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Category Archives: Analytics

The Trifecta Effect for Telco Analytics –Anomaly Detection

Subex recently participated in the Monetising Big Data in Telecoms World Summit 2018, Singapore, where we demonstrated our expertise of 25+ years in the Telecom domain handling data at a massive scale. We did this by presenting on the topic: The Trifecta Effect for Telco Analytics –Anomaly Detection

To take a step back, Subex has partnered with 250+ telcos across 100 countries. We have been handling big data and have an understanding of the business of telcos working in different contexts, demographics and geographies, and at different stages of their growth. We have been leveraging analytics for 10+ years in the assurance portfolio, and have made a foray into analytics across all domains in the telecom sector. While starting on this journey, we did a survey across many operators and what came out was unexpected albeit not exactly surprising, based on our experience.

We saw that, while the telecom domain today is at the forefront of innovation, the industry can be considered as a relative laggard in adopting analytics, when compared with other industries. Around 60-70% of the executives still lack relevant data for decision making. To top it all, where analytics is being used, around 60% of the organizations are still not very confident about their analytics insights.

Based on our market research and after multiple interviews we believe that the reason for these above problems can be classified along the following categories:

  1. Poor ROI
  2. Multiple and Complex Dashboards
  3. Long Development Cycles
  4. Data quality issues
  5. Short Supply of Data Scientists
  6. Lack of Agility

To cater to these problems, we at Subex have designed a way to address these issues. Our solution, ROC Insights stands on three pillars which we call the Trifecta of Analytics: Agility, Cost & Consumption. Subex does this by

  • Delivering insights in less than 8 weeks
  • Following a pure OPEX model which takes care of the cost
  • Most importantly ROC Insights simplifies consumption of analytics insights tremendously through the use of storyboards

At the Monetising Big Data in Telecoms World Summit 2018, we explain how the Trifecta can be leveraged by using a simple example of Anomaly Analytics. For a telecom, with massive volumes of data, it is more difficult to detect anomalies in data than finding a needle in a haystack. In case of the latter we know that we are looking for a needle. In this case, we don’t even know what exactly one is looking for. However, it is extremely important for a telco to manage anomalies to mitigate risk and to prevent missing out on opportunities.

There is a very fine line between the definition of an anomaly and outlier. Rather the distinction is rather fuzzy as anomalies and outliers are intersecting but certainly not subsets. Take for instance, a queen bee in a bee hive. She is an outlier but not an anomaly. Anomalies usually remain undetected. They are unknown problems with unknown solutions. Our work detects, curates and qualifies these problems to move it from the unknown-unknown realm to the known-known realm by breaking it into parts, analyzing them using various ML/DL algorithms and as well doing causal analysis to find the root factors.

We talk of two examples where we work with Telcos to solve their anomaly problems using advanced analytics. In the first case, our solution of anomaly detection required modification as the client was based out of East Africa with pockets of high population density in vast open areas. We developed anomaly for cell sites using algorithms such as time series, manifold learning, LSTM etc. We did anomaly detection for different KPIs such as call duration, data and customer latching. This was further qualified along the dimensions of 2G/3G/4G, on-net/offnet and so on. Anomaly analysis generally suffers from the problem of ‘too many’ and difficulty in prioritization. Our solution gives revenue numbers to the anomaly and prioritizes them. Most importantly it looks also at the long term business impact of high value customers, churn etc. and also considers the factors whether load balancing is done by nearby cell sites and the customers were really impacted or not.

Our second use case was regarding our work for a client based out of N. America. They were having difficulty in detecting lost handset on time. This was causing them huge monetary loses. With the help of algorithms like probabilistic graphical model, Markov chain etc. we created algorithm to detect whether a handset was stolen or not. Our algorithm helped in improving the client’s solution 9 times in detecting the algorithm. As well in 80% of the cases, the instances were detected within 24 hours, thereby improving the customer’s bottom line.

All in all, the presentation provided for a good opportunity for attendees to understand how Subex is working with big data, and how ROC Insights can help telcos by pinpointing upon a very specific problem. At large, we enjoyed presenting at the event and meeting with telcos from across the APAC region. Hope to see you there next year!

Dr. Sumit Singh is Senior Data Scientist at Subex Digital LLP. He has a PhD in Decision Science and is a Machine Learning researcher, practitioner and educator with over 10 years’ experience in academia and the industry. At Subex, he is responsible for statistical modelling and algorithm design for business requirements. As well he is involved in doing research activities to implement new ideas into telecom domain. His areas of interests are – Reinforcement Learning, Optimization and Stochastic Modeling. He can be reached at sumith.singh@subex.com

AfricaCom 2017: A Subexian View

It is a well-known fact that AfricaCom is one of the most popular and significant events for telecom operators and vendors alike in one of the most fast-paced emerging economies: Africa. The annual event is attended by the top telecom executives from across the world and is attended by Subex every year. I had the privilege of attending the last edition of AfricaCom, and from what I’m told, 2017 was one of AfricaCom’s busiest years: a sentiment which was shared by executives of operators and vendors and even by the Cape Town locals.

