT affect
The UK telco market is a very aggressive place at present. BSkyB has had exponential growth since it’s divergence from media and arrival in to the telco arena in 2006 and as a consequence become a threat to BT. In reaction, the recent aggressive investment into TV by BT (circa £1billion in to BT Sport and a further reported £897m in to Champions League broadcast rights) are strong examples of competition heating up.
2: Better broadband
The evolution of broadband technology over the last decade has increased market competition and dramatically shaped customer behaviour and expectations. The consumer has undoubtedly benefited as overall speeds and reliability of broadband have increased whilst prices have decreased.
3: Demanding customers
With increased performance and market competition, customers are becoming increasingly demanding; expecting unlimited data usage products at high speed with high reliability at a low cost.
Customers are also increasingly expecting bundled packages from a single provider; telephony, TV, and broadband, commonly known in the industry as “triple play”.
4: New market entrants
Consequent innovation with the advent of over the top (OTP) services has further enhanced the richness and arguable social dependency on broadband connectivity via OnDemand entertainment from the likes of Netflix, LoveFilm, SkyGO, BT and TalkTalk YouView; and BBC iPlayer who of course were one of the earlier forerunners of these type of services.
5: Utility connection
Thinking of how consumers now use mobile and tablet devices, laptops, gaming consoles, we are now in a heavily digitally connected world. It is no surprise that fixed line broadband is now considered a utility rather than a nice to have, and depending on the line speed capability to your home, particularly the availability of fibre speeds of up to 80MB, the salability and price of your home can be heavily influenced upward.
There is also a political agenda. Government backed investment, legislation and encouragement within the market for expanded broadband geographic reach as well as increased data bandwidth capacity. Recent investment in fibre roll out through BT Openreach is a clear example of the latter. The political objective is to assist economic growth boosting Britain’s GDP through increased innovation, support to businesses, not least SMEs, and education.
The CIO’s role
What do all of the above mean for a CIO? As the CIO of Plusnet PLC it is an exciting market to operate in. Market conditions and consumer behaviours consequently demand excellence from technology to directly influence the success, or failure, of a technology driven company. It is therefore critical that a CIO in this industry is fully cognizant of the market context, and have the capability to dive in to and understand the technology, and then the foresight and ability to apply both of these to then identify, lead and deliver transformation to meet the demands and needs of the business in the market context operating in with step change in commercial growth. It is also essential to be sensitive to financial constraints and expected ROI whilst delivering such transformation.
I can share with you an example. When a company grows exponentially it places significant demand on the provision of technical capability. From operational stability, to the creating of products and online services to management pre- and post- sales customer experience, not least supporting internal call centre agents with tools fit for purpose and scale.
It is critical for a CIO to honestly critique current status and make plans for change, not in isolation, but to feedback to the board and whilst also understanding the needs of the business financially and in market context, truly shape and drive the strategy, not only technical strategy, but the overall business strategy. The results can be devastatingly positive. Throughout Q3 and Q4 2012, independent market statistics will verify a clear step change in market growth for my organization Plusnet, and consistent performance since. Plusnet moved to become the third fastest growing telco behind Sky and BT, ahead of Virgin, TalkTalk, O2 and EE.
Transforming technical product capability, internal sales call centre agent tooling and the online customer sales journey, resulted in an overall step change in net customer growth, largely doubling sales with customer acquisition statistics in per cent terms of 14 times that of share of voice (SOV) in marketing spend against other competitors in the market place, increased online conversion performance, and a significant swing in online verses inbound sales. Online customer acquisition is much less expensive than inbound and therefore improves overall EBITDA.
The best way I explain the role of CIO, from my experience, is CIOs act as the glue to pull together the needs of the various business pillars (marketing, products, finance, technology) to interpret and then deliver capability to drive growth.
Having a seat on the board and the ability to directly influence and shape strategy based on capability and transformation is a very challenging and demanding, but very rewarding and exciting position.
The challenge for the CIO role
Prior to Plusnet I spent over 12 years in the financial services industry. I was involved in a number of innovative technology driven products, particularly during the dotcom boom, such as the delivery of TV banking using the Sky platform and global internet banking. Despite these achievements, IT was very much, and in many respects still is, considered as a back office service. Strategy is delivered top down by those in commercial roles, IT are given specific mandates to deliver.
At Plusnet, we operate in a much more IT aligned manner, with technology driving strategy, not the other way around.
In terms of years, I don’t yet consider myself an experienced CIO, and this is an important point I would like to make. Despite the commercial successes with the collaboration from the rest of the board I have been privileged to experience in such a relative short space of time over the last two years, I recognise that I am not perfect and I still have much to learn. This is in my opinion and another critical aspect of operating as a CIO - never be complacent. There will always be a demand, market conditions change. Competition changes. Technology changes. Going forward, success or failure of a business I believe will be increasingly down to how quickly such changes can be anticipated by the CIO; leveraging the experience, and both technical and commercial attributes that a CIO needs to have, and yielding constant transformation to change and adapt. To exemplify this point, despite the commercial success of the described transformation, that is only phase one of a three phase strategy. Phase two is currently in progress.
The majority of CEOs have mostly risen through the ranks of the financial or commercial and marketing disciplines. I would expect in future more CIOs become CEOs, which would add a third dimension to that leadership blend. The increasing trend of CIOs taking up MBAs is supportive of this assertion, and it is one that I have personally experienced and without question so far benefited from.
The stereotypical IT Director, plain, highly technical and somewhat geeky, can’t easily converse or do numbers, is truly being confined to yesterday.
About the author:
Mark Dundon has been CIO for the last two years and was previously a transformation leader for HSBC.