Sunday, November 27, 2022

Kian Gould, CEO and Founder of AOE

Kian Gould Inside Telecom

Kian Gould is the CEO and Founder of AOE and is responsible for strategy, vision and growth of the company since 1999. AOE develops digital business, E-Commerce and marketplace solutions based on open source technologies. Gould is a regular speaker at many global conferences, and a well-known expert in global E-Commerce, telecommunication, airport digitalization and agile management.

You established a long-standing partnership with Deutsche Telekom. What are the key elements for a superior telecom customer experience?

We started working with Deutsche Telekom twelve years ago, when they had just launched their secondary brand congstar into the market. The vision of congstar was to become an attractive brand to a younger generation of mobile users that wanted the best network but more flexibility than the flagship carrier was providing; putting the power in the hand of the user. The motto was “what you want is what you get”. This required a complete rethinking of telco architecture for this new mobile virtual network operator (MVNO). Allowing customers to change their contracts anytime within the billing cycle, adding products, removing products, etc., meant the need for a never-before-seen flexibility in architecture from campaign through commerce to provisioning and billing. It was an amazing opportunity for AOE to build a new generation telecom E-Commerce framework from scratch. Over the years, more and more units within Deutsche Telekom wanted to rebuild and modernize different parts of their infrastructure and so our projects spanned from innovation projects for T-Systems-customers in the automotive sector, to building the new headless frontend framework for the main flagship E-Commerce platform to assisting with Deutsche Telekom’s biggest digital hub in charge of FTTH (fibre to the home).

What we have learned throughout the years is that there is major frustration from customers if a telco shows that they are not flexible and lock you into static and long-term contracts. Indeed, there is nothing more frustrating than having to find the right person within a giant organization to fix your problems. Many of the projects we have been working on have had a major impact on improving processes, customer satisfaction and flexibility and have enabled e.g. congstar to win best mobile carrier in Germany for nine years in a row. Our highly adaptable architecture solutions that we have co-developed with Deutsche Telekom and congstar over the years have led to superior customer and service experiences. One great example worth mentioning here is that congstar is one of the few telcos that enable customers to cancel their contract with one click. As a customer, it feels great knowing that your provider wants to make it easy for you and not lock you in by cumbersome processes – waiting for hours on customer hotlines. All these initiatives have also meant a major reduction in call centre- and support costs and ticket escalations.

What do you consider to be the most pressing technology issues in telecom customer service and management?

To be frank, the telco business is a business that requires significantly leaner, faster and more agile software and development processes than the majority possesses. This has led to MVNOs taking over significant aspects of the market as they offer more customer-centric and flexible solutions without the burden of running and maintaining their own networks. Flagship telcos cannot leave this playing field to innovative MVNOs and need to innovate at a much faster pace. With much of the market becoming commoditized, innovation through convergence products, higher contract flexibility and bundling are the future. These require very different commerce, provisioning and billing systems that largely don’t exist in today’s telcos or are architecturally so complex that new features take months if not years to roll out. So, in most cases, telcos need to and have started to look at how they can decouple their systems more, work with microservices, more flexible agile development teams and methods, DevOps, etc. And as pioneers in those sectors or agile IT, we are often asked to help with those transformations from the inside. Not only as consultants who make suggestions but as agile transformation teams that work hand-in-hand with internal teams. Furthermore, telcos would also greatly benefit from taking advantage of our solutions, which can be flexibly integrated into existing BPM- and CRM-systems such as AAX and Salesforce Vlocity.

Where do you see AI/ML taking a foothold in telecom process improvements?

There is a huge amount of work that happens within a telco that could be automated more: Many different legacy systems, call centre staff needing to log into multiple systems to find a customer, not being able to make automated process optimizations, etc. One example that we have recently been working on is escalation prediction. With relatively simple machine learning algorithms it is possible to predict – with a very high degree of accuracy – that a certain new or migrated customer will run into an escalation, which can then be addressed before the customer even has to find out. Other areas include analysing usage behaviour, making automated suggestions to more customer-beneficial contract options or personalizing the shopping and upgrade experience more. These are all fields where we are currently active.

What are the main reasons why telcos are not able to innovate quickly enough?

One of the main reasons is certainly the way that big corporate IT used to be structured. Big silos, separation of development and operations and far too much interdependence between very large legacy systems. Very few telcos are able to take the route of congstar and build a new IT in a complete greenfield approach. So, what most telcos have to do is to carve out certain parts of their business and develop those on a new greenfield approach, do it continuously and step by step make their IT more agile, move away from classic enterprise IT paradigms to leaner IT, API-first and loosely coupled vs. deeply integrated solutions. This requires not only a different mindset concerning software development, but also a much closer engagement on a partnership level with their vendors. In my opinion, true partnership is the strongest asset we have.

What are the biggest USPs for telcos in a highly saturated market? Where do you see convergence products playing their part?