While I happened to attend some of the sessions at the newly opened Innovation Stage, my sense was that most of the buzz was happening at the exhibition area, where Subex too was an exhibitor among some of the biggest names in the telecom space. It was clear that Digital Transformation was the central theme of AfricaCom 2017, and was a key discussion point among both vendors and operators.

The theme of Digital Transformation and Digitalisation has been a cornerstone of Subex over the last few years and keeping in line with the concept, Subex showcased its Analytics and Consulting & Managed Services offerings to the delegates besides its renowned flagship products. In my discussion with executives from the top CSPs, it’s clear that analytics is still as popular as ever, and the demand from true analytical services for the telecom domain is hotter than ever.

The need to leverage data was also a hot discussion point for Subex even with industry analysts. As per my discussion with a renowned analyst from Ovum, leveraging analytics in the African market is definitely an area of interest.

Overall, from the excitement in the market for things to come, it’s clear that the African market is increasingly embracing the journey ahead and preparing themselves for the challenges on the horizon. It will be exciting to see how the market evolves over the course of the next year, and this thought makes the next edition of AfricaCom an exciting one.

I am hoping to come back again to experience the next wave of transformation that the industry undertakes and visit the wind of change I experienced at the Cape of Good Hope!

Sandeep is responsible for Product Marketing of Subex’s Analytics portfolio. In addition to this role, he also looks after Public Relations and Analyst Relations for the company. He comes in with 9 years’ experience in the Marketing domain.

The holistic approach to securing IoT Ecosystems

With the convergence of the physical and digital world, IoT ecosystem is becoming more pervasive and smart. With its “connected” nature, the concept of securing the IoT ecosystem has taken precedence and has today become a necessity. It is no longer a question of “IF” IoT networks will get hacked, It’s “WHEN.”  Organizations should be concerned about what should be done “WHEN” the ecosystem is compromised.

The blog discusses the various risks the IoT boom poses, and the approached organizations need to adopt to safeguard themselves.

Read More

Note: Published with permission from Liveworx

As a digital service provider, your adoption of Internet of Things (IoT) services presents opportunities as well as challenges. The upside: IoT opens new revenue streams by providing always-connected services to digital subscribers. The downside: IoT exposes subscribers to identity theft and security breaches. Subex provides holistic cyber security to ensure that enterprises are safe from unauthorized access and intrusion across their network.Subex Secure offers comprehensive IoT security coverage from real-time discovery and monitoring to response and recovery. Our solution leverages a one-of-its-kind honeypot network that combines physical devices and device emulations to generate IoT / ICS signatures. Our system evaluates global identity and device breaches and updates the Subex Secure signature repository to safeguard your enterprise from new and emerging IoT threats.

Por qué Analíticas es la respuesta para el Director Financiero moderno?

Como bien dijo Gordon Gekko, en la película Wall Street (1987), “La mercancía más valiosa que conozco es la información”. Afortunadamente para las compañías de comunicaciones y sus Directores Financieros, no carecen de esta “mercancía valiosa”, la cual pueden aprovechar mediante analíticas.
Descubre cómo los Directores Financieros pueden aprovechar sus datos mediante analíticas de telecomunicaciones, para tomar mejores decisiones que impulsen el crecimiento y mitiguen los riesgos, viendo la grabación del webinar llamado “No te quedes atrás: una guía de Directores Financieros para aprovechar las analíticas avanzadas”, que tuvo lugar el 14 de diciembre.

Pero retrocedamos un momento.
El mundo de las telecomunicaciones, tal como lo conocemos, está evolucionando y, con él, el rol de los Directores Financieros también está experimentando un cambio drástico. Su papel ya no se limita a centrarse únicamente en el desempeño pasado, en los números y en la información financiera, sino que el mandato parece casi universalmente superado, y el Director Financiero necesita también proporcionar información sobre hacia dónde está yendo el negocio y cuán rápido lo está haciendo.
La participación de los Directores Financieros en la estrategia corporativa también se ha convertido en una parte integral del trabajo, ya que ahora tienen la capacidad y el mandato de contribuir directamente con la dirección del negocio, así como revisar e informar sobre su rendimiento. Todo esto significa que los Directores Financieros de hoy deben ser más estratégicos y necesitan asegurarse de que haya una mayor alineación con los imperativos estratégicos del negocio, y este requisito coloca al Director Financiero en el punto focal no solo para la presentación de informes financieros, sino también para los reportes gerenciales, además de mantener una hoja de balance sólida y saludable.
Pero, como sabemos, la naturaleza dinámica del entorno de las telecomunicaciones plantea múltiples obstáculos al Director Financiero moderno, que incluye -aunque no se limita- a lo siguiente:

_ Los CFO hoy en día deben asegurarse de que son capaces de aumentar el margen y el rendimiento de las ganancias.
Es un hecho bien conocido que los ARPUs han estado disminuyendo constantemente en todas las regiones del mundo y, junto con el lento crecimiento de los ingresos, está llevando a una erosión constante de los márgenes desde 2010 en la mayoría de las regiones. En medio de estos desafíos, el mandato de los Directores Financieros de aumentar los márgenes y el rendimiento de las ganancias es cada vez más crítico y difícil.

