Inside a clean-sheet digital transformation of a multinational telco VEON with CTO Yogesh Malik
“You know, the word ‘transform’ is used a lot. It’s everywhere. Transformation. I’m transforming. You’re transforming. Everyone’s transforming!
“But it’s the purpose. That’s the key.”
Yogesh Malik stands in a corner office on the sixth floor of VEON’s headquarters in Amsterdam, describing a philosophy that has helped him drive a root-and-branch reformation of one of the largest telcos on the planet. Yogesh has been awarded a Group CTO of the Year 2017 by Mobile Europe and has just been named Oracle’s CIO of the Year. He reveals to Gigabit the stunning scope of the transformation he’s helping to lead, around us the final touches are being made to the decor of a building that now looks as aspirational as the company’s brand, products and culture feel.
VEON the platform
The company renamed itself VEON, from VimpelCom, in February of this year. A commitment to what the company calls ‘radical transformation’ is encapsulated in the name – it’s the brand of its existing personal internet platform, technology through which it doesn’t just connect its customers, it aims to provide world-beating localised services and liberate them from such anxieties as going dark when the credit runs out.
Years of divestments and organisational change have led to this moment – a process focused squarely on shedding the ballast of a traditional telco in order to surge forward as a large but agile technology company. The VEON platform leverages powerful data analytics and artificial intelligence, offering users a variety of new, personalised and contextualised services on anything from entertainment to financial services using data insight to predict and satisfy customer needs.
It bundles in messaging capabilities to enable users to connect by voice, text, picture and video through a constantly iterated proprietary platform. The aim is to securely provide everything online at a tap of a finger, and importantly zero-rating is a 'fundamental component of the service’, with users able to stay online for free even when they are out of credit.
Emblazoned throughout VEON’s freshly appointed offices are reminders of its core values, foremost among which is to be ‘customer obsessed’. It’s a purpose that has fuelled the company’s transformation and that is made real in VEON’s core consumer offering, fine-tuned as it is to the needs of customers across the frontier markets it serves – majoring in Russia and Pakistan, but stretching from Tajikistan to Algeria. It’s also a major player in Italy, in partnership with Hutchison under the brand WIND Tre. It’s where the VEON platform first cut its teeth. The company employs around 40,000 people across its 13 territories, under six distinct brands.
Clean sheet thinking
It’s all a result of what Malik describes as ‘clean-sheet thinking’, where the customer’s needs are sacred and drive decisions from top to bottom.
“It’s about thinking about your customer and nothing else,” he says. "Not about your competition, just the customer.
"See what the customer really wants, then look at what’s impacting the customer and what affects their choices. Is it a competitive thing which is influencing them? The internet, their freedom? What is going to make up the customer's mind on what to choose and what not to choose?
"Clean-sheet thinking is something like the automotive industry moving towards a completely electronic car. An electronic car is nothing but a computer on wheels and Tesla figured that out.
“It’s very hard for the incumbent big auto manufacturers to make a hybrid car. They are building on the same chassis, they’re constrained by the engine room, by the back room. But Tesla clean-sheeted – they wanted space, a beautiful dashboard with everything visible like a computer screen…
"That’s key when you transform. Keep the customer, understand the forces acting on them. Forget about the rest. Then find a way to provide the best solution for the customer while being sustainable and competitive in the marketplace."
Leading technology transformation
Malik and VEON’s leadership clean sheeted their entire organisation and pivoted it around the needs of their customers. For a company with over 235mn customers across a wide variety of territories, embarking on such a comprehensive reformation was certainly bold. But Malik is adamant that VEON represents more than a rebrand - the company’s mission, identity, and culture are ready for the future and the rebrand is a ribbon on the package.
"VEON is a company where on one hand we have extremely big size and diversity - but not only that, we have a great pioneering spirit. Amongst the diversity and the scale, we are able to pioneer new frontiers, and that makes us very, very special,” he says.
"Now the CTO role for me is extremely important in this journey. It's about moving from conceptual thinking to delivery and strategizing the next move. Transformation leadership is central to a CTO role.
"We need to understand software. Coming from telecoms we were very linked into hardware and software, coupled together. Those elements needed to de-couple to understand software much better as a skill in its own right.
"And we need to be extremely financially savvy. As a CTO, I cannot just bring ideas to my CFO, my CEO, which I wouldn’t believe in if it was my own money. The metrics of customer engagement, the metrics of brand, the metrics of return on investment, they need to be very, very closely felt in the technology strategy in order to make the transformation real.”
