Getting ready for AI and automation at scale

Telcos are increasingly enlisting gen AI to help transform their businesses, but successful change is dependent on more than technology, as Dan Rice (DR), Accenture’s Senior Managing Director, Communications and Media Industry explores in a Q&A with TM Forum.

TM Forum: How well is the telecoms industry doing when it comes to leveraging the potential of predictive and generative AI?

DR: As you’d expect, the industry is advanced in the use of predictive AI, given it has been around for longer. It’s being used to flag possible outages and forecast how consumers might respond to changes.

Telcos are rapidly adopting generative AI too. An early example is in automating customer service. Gen AI can understand what customers want and even their mood, and so can provide more relevant and sensitive responses. For example, we’ve helped one operator to use gen AI to improve their engagement with the youth market: applying it to better understand young consumers’ language and needs.

Another opportunity is the automation of networks, where gen AI can help to respond to changing market needs or infrastructure challenges.

But, of course, gen AI’s greatest value will be in producing new ideas, re-writing software or, creating new forms of personalized content for customers.

But the real value of gen AI will not just come in transforming these areas in isolation. Gen AI has the ability to make sense of all kinds of data and to use that data across many parts of the business. So, changes in customer demands can automatically trigger responses in product development or in network management. This is what we can get with gen AI at scale. It promises to transform entire end-to-end processes, creating unprecedented change and new value.

TM Forum: To what extent do telcos’ AI and automation ambitions demand a rethink of current approaches to data architectures and management, and why?

DR: Ask any IT executive in the telecoms industry and they will tell you that, even before AI and automation came along, they faced a long-standing challenge: the proliferation of new technologies. This has left them with poor ROI and high levels of tech debt – that is the cost of managing a fragmented landscape of legacy systems and pockets of data.

How can they be sure that they don’t end up with the same problems as they roll out AI and automation? How do they tidy up the complexity of today’s technology and simplify things for the future? We advise them to build a modern and flexible digital foundation that prepares them for whatever business needs or new technologies come down the track. We call it the digital core. It’s made up of cloud infrastructure, digital platforms and a modern data and AI backbone.

We’ve found that only 3% of companies have cracked the code on what it takes to build this foundation of core digital capabilities. But if they act, they will find it’s a virtuous circle: Gen AI will help create that integrated core of technology and data. And once that foundation is in place, it enables even greater AI adoption.

But it’s not just about tech. The most advanced telcos are fully aware that success depends on more flexible operating models – the organizational flexibility and processes that enable people to adapt to new forms of work and new ways of working.

TM Forum: How should telcos prioritize and structure their approach to ongoing tech-driven transformation, given the pressure to both reduce costs and increase revenues?

DR: We find that three approaches make a difference in building the tech foundation that supports any kind of tech-driven change. First, leading telcos are strong in all parts of their digital foundation, not just in some. That means they score well on building their cloud, their digital platforms and their data and AI backbone. Second, they also shift a certain proportion of their IT budget each year from maintaining systems towards innovation—a minimum of 6% on average. Finally, instead of moving as fast as they can, which can elevate the risk of yet more complexity and tech debt, they take a balanced approach, allocating approximately 15% of their IT budget to actively reducing that tech debt, including cleaning up data and taking old systems offline.

TM Forum: Do you think the adoption of predictive and gen AI will negatively or positively affect telcos’ ability to meet their sustainability targets and why?

DR: As we know, there’s the good and the bad. The data centers and processing power behind gen AI consumes massive amounts of energy and water. That said, telcos can certainly reduce their impact on the environment by using gen AI to accurately forecast the services and products they require from their supply chain; or to predict network performance to minimize energy use. Reaching sustainability targets is, in itself, a complex exercise in data intelligence. It stands to reason that AI helps produce accurate data intelligence on sustainability performance that prompts more responsible decisions.

TM Forum: How well are telecoms operators succeeding in changing the culture within their organizations? What are some of the factors that shape success?

DR: Telecom operators are used to change and disruption –from new digital-native competitors, customers and regulators. However, our analysis shows that while virtually all C-suite executives are dedicating more than 5% of their revenues to change projects, only 30% are confident in their change capabilities.

Rather like building that digital core telcos need to build foundational talent and culture capabilities to make change readiness a part of their DNA. That means investing in new skills and helping their own people adapt. But some of the most advanced telcos are going beyond that by innovating with behavioral science or with data and AI capabilities that allow them to understand the impact of change on their people. An improved understanding will help close the gap between workers who say they want to work with AI and leaders who think employees don't want to use it. Much comes down to trust, trust in the technology, sure. But also trust in the executives driving the change. That will call for new leadership skills, starting with well-communicated digital fluency on the part of business leaders.

Dan Rice will be speaking about the future of gen AI in telecom networks at TM Forum's Innovate 24 Americas event, which will take place September 24-25 in Dallas.