How analytics can transform masses of data into competitive differentiation

WHITE PAPER Six Ways to Use Subscriber Data to Build a Stronger Business How analytics can transform masses of data into competitive differentiation Ken King, Director, Telecommunications and Media Convergence, SAS Ken King is a global expert on the use of advanced business analytics to solve complex business problems for the communications industry. He consults with SAS clients and industry thought leaders on topics such as churn management, social network analysis, product bundling, offer optimization, forecasting and operational improvements. SAS solutions are deployed in almost every large telecommunications service provider. King has more than 25 years of global telecom industry experience in designing, deploying and supporting voice and data networks. He has extensive experience in migration of communication networks from circuit to packet switching. His background includes roles in sales, marketing, product management, alliances, engineering, testing, training and technical support. King has a BS in computer and information science from the University of Florida and an MBA in product innovation management from North Carolina State University. He has dual Australian and American citizenship. Six Ways to Use Subscriber Data to Build a Stronger Business Table of Contents Bridging the Gaps Between Data Domains.....................................................3 Six Customer-Centric Applications for Analytics............................................5 Closing Thoughts..............................................................................................9 For More Information......................................................................................10 i Six Ways to Use Subscriber Data to Build a Stronger Business When the second-largest Latin American telecommunications service provider promoted a new service bundle to active residential customers, initially more than 26,000 early adopters accepted the offer. The question then became, “How can we apply what we know about these early adopters to attract customers whose call records show a direct connection to them?” Experimenting with three different groups, the results demonstrated that some customers exert a powerful influence over the behavior of other customers. Three groups were selected from the early adopters. The control group was ■  Analytics is widely used across chosen at random. When customers linked to that group received the offer, industries, but there is a lot of 13 percent accepted the new service bundle. Not bad. The second group untapped opportunity in the represented prospects linked to the top revenue customers among the early communications service provider adopters. Again, 13 percent of this target group accepted the offer. Most marketers would call that a good day. (CSP) area. CSPs have so much data – they’re almost overwhelmed with The third group represented customers linked to the early adopters with the the amount of data. Our experience largest sphere of influence – the ones with the most clout. When prospects proves that applying analytics can associated with those influencers were targeted, the uptake rate soared to 30 percent. create a lot of advantage. This is the stuff of which marketers dream: being able to more than double the uptake rate by pinpointing the right people to targetthe right people to target, resulting in better results for less effort and investment. This demonstrates the power of analytics, which represents a broad range of capabilities from creative investigation of existing data to statistically derived foresight about future outcomes. Analytics has been helping financial services institutions better understand credit risk, combat fraud and money laundering, and maximize the value of accounts. Every time you swipe a credit card, a fast-acting algorithm is operating behind the scenes to determine whether this transaction is within your profile or potentially fraudulent. Analytics helps retailers understand what their customers are likely to want next, how price-sensitive they are, and how to appeal to them most effectively. Analytics helps governments curtail waste and abuse. In fact, analytics has a place in most any organization that needs data-driven decisions based on masses of disparate data. The telecom industry has lagged in fully exploiting analytics, but that is changing. The benefits of subscriber data management (SDM) techniques are well-known, but providers could significantly extend the value of SDM by adding a layer of analytics. Analytics can bridge the gaps between the telco and IT domains in a service provider’s data architecture to create new insights based on a more comprehensive view. 1 Six Ways to Use Subscriber Data to Build a Stronger Business The time is right for embedding analytics into business processes, for several reasons: • The business climate demands it. The increasing complexity of the network, its services and the “two-sided” business model in general demand it. Surely nobody thinks the industry is going to get slower and simpler in the future. It is already a challenge to keep pace with the velocity of change and to make sound decisions in a dynamic and unforgiving environment. • Data can be a rich source of differentiation. Personal data has been called “an emerging new asset class,” “the new oil of the Internet” and “the new currency of the digital world.” ■  Predictive modeling tools are now Is your data fueling the business or just sitting around in databases and reports? more user-friendly. The visualization Service providers have a wealth of information in call detail records, applications approaches are becoming much data, trouble tickets and external data, as well as from sales, marketing, billing, more advanced in giving people data network monitoring systems and more. But rarely is this information integrated or sufficiently analyzed to bring all the benefit it could to the business. in a timely way, so they can clearly understand what the data is telling • The processing power is now available. With cloud computing and grid computing, analytic applications can scale far beyond those of only a year ago, them about their business. making enterprisewide initiatives a reality. The lower cost of data warehousing and high-performance computing is also opening opportunities to do more things in real time, or close to it. • Analytic sophistication is more accessible than ever. It is easier than ever to embed analytic techniques into business processes and socialize the results across the organization. For example: • Software as a service (SaaS) frees service providers from the requirement to purchase and install hardware and licenses for analytics within their own data center. Instead, users get secure access to analytic applications over the Internet from a remote computing center. • New graphical user interfaces enable business analysts to be more self- sufficient in exploring data, asking questions, developing workflows and even generating their own analyses. • Business intelligence systems push analytic insights out to the business – to Web and mobile devices – to support decision making at the right time and place in a format that is meaningful to each level of business user. The focus of the TM Forum traditionally has been on telecom operational and billing systems. At past conferences, we spent most of our time answering two questions: “Who is SAS?” and “What is analytics?” Now executives seek us out – and they ask us, “How can we use analytics to improve our business?” This paper discusses six key areas of potential. 2 Six Ways to Use Subscriber Data to Build a Stronger Business Bridging the Gaps Between Data Domains The service provider data architecture has two distinct domains. There is the traditional telco domain, which contains databases such as HLR (home location register), HSS (home subscriber server) and authentication servers. And there are databases on the IT side, such as OSS/BSS databases, collections databases and customer relationship management (CRM) systems. By extending SDM with analytics, you can use data from both domains to find and fuel new business opportunities.