Telcos Must Put Business Impact First In Big Data Investments

Stephan Gatien

I recently participated in a Big Data & Analytics panel at the Canadian Telecom Summit in Toronto, where I joined Telus chief data & trust officer Pamela Snively and HP enterprise CTO Aleksey Gurevich.

Telcos are among the most data-rich organizations on the planet, alongside Google, Facebook, and Amazon. Operators are aware of all the network events their customers generate (voice, text, data activities), the high level of content these customers may consume and their geo-location patterns.

Yet despite this wealth of data, there is no clear evidence to date that this data is put to good use, whether it’s internally to boost the effectiveness of customer engagement strategy or externally to accelerate the creation of new revenue streams in the new data economy.

In fact, recent McKinsey research found very few Big Data projects initiated by telcos had any major business impact. The vast majority of the 250 operators surveyed showed an absence of profit improvement following investments aimed at extracting value from Big Data.

This point was not lost on the Telecom Summit panel. There was a consensus that with data so cheap to store and IT seen as the natural go-to for big data projects, there have been a lot of “science experiments” that might be interesting and technically innovative but lack any strategic focus. These projects ultimately hit a dead end in terms of business value.

We can probably forgive these failed science experiments as an inevitable part of an organization trying to form its new identify. After all, fail fast and fail often is a good approach to take. But a telco can make its rebirth a lot easier by focusing its Big Data efforts on solving wider business problems.

Such an approach was recently illustrated by Vodafone’s “margin assurance” Big Data project. With IT and the revenue assurance team working together, the operator was able to identify millions in revenue leakage. Focusing specifically on profitability of individual rate plans, Vodafone could rapidly detect that certain packages (an all-you-can-eat roaming add-on) created immediate profit destroyers in certain contexts (senior citizens on international cruises). This gave them the ability to swiftly stop the bleeding and deliver instant value to the organization.

Vodafone’s finance director called this level of granular customer and plan profitability understanding a game-changer. To me, it demonstrates how the ability to quickly and cleverly process massive amounts data can deliver tangible business impacts to network operators and digital service providers.

The pace of Big Data initiatives in telco is only going to accelerate. There will be plenty of opportunities to make an impact if these projects are done right. Tens of millions of dollars of savings or new revenue are probably within reach for operators that are able to pick the right battles, avoid science experiments, and create a holistic framework to make business impact.

For more on how Big Data is disrupting industry, see The Dichotomy Of Big Data’s Risks And Benefits.

Stephan Gatien

About Stephan Gatien

Stephan Gatien is global head of Telecommunications for SAP. He is responsible for the company's vision and strategy in the telecommunications industry, overseeing product and solution management activities and working with product development teams to ensure that SAP products support the unique needs of telcos.