Digital Transformation and the future of BSS/OSS

Digital transformation in the telecoms sector has proven to be a major challenge, with many CSPs having so far failed to realise its full potential. Can telcos revitalise their efforts, or are they doomed to over-promise and under-deliver?

With CSPs adjusting to a revenue shift from voice and messaging services to data, along with increased competition from other sectors, the need to accelerate digital transformation initiatives and future-proof businesses has never been greater.

This transformation represents a fundamental reimagining of how telecom operators can become truly digital-first organisations. Service providers that successfully navigate this path will emerge as leaders in an increasingly competitive landscape. However, those that fail to adapt risk being left behind in an industry where technological obsolescence can now occur almost overnight.

What is Digital Transformation?

Many CSPs still confuse any kind of IT transformation project with digital transformation, failing to recognise that it goes far beyond simply modernising infrastructure or migrating to cloud platforms. This confusion often leads to CSPs investing heavily in technology upgrades while missing the broader strategic imperative to transform their customer experience and operational processes.

McKinsey defines digital transformation as:

“…the rewiring of an organization, with the goal of creating value by continuously deploying tech at scale. A clear digital transformation strategy focused on specific domains and enabled by a set of specific capabilities is critical for organizations to not only compete but survive.”

While IT transformation focuses on upgrading technical systems and processes, digital transformation is about redesigning how organisations create value, engage with customers, and operate their business models. Digital transformation covers both external and internal changes which improve business outcomes.

Why is Digital Transformation important?

Legacy BSS/OSS systems have underpinned the telecoms industry for decades, but their monolithic and inflexible architectures are now incapable of handling the demands for newer data-centric services.

For BSS/OSS, digital transformation must deliver:

• Automation
  Autonomous operations represent a fundamental shift from reactive service management to predictive, data-driven processes powered by AI and machine learning. For BSS/OSS, this means moving move beyond manual workflows to intelligent automation that can anticipate service issues, proactively resolve customer-impacting events and streamline business processes. By automating tasks such as order fulfilment, billing adjustments and resource management, CSPs can significantly reduce operational costs, improve service accuracy and deliver a more consistent and personalised customer experience.
• Cloudification
  The transition from legacy on-premises systems to cloud-native architectures provides elastic scalability, allowing CSPs to handle demand spikes without over-provisioning infrastructure. It also enables faster innovation cycles through continuous integration and deployment practices (CI/CD) that support rapid feature releases and experimentation with new business models, while dramatically reducing the time and cost associated with launching new products and services.
• Customer-centric experiences
  Modern CSPs are transforming their customer engagement models by leveraging data analytics and digital platforms to create highly personalised experiences and offers in real time across all touchpoints. Digital-first strategies empower customers to manage their accounts through mobile apps, web portals and messaging platforms. This self-service approach allows them to troubleshoot issues and access support resources independently, reducing operational costs while improving satisfaction.
• Faster time-to-market
  Cloud-native architectures and GenAI tools enable CSPs to cut product development cycles from months to days or even hours, enabling rapid experimentation and iteration without disrupting existing systems. This agility enables CSPs to respond quickly to market opportunities, competitor actions, and the changing whims of customers by rapidly launching new service bundles, adjusting pricing models, or introducing new features.
• Interoperability
  Embracing open standards and API-first architecture liberates CSPs from vendor lock-in while fostering innovation through ecosystem collaboration, creating opportunities for new revenue streams through platform-based business models. This allows CSPs to leverage best-of-breed solutions rather than being constrained by single-vendor limitations, enabling faster adoption of innovative technologies and services.

How to approach your Digital Transformation strategy

Though digital transformation presents a great opportunity for telecoms businesses to boost profits, capture new segments, rebuild market positions and revitalise business systems, the stark reality is that 70% of projects fail, for a number of reasons.

1. Legacy systems
   Decades of accumulated customer data, network configurations and business rules bog down systems. This data frequently exists in proprietary formats, with complex interdependencies that aren't fully documented. Rip-and-replace strategies are risky, costly, and can disrupt services. Instead, CSPs often take a “wrap-and-extend” approach, where new digital layers are added on top of legacy cores.
2. Siloed architectures
   BSS and OSS have historically evolved in silos. This fragmentation leads to data inconsistencies, poor customer experiences and process inefficiencies. Digital transformation demands convergence of data, systems, and workflows, but unifying BSS and OSS remains a work-in-progress for many.
3. Slow delivery models
   Cultural inertia, compliance concerns and complex stakeholder landscapes slow down innovation. Though Agile and DevOps are the norm in IT, many telecom environments still operate with waterfall methodologies and long release cycles.
4. Cost and risk aversion
   With declining ARPUs but increasing capex for 5G standalone and fibre rollouts, CSPs are cautious about large-scale BSS/OSS investments that often exceed budgets and fail to deliver ROI. This leads to transformation fatigue, where leadership becomes sceptical of multi-year, multi-vendor programmes that don’t deliver value quickly.
5. Fragmented standards
   While TM Forum Open APIs and Open Digital Architecture (ODA) are gaining traction, implementation of these standards remains patchy. Many vendors claim product compliance but this is often done by “wrapping” legacy applications with an additional interface layer, instead of rewriting the core software. Very few suppliers have real-world certification of their Open APIs in live sites.

Such a transformation is hard-fought, but necessary. To enable it across your business, you need to lay a solid foundation with your BSS/OSS platforms. Some key elements are:

• Composable architecture
  Instead of monolithic systems, the future lies in composable BSS/OSS solutions built with microservices – smaller, independently deployable components that communicate with each other via APIs. Furthermore, no-code/low-code tools enhance this composability, enabling CSPs to change processes and launch new services through configuration not customisation.
• Master product catalogue
  CSPs can centrally manage all products and services in one system and then seamlessly publish to multiple channels. This is needed to quickly and efficiently prototype and launch new products that are tailored to specific market segments. Equipped with the right catalogue solution, service providers can diversify their offerings, grow their businesses and keep customers engaged.
• Digital channels
  Today’s customers demand a seamless omnichannel experience that works across all touchpoints with their CSP, including self-service portals, mobile apps and digital messaging platforms. Furthermore, organisations need to build capabilities that allow their sales teams to sell seamlessly across multiple channels without affecting user experience.
• Data-centric design
  A unified data layer approach ensures that insights aren’t locked away in silos. Real-time decision-making hinges on access to unified, high-quality data – AI/ML pipelines, personalisation engines and operational dashboards all depend on this foundational layer.
• Culture and skills transformation
  Transformation requires more than an upgrade to the telco tech stack; changes in mindset, governance and skills are all crucial. Cross-functional teams and product-centric delivery models – built around customer value, business outcomes, and lifecycle ownership rather than projects or tech stacks – can break down silos and accelerate innovation. Before you begin the process, ask yourself: what problems are you trying to fix?

What's the path forward?

CSPs must quickly overcome the inertia and reimagine their operations, product offerings and customer experience with digital transformation. Becoming a digital service provider is the only way to combat declining growth rates, saturated markets and newer competitors.

Operators that succeed will be those who:

• Treat transformation as not just an IT upgrade, but a business imperative
• Embrace open standards and modularity
• Focus on incremental wins and agile delivery
• Invest in people, not just platforms

Digital transformation is not a one-time activity; it requires a holistic approach that aligns technology investments with business strategy, cultural change and customer-centric innovation that will help businesses seize new opportunities.

Cerillion has been helping CSPs transition to digital service providers with our composable, streamlined BSS/OSS suite, delivering the ultimate in digital-first customer experiences. Contact us now to discuss your digital transformation challenges.