_Los intentos organizativos de aumentar los ingresos se están desinflando por errores y fugas.
Abordar las Fugas de Ingresos es una preocupación importante para los operadores de telecomunicaciones, y se está convirtiendo rápidamente en un mandato para los Directores Financieros, considerando que actualmente la mayoría de los equipos de RA reportan a ellos. Teniendo en cuenta que las Fugas de Ingresos tienen un impacto directo en el crecimiento de los ingresos, el rol del Director Financiero consiste ahora en tomar una postura proactiva en el tratamiento de cualquier error o pérdida.

_Evaluar los riesgos y desarrollar medidas para prevenir las violaciones de seguridad.
Al igual que las Fugas de Ingresos, las violaciones de seguridad y el fraude de telecomunicaciones pueden costarle mucho a los operadores, y es un obstáculo para asegurar que los Directores Financieros mantengan un balance sólido. $ 38.1 billones (USD) fueron perdidos por fraude en 2015 y, aunque el número está disminuyendo, las Telcos siguen sintiendo el impacto de perder dinero por fraude, y la tarea de resolver esto recae en el Director Financiero.

_Aumentar los Gastos de Capital durante un período de disminución de ingresos.
Una reciente encuesta realizada por TMForum, dirigida por Subex, reveló las siguientes conclusiones:
– 1 de cada 3 operadores no mide los rendimientos de la inversión en CAPEX.
– 77% de los encuestados considera que la utilización inadecuada de los activos lleva a un aumento de los costos.
– El 55% de los encuestados cree que la planificación de red se basa en suposiciones.
– El 64% cree que la planificación de capex está impulsada por la tecnología y no por los objetivos del negocio.
Por otra parte, los ingresos globales de CSP disminuyeron un 5,3% para el año terminado en marzo de 2016, mientras que el gas Responder a la volatilidad y velocidad de cambio
Las señales indican que los ingresos de los servicios tradicionales se estabilizarán en los próximos 10 años. De hecho, algunos analistas anticipan que los ingresos de los servicios de comunicaciones tradicionales se reducirán en un 50% respecto de los niveles actuales en 2025. Esto significa que los CSP deben adoptar la revolución digital y ya no pueden seguir siendo tontos sino que deben ser vistos como tubos inteligentes Al ofrecer servicios digitales y ser vistos como DSPs o incluso LSPs (Lifestyle Service Providers)to de capital aumentó, elevando los gastos de capital (capex/ingresos) a 19,8% para el año.

_Aumento de la competencia, incluso de los jugadores OTT.
Según Ovum, se espera que cueste a las Telcos un total combinado de $386 billones entre 2012 y 2018.

_Responder a la volatilidad y velocidad de cambio.
Las señales indican que los ingresos de los servicios tradicionales se estabilizarán en los próximos 10 años. De hecho, algunos analistas anticipan que, para 2025, los ingresos de los servicios de comunicaciones tradicionales se reducirán en un 50% respecto de los niveles actuales. Esto significa que los CSPs deben abrazar la revolución digital, y ya no pueden permanecer como conductos bobos, sino que deben ser vistos como tubos inteligentes que ofrezcan servicios digitales, y ser vistos como DSPs o incluso como LSPs (Lifestyle Service Pviders).
¡Y los retos no terminan ahí! Hoy en día, los Directores Financieros necesitan dedicar más tiempo y esfuerzo a gestionar el futuro en lugar de residir en el pasado y, por lo tanto, necesitan analizar aún más los datos analíticos para conectar los puntos y predecir el futuro. Para su ventaja, los Directores Financieros de telecomunicaciones poseen cantidades de datos sin precedentes, de múltiples fuentes, incluyendo datos de clientes y datos de red, y pueden aprovechar estos datos a través del poder de las analíticas de telecomunicaciones.
Si se aprovecha de la manera correcta, mediante la aplicación de analítica avanzada, los Directores Financieros de telecomunicaciones serán capaces de abordar los desafíos que enfrentan y lograr resultados empresariales que se alineen con su agenda, a través de la generación de conocimientos de telecomunicaciones accionables. Los Directores Financieros podrán tener una visión de 360 grados de su contexto de negocios e identificar e incluso predecir proactivamente los problemas, oportunidades y amenazas, y les ayudará a abordarlos antes de las auditorías internas. Por estas razones, ahora se ha convertido en el mandato del Director Financiero conducir analíticas para la toma de decisiones tanto estratégica como operativa.
Mediante la generación de Conocimiento de Telecomunicaciones, una Solución de Analítica Avanzada puede ayudar a los Directores Financieros a satisfacer las crecientes expectativas que se les imponen en los cambios en sus roles, permitiéndoles:
_Proactivamente predecir y dirigir recursos para contrarrestar los riesgos y aprovechar las oportunidades.
_Reducir la incertidumbre al prever los cambios disruptivos, y responder y adaptarse para crear oportunidades de crecimiento.
_Predecir Fugas de Ingresos y Fraudes para enfrentar los riesgos de manera proactiva.
_Predecir las redundancias y reasignar los presupuestos para reducir y controlar los costos.
_Aumentar el impacto de las decisiones de precios y promociones mediante la optimización.
La solución Analítica Avanzada de Telecomunicaciones tiene el alcance de ayudar a los Directores Financieros de los operadores de telecomunicaciones a cumplir los objetivos de negocio de manera drástica, e incluso hemos visto o, mejor dicho, ayudado a un CSP de Nivel 1, basado en Norteamérica, a ahorrar costos, simplemente ayudándoles a resolver disputas. A través de la generación de conocimientos de telecomunicaciones, la asociación ayudó al CSP a mejorar su ratio de predecir y resolver disputas a 9x, lo que a su vez les ayudó a ahorrar hasta unos millones de dólares. Este es el poder de la solución Analítica Avanzada de Telecomunicaciones.
Para obtener más información sobre cómo los Directores Financieros pueden aprovechar las analíticas de telecomunicaciones para maximizar los ingresos y mitigar los riesgos, vea la grabación del webinar “No te quedes atrás: una guía de Directores Financieros para aprovechar las analíticas avanzadas”, el 16 de febrero.

