DIGITAL EXPERIENCE INDEX: MEASURING THE DIGITALISATION OF CONSUMER EXPERIENCE

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1 analysysmason.com RESEARCH STRATEGY REPORT DIGITAL EXPERIENCE INDEX: MEASURING THE DIGITALISATION OF CONSUMER EXPERIENCE DR MARK H. MORTENSEN and ATUL ARORA

2 About this report This report describes the methodology behind Analysys Mason s February 2017 release of the Digital experience Index (DXi). The DXi measures the degree to which communications service providers (CSPs ) operations are digitalised from the perspective of their consumer customers. The report also provides recommendations on how CSPs can use the index in their operations planning. It is based on several sources: Analysys Mason s internal research on the user experience provided by CSPs worldwide, gathered from: publicly-available information interviews with selected customers information from vendors their implementations interviews with selected CSPs that have completed the more complex version of the evaluation. KEY QUESTIONS ANSWERED IN THIS REPORT Why should a CSP measure its progress in providing a digitalised experience to its customers? How can a CSP determine its position relative to its competitors in providing a digitalised experience? What are the key aspects of providing a digital experience? Which are the top-five CSPs based on customers digital experience? WHO SHOULD READ THIS REPORT Executives of CSPs that intend to provide consumer customers with a rich digitalised experience to gain a competitive advantage over other CSPs or to compete with other digital players. Chief Digital Officers (CDOs) and their staff who are seeking to upgrade the digital experience offered to consumers through IT projects. Vendors of systems that can enable CSPs digitalisation of the user experience. 2

3 CONTENTS EXECUTIVE SUMMARY DXi MODELS SCORING METHODOLOGY FOR DXi MODELS PATTERNS IN DXi SCORES WORLDWIDE ABOUT THE AUTHORS AND ANALYSYS MASON 3

4 SMALL (<25 million) SUBSCRIBER BASE MEDIUM (25 75 million) LARGE (>75 million) Digital experience Index: measuring the digitalisation of consumer experience Executive summary The Digital experience Index (DXi) provides a way of measuring the degree to which consumers experiences of investigating, ordering or seeking support for the traditional and digital services provided by their CSPs are modern and digitalised. Nearly all CSPs state that providing such an experience is critical to their future business, but few rigorous methods of measurement have been available. Figure 1: Simplified results of the Analysys Mason Digital experience Index 2Q17 The DXi provides a way of measuring the experience a consumer has in dealing with a CSP during the entire customer lifecycle, which is critical to understanding the CSP s competitive position. CSPs should use a method such as this in their business and competitive planning to assess potential new projects. The DXi model provides this intelligence to a CSP at low cost through both an approximate self-assessment process and a more detailed questionnaire. Digital experience Index 2Q17 AT&T Etisalat Singtel/Optus Swisscom Telefónica Group However, the DXI does not provide: a replacement for traditional customer satisfaction scores such as CSAT and Net Promoter Scores (NPSs) a measure of overall business success in providing services a measure of a user s service experience in using a digital service. 14 more CSPs LOW Swisscom PLANNING BEGINNING TRANSFORMING DIGITAL MATURITY DIGITALISED HIGH Source: Analysys Mason 4

5 CSPs believe that becoming digital service providers is critical to their future, but the transformation process is not well understood CSPs need to plan their transformations into digital service providers (DSPs), but currently lack the tools to do so. The customer experience that CSPs provide to consumers has traditionally been poor, with NPSs often in the single digits. The rise of new Internet-based players, such as Alibaba, Amazon and Netflix, has exacerbated the situation. These companies have raised consumers expectations for frictionless commerce and support to a level far beyond that provided by most CSPs. Meanwhile, CSPs are attempting to move into new digital services, where they not only face competition from other traditional CSPs, but also from new competitors. These competitors have new services, software platforms and operating paradigms that allow them to be more agile and support lower operating costs. CSPs are virtualising their networks and building completely new OSS infrastructures to meet this challenge. There are three critical aspects to becoming a DSP: digitalising operations, providing new digital services and virtualising the networks (Figure 2). This report focuses on the first of these the digitalised operations that CSPs must provide for both their traditional and new services. Figure 2: CSP-to-DSP equation with the digitalising operations aspect highlighted CSP DSP = Communications service provider A service provider with digitalised operations Digital service provider A provider of digital services D(SP) + (DS)P vngn Supported by an agile, virtualised next-generation network Source: Analysys Mason 5

6 The DXi provides a method of measuring a CSP s current position on, plans for, and progress towards providing a digitalised user experience A strategic direction can only become a business goal if there is a method of measuring progress. The DXi provides a method of measuring the digital experience that a CSP s current operations systems and procedures provide to a consumer. Most measurement methodologies (such as NPS) are based on KPIs and therefore only measure the final result of actions. In contrast, the DXi is also designed for use during the planning stages of a customer experience project it takes into account features and functionality that have already been proven to be effective in the industry. Figure 3: The 3P focus of Analysys Mason s DXi research. Position The DXI therefore can be (and has already been) used: to identify a CSP s position relative to its competitors in providing consumer customers with a digitalised operations interface DXi to measure progress in providing a more digitalised experience to evaluate plans for new BSS/OSS technologies on the basis of how they will improve the digital experience. This report provides background information on the assessment methods: a simple first-order assessment (DXi-1), a selfassessment (DXi-SA) and a full cooperative assessment (DXi-2). Plans Progress Source: Analysys Mason 6

7 CONTENTS EXECUTIVE SUMMARY DXi MODELS SCORING METHODOLOGY FOR DXi MODELS PATTERNS IN DXi SCORES WORLDWIDE ABOUT THE AUTHORS AND ANALYSYS MASON 25

8 About the authors Mark H. Mortensen (Research Director) is the Research Director and Practice Head for customer-facing systems in Analysys Mason's Telecoms Software and Networks research stream. He is also the lead analyst for the Digital Experience research programme. His interest areas include the conversion of CSPs to modern DSP operations, the effect of network virtualisation on operations, and the evolution of software architectures in the cloud world. Atul Arora (Senior Analyst) is the lead analyst for the Customer Care programme and a contributor to the Digital Experience, Software Forecast and Strategy and Telecoms Software Market Shares programmes. His areas of interest include the digitalisation of CSPs' customer engagement systems, omni-channel commerce and care and CSPs' use of social media. Atul also works on custom projects for telecoms operators and vendors, which include providing strategic advisory and undertaking market assessment work. He holds an MSc in Neuroscience from University College London and a bachelor s degree from Jaypee University (India). 26

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12 PUBLISHED BY ANALYSYS MASON LIMITED IN JULY 2017 Bush House North West Wing Aldwych London WC2B 4PJ UK Tel: +44 (0) Registered in England No All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. Figures and projections contained in this report are based on publicly available information only and are produced by the Research Division of Analysys Mason Limited independently of any client-specific work within Analysys Mason Limited. The opinions expressed are those of the stated authors only. Analysys Mason Limited recognises that many terms appearing in this report are proprietary; all such trademarks are acknowledged and every effort has been made to indicate them by the normal UK publishing practice of capitalisation. However, the presence of a term, in whatever form, does not affect its legal status as a trademark. Analysys Mason Limited maintains that all reasonable care and skill have been used in the compilation of this publication. However, Analysys Mason Limited shall not be under any liability for loss or damage (including consequential loss) whatsoever or howsoever arising as a result of the use of this publication by the customer, his servants, agents or any third party.