In our transformational march towards the Digital Enterprise – the Value Ecosystem grows in importance. Fueled by the increasing importance of relationships to value propositions, the Digital Enterprise adds relationship management to its list of critical core competencies. This point was underscored at a Telecommunication Innovation Forum held by TCS in London last week. Perhaps no industry finds itself in the same place as this industry – both an enabler and victim of the digital world. As expressed by Keith Willetts, Chairman of TM Forum, this is truly a digital paradox. TM Forum is a global, non-profit industry association focused on enabling service provider agility and innovation. At the TCS event, Mr. Willetts described the various challenges faced by companies in this Industry:

• Extreme  pressure on cost management and exploiting  economies of scale
• IP networks dramatically reduce the barriers to entry for services, so core voice and messaging services are under attack
• The phone number does not equal the customer, and therefore brand loyalty is shifting

Mr. Willetts effectively described the broader issue facing most industries: the vertical integration that historically defined value creation is giving way to horizontal relationship ecosystems. An industry that relied on mergers and acquisitions to drive innovation and growth must now master the art of the relationship. Who does a company partner with to innovate and drive next generation value propositions? How can companies effectively manage those relationships? Can the company build the agility required to swap partners in and out as business dictates? These are only some of the questions facing companies across all industries, and they underscore my long held belief that collaboration excellence is the single biggest driver of future success (followed closely by analytic excellence).

In his presentation to a room full of Telco Industry Executives, Mr. Willetts outlined the ecosystem challenges facing the assembled group. The ecosystem is ultimately composed of three players:

1. Infrastructure players driven by economies of scale. The number of pure play infrastructure players is likely to reduce over time
2. Service providers driven by innovation and speed. The number of players in this tier is certain to increase
3. Infomediaries driven by economies of scope. There will be a small number of Infomediaries in  the information ecosystem

The question is: where in the ecosystem does the Telco play? Are they infrastructure providers that enable the other two players by leveraging their historical core competence? Some in the room thought you could make a decent living in this space. Are you a service provider, competing with or partnering with over-the-top companies? There were several in the room that embraced this thinking, choosing to avoid “Dumb Pipe” status by providing value added services. Lastly, is there enough room in the ecosystem for another Infomediary? Many in the Telco industry have yet to decide on their ecosystem position – and that will delay their focus on the broader value ecosystem. Determining required core competencies and optimal operating models are dependent upon a clear ecosystem strategy.

It starts with visionary leadership – something that has been lacking in this industry. From there, it will come down to the relationship management strength of the players across the ecosystem – which comes back to the digital paradox: The digital world that the Telco enables holds the power to enable collaboration excellence. It is through the effective use of innovation convergence (Mobile, Social, Cloud, and Big Data) that collaboration excellence will be enabled. As the Telco industry looks at their role in the ecosystem, can they enable this innovation convergence for their customers? Can they provide these enabling services? Time will tell, but instinct tells me that the Telco is uniquely positioned to play a big role in the digital future – can they step up and deliver?