It’s an exciting time for the telecom industry, depending on whom you ask. Some may view the decline of traditional sources of revenue as a cause for alarm. McKinsey & Company noted that over-the-top media providers have started to undercut telecom voice and messaging services. Others will argue that this uncertainty simply sets the stage for telecom disruption, creating new market opportunities for companies offering up innovative solutions.

In the coming years, forward-thinking communications service providers (CSPs) will be able to use emerging technologies like 5G networks, gigabit fiber networks and the Internet of Things to generate new services and expand their customer base.

That is, if they can first overcome growth barriers that prevent many CSPs from expanding operations. Both small startups and large industry veterans face a number of issues that could stand in the way of rapid scalability and keep them from capitalizing on market opportunities today and in the future.

Headcount costs make expansion untenable

Tapping into a new market and building out CSP networks often requires hiring additional staff to handle everything from managing backend IT systems to supporting customers face to face. In particular, companies may need to bring in workers with specialized digital skills that can help jumpstart innovation, creating new services to improve capabilities and broaden operational footprints. According to Ernst & Young, 51% of telecom operators believe a lack of digital skills stands in the way of organizational transformation.

That comes at a major cost, however, and it’s one that CSPs may not be able to afford. After assessing their capabilities, potential market opportunities and the price tag that would come with building out headcount to support organizational growth, company leaders may decide that the expenses would be too much to bear. Rather than rapidly scale up resources and aggressively target new markets, they take a conservative approach, letting potential revenue slip through their fingers.

CSPs don’t necessarily need to add to their headcount in order to facilitate expansion, though. In many cases, new employees are brought on to manage workflows and processes that could be automated with relative ease. While there is some upfront investment required to implement automation, it pales compared with hiring and onboarding new staff members. Automated systems can take on workloads that would otherwise necessitate several employees to manage, letting companies do much more with far less.

Manual processes have been left i the dust.

Manual workflows prevent scalability

Automation isn’t just a cost-saving measure; it supports rapid scalability as well. Manual processes and workflows are efficiency killers, requiring staff to spend an enormous amount of time conducting them and checking that everything runs correctly. It’s a horribly inefficient way of doing business, but for many organizations, it’s just how things have always been done.

In the digital era, CSPs need to be fast, flexible and agile – all the things that manual workflows are not. Take billing, for example. Manually producing invoices when services are turned up slows down the billing cycle and increases the amount of time needed to put revenue back into your organization. Not only does it take more time to conduct these workflows, but the processes themselves are incredibly error-prone. A simple mistake could delay the entire billing cycle and require extra work to go back and correct.

CSPs simply cannot scale up quickly when they rely on manual workflows. As a result, they may miss out on new market opportunities because their internal systems are unable to keep up with expansion demands.

Replacing time-consuming manual processes with automated systems will provide the agility to expand into new markets and reach new customers without putting incredible strain on internal resources. In addition, CSPs will encounter fewer processing errors with their more accurate and streamlined processes.

Regulatory compliance concerns stymie growth

Compliance issues are nothing new in the telecom industry, but recent years have seen a massive uptick in the development of data privacy and security regulations. The EU’s General Data Protection Regulation (GDPR) set a new benchmark for data privacy controls when it went into effect in 2018, and government agencies across the globe have begun to follow suit.

The California Consumer Privacy Act (CCPA), which took effect on Jan. 1, 2020, and it will establish data management requirements similar to GDPR’s detailed guidelines. CSPs that are unable to comply with such regulations may find their growth opportunities limited.

Working with vendors that adhere to the latest industry best practices will help clear away regulatory obstacles and keep CSPs in compliance with applicable regulatory requirements.

Outdated legacy systems are stuck in the past

Many CSPs have been in business for years, and over that time, what was once cutting-edge IT infrastructure has become outdated. Legacy systems may have been the perfect solutions at one point in time, but it’s unlikely that they are able to meet today’s telecom demands.

For one, they are overwhelmingly on-prem systems, preventing organizations from tapping into the inherent scalability of cloud-based platforms. The cloud allows for on-demand, dynamic resource scaling, letting CSPs build out their service delivery capabilities at a moment’s notice to meet increasing customer demand. They can also wind those resources back down if a surge in user activity has ended and demand has gone back down to normal levels.

On-prem legacy systems don’t have that kind of flexibility, and expanding their capabilities often requires significant infrastructure and hardware improvements. Needless to say, that would be a time-consuming and expensive proposition.

Many legacy systems have also been custom-built over the years, adding on new integrations that create a complex web of platforms and applications. Uncoupling all of those integrations to implement a new solution that better supports organizational growth could be extremely difficult, and will only get more challenging as it becomes more customized.

Not to mention, the underlying operating systems and platforms that legacy systems run on may no longer be supported by either the original developers or the latest software solutions. With no way to incorporate the best applications and platforms available today, CSPs will effectively be stuck in the past.

It may seem like a difficult step to take, but it’s in the long-term best interests of CSPs to replace outdated legacy systems with cloud-based solutions that are more flexible and scalable.

Break through growth barriers

Don’t let growth barriers prevent your organization from capitalizing on new opportunities and increasing your revenue. IDI Billing Solutions has the telecom industry experience and cloud-based billing, automation and workflow solutions to help any CSP build out their services and reach new customers. Contact our expert team today to find out how we can help.