Senior Engineering and Analytics leader with experience in building passionate engineering and analytics teams, driving product and solution innovation, transforming engineering processes and developing leadership talent.
Currently as Head of Analytics Services, responsible for Business development, Analytics solution development and to build an excellent Data Science team.

Why Analytics is the Answer for the Modern Day CFO?

As Gordon Gekko from the movie Wall Street (1987), rightly said, “The most valuable commodity I know of is information.” Fortunately for telecom operators and their Chief Financial Officers, they possess no dearth of this ‘valuable commodity’, which they can leverage through telecom analytics

Find out how CFOs can leverage their data through telecom analytics, by gener to make better decisions to drive growth and mitigate risks by viewing the recording of the webinar on ‘Don’t Get Left Behind – a CFO Guide to Leveraging Advanced Analytics’, which took place on December 14th .

But let’s take a step back for a moment.

The telecom world as we know it is evolving, and with it, the role of the CFOs has also been undergoing a drastic change. His role is no longer confined to be solely focused on past performance, on the numbers, and on financial reporting, but the mandate seems almost universally to have been exceeded, with the CFO needing to also provide information about where the business is going and how quickly it is getting there. [1]

The CFOs involvement in corporate strategy has also become an integral part of the job, with CFOs now having the ability and the mandate to contribute directly to the direction of the business as well as reviewing and reporting on its performance1. This all means that today’s CFOs need to be more strategic and need to ensure that there is better alignment with strategic business imperatives and this requirement puts the CFO at the focal point for not just financial reporting but also managerial reporting, along with his core objective of maintain a strong and healthy balance sheet.

But, as we know, the dynamic nature of the telecom environment places multiple hurdles in the face of the modern day CFO, which include, but are not restricted to the following:

  • CFOs today need to ensure that they are able to increase margin and earnings performance
    • It is a well-known fact that ARPUs have been steadily declining in every region of the world, and coupled with slow revenue growth is leading to a steady erosion of margins since 2010 in most regions[2]. In the midst of these challenges, the mandate of CFOs to increase margins and earnings performances in becoming increasingly critical, and difficult.
  • Organisational attempts at growing revenues are being deflated by errors and leakage
    • Addressing Revenue leakages are a major concern for telecom operators[3], and is quickly becoming a CFO mandate considering currently most RA teams ultimately report to the CFO[4]. Considering that revenue leakages have a direct impact on revenue growth, it is now the role of the CFO to take a proactive stance in addressing any errors and leakages.
  • Assessing risks and developing measure to prevent security breaches
    • Like Revenue Leakages, security breaches and telecom fraud can cost operators heavily, and is an obstacle in the way of ensuring CFOs maintain a strong balance sheet. $38.1 Billion (USD) was lost to fraud in 2015, and though the number is decreasing YoY, telcos are still feeling the pinch of losing cash to fraud, and the task to resolve this lies with the CFO.
  • Increasing Capital Expenses during a period of decreasing revenues
    • A recent survey that was conducted by TMForum led by Subex revealed the following findings:
      • 1 in 3 operators do not measure returns on CAPEX investment
      • 77% of the respondents believed that inadequate asset utilization leads to increase in costs
      • 55% of the respondents believed that network planning is based on guesses
      • 64% believed that capex planning is driven by technology and not business objectives

Moreover Global CSP revenues declined by 5.3% for the year ended March 2016, while capex increased, pushing up capital expenses (capex/revenues) to 19.8% for the year.[5]

  • Increasing competition, even from OTT players
    • Which according to Ovum, is expected to cost Telcos a total combined $386 billion between 2012 and 2018
  • Responding to the volatility and velocity of change
    • The signs are that revenues from traditional services will plateau over the next 10 years. Indeed, income from traditional communications services is anticipated by some analysts to decline by 50% from current levels by 2025. This means that CSPs need to embrace the digital revolution, and can no longer remain as dumb pipes but need to be seen as smart pipes by offering digital services and be seen as DSPs or even LSPs (Lifestyle Service Providers)

And the challenges don’t just end there! Today CFOs need to spend more time and effort managing the future rather than dwelling in the past, and hence need to take an even closer look at data analytics to connect the dots and to predict the future. To their advantage, telecom CFOs possess unprecedented quantities of data, from multiple sources including customer data and network data, and can leverage this data through the power of telecom analytics.

