The Enterprise of Future: Telecom Industry Edition- Part IV

8 05 2009

(Discussion will continue with fourth trait of ‘Enterprise of Future’ i.e. ‘Disruptive by Nature’)

Telecom CEOs are putting more emphasis on business model innovation than CEOs in Media, Healthcare & Financial services, says IBM Study of ’Organization of Future: Telecom Industry Edition’. Seventy percent of CEO respondents plan to make serious changes into business model as compared to twenty three percent, who are planning to make only modest changes. 

There are three major types of Business Model Innovation considered:

A. Revenue Model Innovation: This model innovation considers rethinking how revenue is generated through new value propositions & new pricing models. Forty percent of CEOs are planning to bring revenue model innovation. This is the major business model innovation sought after by telecom CEOs in coming two-three years.

B. Enterprise Model Innovation: This model innovation deals with specializing & reconfiguring the business to deliver greater value through collaboration. Thirty percent respondents are rethinking about this type of business model innovation.

C. Industry Model:  This business model innovation deals with redefining an existing industry, moving into new industry or even creating an entirely new industry. This business model innovation is tougher as compare to other two models mentioned above and only fifteen percent CEOs are thinking about it.

In past few years, technology has evolved to an extent that it would be very difficult to define boundaries of operation between different industries like media, IT, advertising and communication. Today, we often see the integrated communication which is an evolved way to contact each other. Even if telecom CEOs aren’t looking at Integrated Communication as a whole bundle, the evasion by other industries into core business of telecom, has forced telecom CEOs to rethink about innovating their business models. But still percent of telecom CEOs who are serious about Industry model innovation are three percent less than overall average, a highly surprising fact.


The message is clear, only revenue model innovation won’t do the job in long term. If telecom CEOs are really worried about dynamics of industry, which are constantly under threat either because of regulators or competitor’s technology innovation (like Skype’s VoIP, Google’s Android, Microsoft’s Windows Mobile, or Apple’s iPhone etc), they need to put up enterprise model innovation along with revenue model, at work. Collaborating with other technology firms will enable them to develop new skills, enter new markets and improve the quality.

Should you evade other industries for extra dollars? Yes, you should e.g. collaborate with media firms, content provider, advertising agencies or even with software development firms for those extra dollars. This will be a perfect example of great mix of enterprise & revenue model innovation. When economy will be back in form, the pioneers will surely ripe the benefits of early move.




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