Summary Bullets:
• Telefónica Tech held its analyst event in London, UK, on November 28, 2024.
• The company has created a new operating model designed to replicate its local capabilities at a global scale.
GlobalData attended Telefónica Tech’s analyst day in London, UK, on November 28, 2024. The company recently reached the milestone of EUR2 billion in revenue, having evolved from a communications player later delivering traditional IT, to the cloud, implementing IoT solutions, and then moving on to AI projects. 2024 has been a momentous year for the company, which celebrated its centenary since it started out in 1924.
Telefónica Tech highlighted the value of its 7,000 employees, of which 20% come from acquisitions such as Microsoft solutions provider BE-terna, Google Cloud specialist Altostratus, and cybersecurity consultancies Govertis and ihackLabs. The company has designed six specific career paths; each path has 15 stages so that all employees know what to do to progress. A staggering number of training hours: 150,000 in 2024 so far, has made it possible to reach an attrition rate of 10%, which is below the market average and is good news for Telefónica Tech customers benefiting from continuity in their critical modernization projects.
The company has created a new operating model designed to replicate its local capabilities at a global scale, and to maximize the competencies acquired from a raft of acquisitions in 2021/22, such as Geprom, a technology engineering company focused on industrial automation and digital transformation, and many others.
“Mirroring” is a key practice in replicating competitive strengths. This entails creating a transversal and homogenous process worldwide, allowing the company to be systematic, independently of the geography and of the service delivered to the customer. Thus, the company has two digital operation centers in Spain and in Colombia which are fully mirrored, making it possible to deliver services worldwide independently of time zone. From these two hubs, it manages a network of security operation centers that include the recently unveiled hub located in Belfast, in Northern Ireland, to push UK operations.
Telefónica Tech has mirrored and mapped its vertical units with different geographies to maximize the market opportunity globally, creating ‘Global Services Lines’ (GSLs) to assign resources in a dynamic way: IoT; Cybersecurity; Business Applications; and AI and Big Data. While this mirroring technique has been relatively easy to implement for the IoT GSL, the other lines have presented more challenges. In cybersecurity, the company occupies a leading position in Spain and Latin America, but it is weaker in the UK. It has connected the Belfast SOC with one of its leading hubs, the SOC in Madrid (Spain), creating a federated model with a full stack of capabilities that are now enabled in the UK.
The reverse has been applied to the Business Applications GSL: the company has a strong customer base in the UK and the Central European subregion, based on Microsoft Dynamics deployments in healthcare, banking, insurance, and retail. It has crosspollinated that experience onto Spain, where it has been historically less present in that field, generating a funnel of new opportunities.
The Artificial Intelligence and Big Data GSL also has complimentary capabilities in different regions: in the UK, solutions based on Azure implementations; in Central Europe, the focus is on hyper automation and process re-engineering. In Spain and the Americas, Telefónica Tech is leveraging its wide ecosystem of partners supporting varied use cases. The company has over a decade’s experience in AI, and even longer leveraging customer data as a telco. This positions it well to help customers with the tech, cost, and digital challenges posed by at-scale implementations of GenAI. The company combines predictive and GenAI in horizontal and vertical use cases leveraging industry-specific data and expertise in IoT, cybersecurity, cloud, blockchain, and robotics with 10 specialized centers with locations in Spain, the UK, Central Europe, and Brazil.