If leveraged in the right way, by applying advanced analytics, telecom CFOs will be able to address the challenges they are facing, and achieve business outcomes that align with their agenda, through the generation of actionable telecom insights. CFOs will possess the power to have a 360 degree view of their business context and identify and even predict issues, opportunities and threats proactively, and will help them address them before internal audits. For these reasons, it has now become the mandate of the CFO to drive analytics for both strategic and operational decision-making.

By generating Telecom Insights, an Advanced Analytics Solution can help CFOs to meet the increasing expectations placed on their changing roles by enabling them to:

  • Proactively predict and direct resources to counter risks and leverage opportunities
  • Reduce uncertainty by predicting disruptive changes and respond and adapt to create growth opportunities
  • Predict revenue leakages and fraud to proactively address risks
  • Predict redundancies and reallocate budgets to reduce and control costs
  • Increase impact of pricing and promotion decisions through optimization

Advanced Telecom Analytics has the scope of helping CFOs of telecom operators meet business objectives drastically, and we have even witnessed, or rather helped a Tier 1 CSP, based in North America save costs by purely helping them resolve disputes. Through the generation of telecom insights, the partnership helped the CSP improve their hit ratio of predicting and addressing disputes to 9x, which in turn helped them save up to a few million dollars. Thus is the power of Advanced Telecom Analytics.

To find out more about how CFOs can leverage telecom analytics for revenue maximization and risk mitigation, view the recording of the webinar on ‘Don’t Get Left Behind – a CFO Guide to Leveraging Advanced Analytics’, on December 14th.

[1] http://www.ey.com/gl/en/issues/managing-finance/the-dna-of-the-cfo—perspectives-on-the-evolving-role—the-cfo-s-contribution

[2] https://www.strategyanalytics.com/strategy-analytics/news/strategy-analytics-press-releases/strategy-analytics-press-release/2015/01/23/global-trends-for-mobile-operators-show-stagnant-revenues-and-declining-margins#.WD-iJeZ9600

[3] https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/global-revenue-assurance-survey/Documents/global-revenue-assurance-survey.pdf

[4] https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/global-revenue-assurance-survey/Documents/global-revenue-assurance-survey.pdf

[5] https://www.ovum.com/research/communications-service-provider-csp-revenue-capex-tracker-1q16/

Senior Engineering and Analytics leader with experience in building passionate engineering and analytics teams, driving product and solution innovation, transforming engineering processes and developing leadership talent.
Currently as Head of Analytics Services, responsible for Business development, Analytics solution development and to build an excellent Data Science team.

Customer Analytics: Data Breaches and Consumer Trust

In this (possibly) final blog of this series I will be looking at how customers are becoming increasingly concerned at companies’ inability to keep their data safe, and how high publicity data breaches are eroding public confidence.

I previously wrote how it was possible to know where someone stood on issues of internet security just by checking their birth date. Those born after 1980, the so called Generation Y, or Millennials, are generally more comfortable sharing information online.   But things are gradually changing. In a 2014 survey by eMarketer it was found that Generation Y and Z were also becoming significantly more concerned about how well companies protected their personal data.

This concern can have a major impact on a company’s profits, as a recent report by the Ponemon Institute’s 2015 Cost of Data Breach Study (in conjunction with IBM) showed:-

Lost business has, potentially, the most severe financial consequences for an organization. The cost increased from a total average cost of $1.33 million last year to $1.57 million in 2015. This cost component includes the abnormal turnover of customers, increased customer acquisition activities, reputation losses and diminished goodwill. The growing awareness of identity theft and consumers’ concerns about the security of their personal data following a breach has contributed to the increase in lost business

By studying many data breaches across many industries, Ponemon have developed an approach whereby they can attach cost per record lost in order to estimate the cost of data breaches. What they have found is that, not only are data breaches becoming more common, but they are also becoming more costly.

The average cost paid for each lost or stolen record containing sensitive and confidential information increased 6 percent, jumping from $145 in 2014 to $154 in 2015.

2015 was perhaps the worst year so far for data breaches. NetworkWorld’s Top-10 data breaches of 2015 reported that many firms became the victim of very public data breaches including

  • Children’s toy companies (vTech)
  • Phone companies (T-Mobile, TalkTalk)
  • Healthcare firms (Premera, Anthem)
  • Dating agencies (Ashley Madison)
  • Government departments (IRS)
  • Security consultancies (Hacking Team)

+ Many more.

The trend does not look good, with the number of breaches predicted to increase in both size and cost for the foreseeable future.

Consumers are now realising that many companies are not vigilant enough in protecting their data, but just as bad, that customer data is being used in ways that are inappropriate and may adversely affect the consumer.

In a poll conducted by leading consultancy Radius Global 78% of internet users said they only purchased from companies they trusted.

The message is clear. If companies are to use customer’s data to provide a better service then they must do everything in their power to ensure the security of their systems and the responsible use of customer data, or run the risk of facing big fines and a catastrophic loss of consumer trust.

