CL's McReynolds: Enterprises Need to First Define Digital Transformation Goals

While digital transformation is an extensive process it is not a patchwork process, says CenturyLink's Chris McReynolds, vice president of cloud and data project management.

Some enterprise customers want to outsource everything they don't understand; others want to do as much as they can themselves. Either way, McReynolds told Telco Transformation in this latest Q&A, digital transformation processes can only lead to a truly effective transformation when guided by a collaborative strategy.

In part one of this Q&A (lightly edited for length and clarity), McReynolds -- who was formerly with Level 3 prior to the merger with CenturyLink -- gives an overview of the CenturyLink approach to enabling different digital transformations for different types of customers. Later, in part two, McReynolds will address the role of standards in enterprise digital transformation -- while talking up how the CenturyLink merger with Level 3 stands to help enterprise customers.

Telco Transformation: How is CenturyLink looking to digitally transform its customers?

Chris McReynolds: I think I kind of break customers into two big buckets. There's a set of customers that are more do-it-yourselfers and they really want to build and operate their own network, their own security policies, all of those types of digital transformation hacks, so to speak. And then there's the set of customers that are less sophisticated and/or don't do that as a core competency to their business, and they really look to people to manage services, or for the network partner to manage and help them transform their network to help them meet their business needs.

So on the first path, I think what CenturyLink brings is we didn't place a bet on one type of solution for customers. So maybe one company says we're betting big on SD-WAN and that's the answer for everyone. And it's not the answer for everyone. We have wavelengths. We have Ethernet services. We have Internet services. We have our SD-WAN capabilities. We have security capabilities. Depending upon what that enterprise's needs are, those different building blocks are the right solution to help transform their business.

So the customer example would be: If I'm a Macy's or a retail customer, they have a lot of stores with branch offices in hard-to-reach locations, they have a ton of cost pressure…Obviously with the online presence that Amazon has, they have a ton of cost pressure. They might want SD-WAN -- that is the right solution for them.

For healthcare, I'm sending tons of files and medical images and tons of data between the imaging facility, and I have regulatory requirements of backups at the datacenter. The solution for them is not SD-WAN; they're going to want a lot of high bandwidth, whether it be fiber or wavelength-type services to connect those locations.

So on the unmanaged do-it-yourself side, I think where CenturyLink differentiates itself is we go in, we try and understand customer's needs -- I'm sure everyone says this -- and we've really got a pallet of options that we can bring to bear to help them evolve from a traditional telecom network with their old voice services into maybe real-time communication, and then a lot of the other network flavors to meet their needs.

The managed side's a little easier. They're looking to outsource all of it. And they're looking to a network partner to bring the right solutions to bear to meet their business needs.

TT: One thing I hear a lot, regardless of industry or profession, is that if you're going to outsource, the one thing you should not outsource is strategy. Do you agree, or disagree? How should customers who aren't do-it-yourselfers be coming to you? What is the homework that they should already have done?

CM: That's a great question. I think there are going to be two buckets within that; there are going to be two buckets for everything. There are a lot of customers, definitely small and medium-sized enterprise, that don't have the knowledge in-house to be able to define what the strategy is. What they need to bring, and the homework that they need to do, is come to a partner like CenturyLink and say what is critical to their business being successful. Is it compliance? Is it healthcare? Or is it a law firm? Maybe it's security and data integrity and all of the legal files and information that they have. What's critical to their business and running well to serve their customers?

Then what's critical from a compliance and risk-management standpoint? They need to tell us what those elements are. Certainly we work with other customers so we can bring some experience on that front, but what are the most critical elements for their businesses to be successful? Then we can help them design a network solution and security wrappers around that so that it meets their needs. And, harkening back to the retail comment I made, maybe it's cost pressure. Maybe they don't need the most reliable network in the world; maybe they just need to make money for the time being to compete with the Amazon store. For healthcare, there's going to be tons of regulatory compliance. They need access to the medical images when they need it, and it needs to be incredibly reliable so we build a very diverse and reliable network for each case.

TT: Regardless of the type of customer, where does the strategy go from there? How do you approach that conversation with the customer of: "Here's how we want to make you more agile, make you more money, or find new revenue streams" versus "Here are some ways we think we can make you more efficient"? Because those are two different things.

CM: Yes. Very much so. We typically start with a few core use cases. So an easy macro trend that has driven more by agility and efficiency than cost-savings, in my opinion, at least, is a lot of companies moving to the cloud. So we have a strong cloud-networking product set. Our starting point is that we'll understand what applications that they are moving to the cloud. Then we can recommend a network that meets the needs of those applications moving to the cloud. That's a digital transformation use case that most enterprises have started and/or are going to do very shortly.

Another one is around voice and real-time communications. So a lot of companies will have their traditional phone lines that are not cost effective. It's a lot of features and capabilities around sharing, around videoconferencing, around web conferencing, all of the UCC suite that customers could collaborate with internally as well as externally with partners of theirs. That's another common use case that we go in with our Voice Complete products. In our partnerships with Amazon, we have Amazon Chime. We have Skype for business partnerships with Microsoft. That's an area that can make companies a lot more efficient and interact with each other.

TT: You sit down with a customer, you're entering into a digital transformation initiative. What's the biggest or most common mistake you keep running into -- that you keep seeing customers make before they meet with you or while they meet with you?

CM: Your strategy question is the one I think that points to what is most often lacking. We see a lot of ad hoc projects. We see one group that says: "Hey, we need a disaster recovery plan; let's archive everything in Amazon S3 and then we're good." And then another group is like: "We need to be more agile in application development, so let's do TestDev in Azure." And then another group. You see a lot of fragmented digital transformation projects, but not a "Here's we are today; here's where we want to be aspirationally in 10 years. What are the first sets of things we should do?" And as we pick those partners to solve those problems, we should also have the end game in mind.

TT: So at a certain point, as you run into this, you have to say, "All right, guys, listen, you all need to get in the same room and get on the same page." Right?

CM: We certainly try. [laughs] Not always an easy conversation, but yes.

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• Level 3's McReynolds Talks About Better IT Cloud Management
• Level 3's McReynolds Discusses Turning Up Virtualization With SDN & NFV

— Joe Stanganelli, Contributing Writer, Telco Transformation