1. 2013 Northstream. Proprietary and Confidential. All Rights Reserved. 0 2. 2013 Northstream. Proprietary and Confidential. All Rights Reserved. Analytics beyond the hype: CSPs achieve tangible benefits Northstream white paper summary Northstream for Comptel 9 September 2013 Galina Garpensthl 3. 2013 Northstream. Proprietary and Confidential. All Rights Reserved. 2 Background to writing the white paper Big data is today a buzz term, surrounded by questions on privacy and regulation and shaped by the quest to find monetization business models Northstreams objective was to look beyond the hype and identify how CSPs can extract the most value from their big data assets Big data and analytics in the context of the telecom industry Big data is used to represent the rapidly expanding availability of data, which can be used as input to business decisions. Big data is a relative measure for each organization, with big implying more volume, more sources and higher value Data analytics solutions are evolving to be real-time, granular to individual customers and combine data from multiple sources. Analytics moves beyond reporting and into predictive and prescriptive models Northstream white paper Analytics beyond the hype About Northstream: Founded in 1998, Northstream is an experienced management consulting firm providing strategic business and technology advice to the global telecom and media industries. We help our clients through independent and objective analyses, advice, problem solving and support that are tailor-made to our clients situation. Our work is based on a well-balanced combination of innovation, industry best practices and in-house methodologies. 4. 2013 Northstream. Proprietary and Confidential. All Rights Reserved. 3 The research concludes that the internal uses of data offer CSPs the most sizable benefits through impacting differentiation, churn, costs, planning, ARPU etc. In a new white paper, Northstream discusses how CSPs extract the biggest benefits from data analytics Global telecoms revenue 2012 $1,500B Global net digital ad revenue 2012 $104B The global net digital advertising market (including online and mobile) was estimated to have revenue of $104B, equivalent to 7% of the $1.5T in telecom and related services revenue (2012) Almost half of the net digital ad revenue is captured by eleven companies, among which Google is the leader with 31% of the total For CSPs, a 1% increase in their revenue, or the corresponding smaller reduction in expenses, accomplished through the internal uses of data analytics, would have a similar impact as becoming a market leader in digital advertising. Sources: Analysis Mason, Global telecoms market: trends and forecasts 20132017 eMarketer, June 2013 5. 2013 Northstream. Proprietary and Confidential. All Rights Reserved. 4 The whitepaper presents a framework for mapping the various analytics use cases Operational efficiency Analytics Subscriber lifecycle Financial performance 0 100 200 300 400 500 600 2008 2009 2010 2011 2012 Northstream finds that by using advanced data analytics, CSPs can improve 1) operational efficiency, 2) customer experience throughout the subscriber lifecycle and 3) financial performance 1) Operational efficiency improving the efficiency of operational areas such as products and marketing, customer care, networks etc. and opening silos to share data across the organization 1) Customer experience achieved by better segmentation and marketing; customized service offering; increased retention by more accurately identifying potential churners etc. 1) Financial performance through optimizing existing sources of revenue and achieving savings both in the serving of subscribers and in the overhead of the organization; making CAPEX more efficient 6. 2013 Northstream. Proprietary and Confidential. All Rights Reserved. 5 Example analytics use cases Operational efficiency Use cases Subscriber lifecycle Use cases Financial performance Use cases Network Capacity management Performance management Attraction Customer insight and targeting Sales and channel analysis Revenue Channel optimization Product portfolio optimization Pricing optimization Customer care Customer problem case analysis Priority customers service Customer sentiment Acquisition Value segment prediction New customer analysis Variable cost Acquisition cost optimization Retention cost optimization Products, Sales and Marketing Customer profiling/segmentation Top-up optimization Product analysis Service Delivery Contextual offers Service quality improvement High value service upsell Fixed cost Customer care cost reduction Marketing analysis/optimization Regulation/Governance Contract/SLA enforcement Roaming analytics Regulatory reporting Billing Fraud detection Bad debt forecasting CAPEX Infrastructure planning Traffic optimization Management Continuous business optimization Predictive planning Internal staffing Retention Churn prediction Churn prevention Competitor destination prediction Accounting/Forecasting Wholesale reconciliation Revenue leakage Customer lifetime value Each example can be listed under one category in each of the three dimensions, but is placed under only one of the categories arbitrarily. Examples marked in red are explored further in the case studies in the white paper. 7. 2013 Northstream. Proprietary and Confidential. All Rights Reserved. 6 The Extraction-Processing-Application framework can be used to describe the structure of data analytics systems Network Nodes Routers Servers Probes OSS/ BSS OSS/BSS Inventory Fulfilment Assurance Billing 3rd Party Social Media Geo Data Financial Consumption Customer CRM AAA HLR/HSS Devices ProcessingExtraction Application Operational efficiency Subscriber lifecycle Financial performance Example applications from case studies: Validation Normalization Rules / Logic Correlation ! Network Sales 0 100 200 300 400 500 600 2008 2009 2010 2011 2012 Top-up optimization High-value service upsell Churn prevention Customer care cost reduction Wholesale reconciliation 8. 2013 Northstream. Proprietary and Confidential. All Rights Reserved. 7 The white paper presents five case studies from CSPs on five continents, which illustrate and quantify the real-life benefits from analytics deployments The paper suggests three principles for CSPs to follow when deploying data analytics solutions CSPs achieve the best results when using analytics to accomplish specific business goals. The insights provided by the data analytics need to be timely, relevant and actionable CSPs find it useful to develop a strategic plan for data analytics that has a long-term vision, but at the same time build the implementations incrementally, beginning with individual use cases CSPs should have a clearly appointed analytics project owner at the strategic level who can ensure the overall strategy, processes for combining data, sourcing systems, selecting vendors etc 1 2 3 9. Contact details 2013 Northstream. Proprietary and Confidential. All Rights Reserved. Joonas Merenheimo P: +358 50 5650600 E: joonas.merenheimo@northstream.fi www.northstream.se stermalmsgatan 87 SE-114 59 Stockholm Sweden Want to download the full Analytics Beyond the Hype whitepaper? Click here.