Big data and advanced analytics are forcing governments to bring in new regulations to ensure that companies use customer data responsibly, but it’s in every companies interest to ensure that the bond of trust is not broken.

Mark Jenkins

Mark Jenkins has worked in the IT industry for over 15 years as a BI and Analytics consultant, and more recently as ROC Product Manager for Subex Ltd. He has designed and deployed solutions for global companies in many sectors including Insurance, utilities and telecommunications. Mark holds a BSc Hons in Computer Science from Manchester University (UK).

Customer Analytics: Securing our Future

In the previous blog in this series I looked at how the use of persona, and creating customer journey maps for those persona, can give new insights on how to engage customers. By collecting customer data and tracking user interactions across all touchpoints, it’s possible to not only create an revealing profile of a customer’s interests and behaviour, but also better understand if the products and marketing are addressing customer’s wants and needs.

Technology is now rapidly opening up new sources of customer data including everything from health and well-being apps to our children’s activity online. Soon our heating systems, cars, refrigerators and every other connected appliance that’s about to hit the shelves will be churning out a stream of data back to the marketing departments of big corporations. The effective use of this big data undoubtedly has great potential to improve our lives, but there is also an increased risk that the individual’s privacy could be compromised, or the data could also be used to discriminate against an individual unfairly. In a recent case in the UK vulnerable customers were advised to buy energy on tariffs that were far higher than others available.   The same is true of insurance and medical care, and many cases exist where it’s been found that corporations are exploiting data to prey on the vulnerable. Add to this the substantial risks of identity theft and fraud as a consequence of data breaches, and consumers could be forgiven for feeling anxious about how well their data is being protected, and how it’s being used.

In an effort to stop corporations from exploiting big data negatively and better protect consumers the European Union has raised the bar on data protection by drafting the the General Data Protection Regulation (GDPR). This new set of rules will apply not only to countries within the EU, but also to companies operating outside the EU, if they have networks or trade data with partners within the EU. Enforcement is expected to start in the spring of 2018.

The European commission’s website states that:

The objective of this new set of rules is to give citizens back control over of their personal data, and to simplify the regulatory environment for business.

Furthermore, as reported by consultancy group itgovernance,

The Regulation will enforce tough penalties – proposed fines up to 4% of annual global revenue or €20million, whichever is greater

For a large multinational the fines could get very substantial and significantly impact on share prices.

The GDPR sets out 8 Data Protection Principles that must be followed. The ICO, UK’s independent Information Commission, has provided clarification of how these principles need to be applied. For example, Principle 1 refers to Processing personal data fairly and lawfully. As described on their website,

In practice means that you must:

  • have legitimate grounds for collecting and using the personal data;
  • not use the data in ways that have unjustified adverse effects on the individuals concerned;
  • be transparent about how you intend to use the data, and give individuals appropriate privacy notices when collecting their personal data;
  • handle people’s personal data only in ways they would reasonably expect; and
  • make sure you do not do anything unlawful with the data

Perhaps one of the key new areas is in the use of big data and analytics for customer profiling. This is covered under Principle 6 of the GDPR under the somewhat obtuse description of ‘automated decision making’. ComputerWeekly have produced a number of documents and guides to help businesses to understand how the GDPR will affect them. In one of their latest blogs they explain

The regulation introduces a number of restrictions on profiling, including the right for an individual not to be subject to a decision which significantly affects the individual and which is based on automated profiling. In many cases, profiling will only be permitted where the explicit consent of the individual has been obtained. 

The implications for targeted marketing are unclear, but potentially significant, as it makes companies accountable for ensuring that customers

  1. Are made fully aware of exactly how their data will be used
  2. Explicitly agree to the way in which the data will be used
  3. Do not suffer any negative consequences from the use of their data.

As ComputerWeekly reports

These restrictions are likely to have a considerable impact on businesses engaging in, for example, big data analytics, as well as more general business activities, such as credit scoring and employee monitoring

In an article by the International Association of Privacy Professionals , they add that data subjects (customers)

…may also request to know the purposes of processing, the period of time for which data will be stored, the identity of any recipients of the data, the logic of automatic data processing, and the consequences of any profiling.

Corporations are now in real danger of drifting into a situation in which they are in breach of the new regulations, face substantial fines and seriously damage customer relations.

In the final blog of this series I will be looking at how customers are becoming increasingly concerned at the inability of corporations to keep their data safe, and how high publicity data breaches are eroding public confidence.

Mark Jenkins

Mark Jenkins has worked in the IT industry for over 15 years as a BI and Analytics consultant, and more recently as ROC Product Manager for Subex Ltd. He has designed and deployed solutions for global companies in many sectors including Insurance, utilities and telecommunications. Mark holds a BSc Hons in Computer Science from Manchester University (UK).

Customer Analytics: Walking in the Customers Shoes

In the first blog in this series on customer analytics, the technique of Customer Journey Mapping (CJM) was discussed as a way to follow how customers move from one touch point to the next, and track their emotional well-being during those interactions. In the last blog I described how using a persona to represent a group of customers would allow marketing to get a better understanding of customers. In this blog I will explore how Customer Journey maps can be created for persona to visualize an idealized journey for the group represented. This is now becoming a well-accepted technique for not only improving user experience in software design, but also in the design of products, digital and conventional marketing channels, architecture and many other areas.

