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Increasing agility to fuel growth and redefine competitiveness in the communications industry

Communications companies are focused on cost reduction to reinvest for growth, but they are challenged by execution.

Overview

Communications companies are undergoing dramatic industry change. Under pressure to adapt traditional business models and drive new value propositions for customers, they are beset by market uncertainties, complexities and threats from non-traditional players.

Communications leaders need to fund new investments to reduce increased debt and manage profitability spikes. They must transform their core network infrastructure to extend existing capabilities. And they must ride the wave of digital disruption from new technologies—from Everything-as-a-Service to the Internet of Things.

But while more than two-thirds of communications companies acknowledge that improving competitive advantage is the key to cost reduction, less than one-fifth deliver—lagging behind the average of other industries. With confidence low that their leadership has the right initiatives to achieve cost reduction targets, communications executives must fix the critical link between cost reduction and their growth strategy.

Key Findings

Communications companies face a number of challenges that are hindering their efforts to connect cost reduction efforts with a strategy for growth:

Inflexible operating models

Inflexible Operating Models

Only 21 percent of communications executives have complete confidence that their operating model can adapt rapidly to the market. Even less—just 15 percent— strongly believe their operating model is aligned to fuel strategic growth.

Difficulties in execution

Inflexible Operating Models

Forty-two percent of communications executives expressed limited success or difficulty in identifying and eliminating value-led investments and activities. Execution is further hampered by their operating model, which only 15 percent of executives rate as highly flexible.

Leadership misalignment

Inflexible Operating Models

Communications executives are uncertain about their leaders; 38 percent said leadership alignment is a barrier to advancing their operating model. Concerns over that misalignment may be due to uncertainties—64 percent said identifying the right areas to invest is challenging their organizations.

Recommendations

The time is ripe to prioritize cost reduction and reinvestment and take action to fuel profitable growth.

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Organize for growth: Understand where the market and customers are going next. Seek out ecosystem collaborations to drive growth. Foster partnerships and undertake the right mergers and acquisitions to build capabilities that support cost reduction and increase internal agility.

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Manage the journey: Align leaders and people on the true cost of sustainable profitability by creating a culture that is centered on continuous cost management. Eliminate siloes and encourage cross-functional behaviors to better understand the end-to-end cost to serve.

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Digitize for growth: Take advantage of process automation and cognitive intelligence capabilities to virtualize customer care and enable customer self-service, reducing cost and increasing competitive advantage. Use analytics to better manage the business and understand the customer base.


Authors
Chloe Barzey

Chloe Barzey
Managing Director – Accenture Strategy, Communications, Media & Technology

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Raúl Macías

Raúl Macías
Managing Director – Accenture Strategy

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Terry Steger

Terry Steger
Managing Director - Accenture Strategy, Communications, Media & Technology

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