As stated earlier, I believe that telcos need to keep up with the quick innovation of MVNOs in their respective market. Of course, you could take the stance and say “my network, my terms” but many markets have shown, that as soon as strong regulation comes in, just being the network provider and being forced to resell your network to MVNOs at fixed rates can quickly leave you in a situation where the MVNOs are able to derive more value for their customers than you can. As such, I strongly believe the big telcos have to start rethinking their value proposition to their customers. Claims such as “best network” or “no dropped calls” are outdated and no longer excite customers in an oversaturated market. People want choice. They want device flexibility, they don’t want lock-ins, they want convenient convergence products at attractive rates, they want flexible data solutions that also meet their home needs, they want their relationship with their telco to adjust to their life circumstances. So, I strongly believe a combination of more convergence products and higher flexibility with truly personalized customer service are key to growing the business in the current climate.

What kind of impact is digital transformation making on the retail value chain? How has the COVID-19 pandemic contributed to the ongoing changes?

I would say we need to separate immediate impact from long-term impact. Of course, during the first lockdown phase, and I am saying “first” on purpose because I don’t think we have seen the last of it, companies relying heavily on their retail footprint have been essentially decimated to dust. In a retail world where you might be working off a five percent EBITDA margin, losing 25 percent of your annual turnover, is, needless to say, an unbelievable exogenic shock. As we are easing in and out of lockdowns, that impact differs between retailers depending on their omnichannel capabilities. As such, the impact for a congstar, that has no stationary retail footprint and can do anything and everything digitally and remotely is close to nil, whereas carriers relying on people to walk into their stores to purchase contracts have been hit much harder. Outside the telco space, brands and retailers with strong E-Commerce presence have seen a dampened effect, whereas luxury retailers especially, have suffered tremendously as they refused to go digital in the past. In many cases, all their airport sales disappeared overnight and they are virtually incapable of selling to their target audience.

The next few years will see a lot of statements being made about how COVID-19 put the last nail in the coffin of retail but I believe the reality is that Omnichannel, or unified retail, was the only one with a future even pre-COVID. Pure downtown retail was already on its last breath in many categories and had survived on selling and re-leasing real estate assets, etc., rather than innovating the customer experience. From an overall retail perspective, retailers who have invested at an appropriate clip, both analogue and digital, have built the ability to collaborate into their ecosystems. Retailers need to be more customer-centric. Having no customer-centricity equals failure. So, in my view, all that COVID has done is to stop delaying the inevitable decline of the legacy retail as well as the rise of the new breed of retail.

How important is it for retailers to implement a customer-led strategy? How does the Omnichannel experience help achieve this?

I think the answer is very clear: A customer-led strategy is the most important factor for success. Customer expectations have grown significantly over the last few years. Whether that is healthy or not is a different subject, but the fact is that companies such as Amazon have led a revolution of customer-centricity. Have you ever heard of anyone having had a bad experience with Amazon’s return policies or their speed of resolving your problems for you? With a razor-sharp focus on customer satisfaction before profits, they have become the most customer-centric retailer in the world. Now, we shouldn’t concede the whole world of retail to Amazon but we can certainly learn from the fact that putting the customer first is one of the strongest investments in the future. Customers that are loyal to you as a brand or retailer don’t check prices anymore but build relationships that last.

You transformed Frankfurt Airport into the first Omnichannel airport. What are some of the key organizational factors to consider before undertaking a transformation of this scale? How will airline retail strategy change post-COVID?

Some of the key learnings are mainly that software alone cannot solve organizational transformation challenges. Agility and innovation have to be driven mainly by mindset and culture, not process and software. The aviation travel retail industry as a whole has long stood by and failed to innovate on a relevant scale. The results were a continuous decline in spend per passenger and an increased disinterest in the proposition. Post-COVID, airlines and airports will have to do more with less, which means that driving non-aviation revenues will be key for survival. So, while investment and CAPEX are extremely difficult for the aviation sector right now, investment in digital commerce solutions will be key to their survival; the result: We will see more and more airlines developing their brands and making them stronger. We have seen this transformation pre-COVID and it will be accelerated post-COVID.

What were the main challenges you faced with AOE during the pandemic and lockdown?

We essentially transferred the entire operations to remote work within two days and were almost surprised at how seamless it went. Teams didn’t only maintain their velocity (output) but in some cases even increased it. So, from a purely operational point of view, we saw no adverse effects. However, where we did get affected badly of course was our aviation division where traffic went quickly to zero. Our E-Commerce platforms at major airports and airlines suffered strongly and so did the revenues from those customers. Luckily, some of our customers had already launched the ability to offer home delivery without people flying and they have been thriving at levels manifold to that of pre-COVID. However, the ones that still relied on people to travel to purchase saw their sales disappear within weeks. Recovery will be slower than expected, but we are bringing new low-investment solutions into the market as we speak, in order to make sure the recovery is a digitally led one.

What do you hope to achieve with AOE in the next few years?

AOE has proven multiple times that it can move industries to a new level of customer-centricity and innovation. From the early days of building some of the first global subscription services such as PlayStation Network, to changing the telco business in Germany to making airports and airlines operate as Omnichannel retailers. We love to innovate and create customer value, led by agile transformation. We aim to continue our footprint in the telco space within Europe and become a leader in the aviation space. Additionally, we have multiple parallel innovation units around the topics of ML/AI, IT Security, Life Sciences and FinTech, which we plan to grow to substantial units as well.