There are two basic approaches for creating persona. One is to base the persona on in-depth research of the customers within a market segment, and the other is to base the persona on intuition, sometimes referred to as a provisional persona. In reality, it makes most sense to use a combination of research and intuition, and then verify the persona with those who have front line contact with customers. Generally customers belonging to a company’s biggest market segment would be targeted first and a primary persona is created to represent them. If the team creating the persona do not have direct knowledge of the customers in that segment then they will need to conduct research to understand the values and motivations of the group.

Once a persona has been defined then it’s possible to look at how the company would engage that persona in a sale, and the hope is that the persona would follow each engagement at every touchpoint, even long after they’ve made the purchase and are using the product. The framework for this is known as the Customer Lifecycle. There are many versions of this but they all share some basic stages, as described by Jim Sterne and Matt Cutler in a paper called “E-metrics, business metrics for the new economy

  • Reach: Trying to get the attention of the people we want to reach.
  • Acquisition: Attracting and bringing the reached person into the influence sphere of our organization. 
  • Conversion: When the people we reach or have a more established relationship with, decide to buy something from us.
  • Retention: Trying to keep the customers and trying to sell them more (cross-selling, up-selling).
  • Loyalty: We would like the customer to become more than a customer: a loyal partner and even a ‘brand advocate’ Moments of truth

This can be represented either horizontally or in a circular lifecycle type chart

The Customer Life Cycle – Source: E-Metrics Business Metrics for the New Economy by Jim Sterne and Matt Cutler

The persona journey describes how it’s anticipated that a particular persona would move through the lifecycle. It would describe the channels through which it’s expected they are made aware of a product, how it’s expected they would research the product and what would motivate them to make a decision to buy. Key points in the journey where customers decide whether to continue or abandon the process are known as ‘Moments of Truth’, a term coined by Jan Carlzon, the well-known CEO of SAS Airlines who turned the company around in just a couple of years.

Walking in the customers shoes in this way is not easy, and would normally be done as a workshop with representatives from across an organisation, but it’s an exercise that can provide many useful insights. Service quality gaps, cross channel alignment, ways to better engage customers and align internal teams are just a few of the many benefits that come from journey mapping. When idealised journey maps are compared with the actual journeys that customers take then many preconceived ideas about how customers see and engage with the company may get thrown out and fresh ways to engage, retain and acquire new customers be discovered.

In the next part of this customer analytics based series of blogs I will be looking at the security implications of big data and advanced customer profiling, and how regulators around the world are trying to protect an individual’s right to be treated equally by large corporations.

Mark Jenkins

Mark Jenkins has worked in the IT industry for over 15 years as a BI and Analytics consultant, and more recently as ROC Product Manager for Subex Ltd. He has designed and deployed solutions for global companies in many sectors including Insurance, utilities and telecommunications. Mark holds a BSc Hons in Computer Science from Manchester University (UK).

Customer Analytics : Meeting the Model Me

In my last blog I discussed how different generations are challenging marketing departments to meet them on their own ground. For one key demographic, the Millennials, that ground is the mobile and highly social world in which these digital natives live. For another, the more cost conscious middle aged parents with teenage kids, the battleground is through more conventional channels. However it’s not enough to just choose the right channel for marketing a product. The products, product branding, and marketing language itself needs to be appropriate for those customers as well. Different customers have not only different expectations of the products they use, but also different expectations of the way they like to be told about those products.

The one thing all customers have in common is that they like to be treated as individuals. Individualism is a relatively recent phenomenon in human history, although it could be said to have first really been expressed by Jean-Jacques Rousseau (1712-1778), as Angus Jenkinson identified in his paper ‘Beyond Segmentation’. Rousseau says that truth is subjective, and that traditions and customs must pass the individual’s test ‘can they be authentic for me’. That is a test that consumers increasingly appraise every product with. Can it be authentic for me?

It may seem an impossible challenge to treat every customer in a way which is appropriate to them alone, but there is another approach which can help product designers and marketing departments have a much better understanding of customers, and that is through the use of persona.

The concept of archetypes and persona was formalized early in the 20th century by the Swiss psychologist Carl Jung, but it was the Angus Jenkinson who more recently defined the meaning in a marketing context. Jenkinson suggested that marketing needed to move beyond the top down reductionist approach of segmentation and take a more bottom up approach of grouping customers with similar attitudes and behaviors.

‘segmentation, as normally understood, represents only the first stage in response to the market (individualism) phenomena. It is the first breakdown of the monolithic market into smaller units. It is possible to go further.’

There are definitely strong similarities between the concepts of segmentation and grouping, but there is a fundamental, if subtle difference. It is the difference between gathering individuals into groups, as opposed to dividing the group into segments. As Jenkinson says,

It is much easier to think of developing a relationship with a group (of people) than a segment. How many segments do you personally have a relationship with? Do you want to be part of one? A group connotes…a community of individuals.