The company’s emergence as a brand – and platform – called VEON speaks very publicly about how it can deploy technology to empower its customers. As it advertises to the world, it offers customers a chance to “Be Truly Free”. There is no doubt it’s an ethos very closely aligned to Malik’s own personal beliefs in terms of how the company should be operating.
He tells us that as a child in India he endured frequent trips to doctors to patch up the scrapes of his adventures. As a result, he aspired to become a doctor himself at the time, to improve lives and “excel in solving their problems”. While his career took a different path, he says the same basic purpose still informs him when leading technological progress at VEON.
He says passionately: “Who am I really serving? How can I make my effort in such a way that I see delight on the customer's face? That is a main driver for me. What do we need to do next to serve our customer? How can we make the service better? How can we make it more effective? How can we explain things more easily? How can we inspire?
"For me what holds a lot of importance is to have a purpose. Because without a purpose you cannot really transform anything.
"It's absolutely key to have a purpose as a centre, and customer is a purpose. Then, of course, we need to have an open-mindedness. We cannot go into any situation thinking only one solution would work. We've got to balance things. Sometimes a local opinion matters, sometimes a global opinion matters.
"Thirdly, we should walk the talk. If you don't do that, we just kind of stumble preaching something, it never gets done.
“Have purpose, be very open-minded, walk the talk, all of the time.”
The future of telecoms
VEON is taking radical steps to own its future and influence the shape of things to come. In Malik’s view there has been a breakdown in the value chain in the telecoms industry more generally. OTT content services are leveraging networks to build closer relationships with customers than the network providers themselves. Infrastructure is installed and maintained as a commodity divorced from the needs of their end users. Devices and sales swirl competitively around the edges.
The outcome is an increasingly disengaged customer. The reincarnation of VEON from VimpelCom – and all the change that has occurred under the hood - is geared around fostering customer engagement from the grass roots, by transforming the fundaments of both company and service.
"As a telecoms industry, we were given 3G as a tool,” Malik says. "We were given 4G as a tool and now we are talking about 5G, but we have never addressed our core problem: How do we address customers in a real-time, personalised manner? How do we empower our customers and our consumers more, so that they feel in control in the same way they feel in control of their bank account, or their airline ticket, and how can we take this customer confidence to the next level?
"That is what we are dealing with right now and, in my opinion, if we do not deal with that, we can keep building networks of new technologies, but we will never address a core of the issues. And the core of that is the IT behind the networks serving our customers.
"And what can we do with the data we have? Following all the regulations, we can personalise that customer journey. We can make that customer be the customer, not a SIM card holder.
"Today, everyone is going after SIM cards, but actually the customer is either owned by Apple, or by Google, or by Yahoo, whatever brand they identify with. They are not owned by the telecom operators. This is what we would like to change, and this next step for us to become a trusted advisor is going to be key.”
Malik is confident, though, that change is afoot, and he believes the reborn VEON can be a pioneer for this new methodology and way of thinking across the industry.
It’s not going to happen overnight, but it has begun. Malik is leading the charge at a company in a prime position to succeed. It refers to the countries it serves as the ‘markets of the future’ and with its huge, diverse team and bold technology strategy it aims to make a dramatic impact.
"Now it's not just a concept or a vision, there are actions to back it up,” he says. "I think that whole transformation on network, customer angle, complete ID transformation, and bringing data to customers’ lives will really give birth to a data-driven company culture. In fact, that's happening right now as we speak. In 12-to-18 months, I think it's no longer going to be green shoots we’re talking about, it's going to be the new harvest brought by this change.
"It's hard for me to comment on the strategies of other companies, but I do understand there are complexities when you're sitting on a huge legacy infrastructure skillset, and on revenues that you do not transform too swiftly. You need to be careful, and passionate, so it will very much depend if other telcos have the similar kind of pioneering spirit as us.
"There are a couple of examples in Asia and the US where companies are really changing with a huge vision of conquering the next horizon as well. Otherwise you will be a commodity. You will perhaps be essential to the market, but you will not be a differentiator."
By now VEON’s offices, gleaming in the heart of Amsterdam’s burgeoning Zuidas business district, will be resplendent in its final livery. After we talk, Malik heads straight to the airport for a flight to Algeria. He has the look of a man who’s delivering the future personally.