Consumers, as individuals tend to gravitate and have loyalty towards something. To change the corporate perception of customers from being part of a segment to being individuals in a group is a fundamental paradigm shift in building customer relationships, and it requires marketers to develop a much more personal understanding of their customers. Marketers have to understand customer goals and frustrations, their values and behaviors. It is with this new understanding of the importance of the individual that the marketing concept of the ‘persona’ has arrived. Personas are ‘model’ characters created to represent all the members of a group. The term persona as used in this context was actually coined in 1999 by Alan Cooper in his seminal book ‘The Inmates Are Running the Asylum’, in which he says that persona, among other benefits,

Provide a human “face” so as to create empathy for the persons represented by the demographics.

Not only do persona models give a detailed account of the emotional needs and values of that group, they often even include a picture of what a typical individual in that group may look like. This is not to say that segmentation is dead. Far from it. Segmentation is still an important tool to help identify the key groups of ideal buyers, but once those groups have been identified then persona need to be created for the segments to give them emotional characteristics and values that they can be identified with. Only by understanding what really motivates customers and providing products that fit in with customer’s lives can marketers grow brand loyalty and trust in a world where the customer is truly king.

In the fourth in this series of customer analytics blogs, Walking in the Customers Shoes, I will be looking at combining the concept of persona with customer journey mapping to understand how to deliver a better customer experience.

Mark Jenkins

Mark Jenkins has worked in the IT industry for over 15 years as a BI and Analytics consultant, and more recently as ROC Product Manager for Subex Ltd. He has designed and deployed solutions for global companies in many sectors including Insurance, utilities and telecommunications. Mark holds a BSc Hons in Computer Science from Manchester University (UK).

Customer Analytics : Gen X and Y and the Millennial Divide

We live in a world where technology is like a digital liquid that’s flowed around every aspect of our lives. There’s no doubt that technology can help to oil the craggy wheels of daily life, and while some find this enabling and liberating, others consider the intrusion to be more insidious. Working out where people stand on this issue is generally just a simple matter of checking their birth date. Many born before 1980 tends to view social and on line everything with suspicion, whereas those consumers born after that date, referred to as Generation Y, or Millennials, are far more comfortable with social media and sharing everything online. In a recent report from Pew research it was shown that the Millennials are much greater users of social media than their parents.

This is probably because Millennials are the first generation that have grown up entirely with the internet and mobile phones.  They are ‘digital natives’. It’s difficult to know exactly what effects this has on general culture, but one surprising change is that Millennials tend to be far more optimistic that their parents were when they were young. While Generation X and before are more inclined to have a cynical and pessimistic attitude towards the future, a recent report by the Pew Research Centre, Millennials in Adulthood, has found that, despite feeling detached from politics or religion and burdened by debt and recession, the Millennials are inexplicably much more optimistic. According to a recent Gallup poll, eighty percent of millennials, aged 18 to 29, feel positive about the future and say their standard of living is improving.  The reasons for this relentless optimism are unclear but researchers at Pew have pondered that it may be down to more nurturing parenting, or perhaps it’s because millennials always feeling at the centre of their own social network.

Another characteristic of the millennial generation is that, contrary to predictions that technology would free us all from work, they are now working harder and are more driven to succeed than ever before. In his book ‘Generational Teaching: Motivating the Minority’ Christopher Alan has also found that Millennials are ‘more polite and considerate’, ‘attentive and respectful’ and prefer to work in teams rather than in a hierarchy. Goldman Sachs also says that they are also more health conscious and savvy than earlier generations.   But, as ever, the picture is never that simple, because it seems that the Millennial generation is itself divided in two, as Pew Research has written

Just 40% of adults ages 18 to 34 consider themselves part of the “Millennial generation,” while another 33% – mostly older Millennials – consider themselves part of the next older cohort, Generation X.

This all has very great implications on marketing, and how companies should reach out to different generations. Connecting with customers is one of the greatest challenges marketers face, and capturing Millennials is now one of the key battlefields for competing companies. As Leah Swartz of Millennial Marketing says

‘When it comes to fashion and shopping, there isn’t a more important demographic for retailers to reach than millennials.’

Goldman Sachs have even put together an infographic dedicated to marketing to Millennials in which they identify several key things to consider when marketing to the ‘largest generation in US history’. In summary they are

  • Living at home longer
  • Marrying later
  • Sharing, not owning
  • Exercise choice in purchasing
  • More health conscious

From a non-millennials perspective it may seem that they are so immersed in instant messaging and playing computer games that they are oblivious to the real world, but, on the contrary, millennials are very much aware of the state of the world. It’s just that this revolution is a lot quieter than the ones before, taking place as it does silently from the screens of our phones and laptops. The silence is an illusion. The volume of noise is now measured in packets of data rather than decibels, and it’s loader than ever. If companies don’t engage with different generations of customers on their own ground then they will not be heard at all.

In my next blog I will look at how Millennials and other demographic groups can be better served by adopting a customer-centric approach to marketing.

Mark Jenkins

Mark Jenkins has worked in the IT industry for over 15 years as a BI and Analytics consultant, and more recently as ROC Product Manager for Subex Ltd. He has designed and deployed solutions for global companies in many sectors including Insurance, utilities and telecommunications. Mark holds a BSc Hons in Computer Science from Manchester University (UK).

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