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Category Archives: Telecom Insights & Analytics

Why Analytics Alone is Insufficient for Telcos Seeking Increase in CX and Profitability?

The past decade has seen the telecom industry embark upon a momentous growth path. The number of unique mobile subscriptions worldwide has almost doubled from 2.6 billion in 2009[1] to 5.1 billion[2] in 2019, thanks to the quick evolution from 2G to 3G, 4G, and now 5G, along with innovations in IoT, M2M, Artificial Intelligence (AI) and cloud computing. While this growth phase has led to the industry accumulating humongous amounts of data, a majority of them have not reaped the benefits of monetizing the data at their disposal—similar to how Facebook, Google or the many others are successfully doing.

Data monetization is vital for Telcos to stay ahead

Telcos are advantaged by a unique position in the ICT value chain. For example, a simple event such as planning a holiday today involves using your smartphone for a variety of tasks—from booking flights and hotels to researching the best places to explore. All of these result in the generation of varied datasets, to which telcos have access to. However, a complicated ecosystem of challenges is preventing telcos from successful internal and external data monetization.

As Telcos continue to face increasing pressure in their top-line business, internal data monetization can bring them a strategic advantage in solving business problems. From the understanding of revenue trends such as the accurate pinpointing of developments in the voice or data business to gaining deep insight into customer likes and dislikes, data analytics can address several business issues. Similarly, external monetization opens opportunities for telcos in a range of industry verticals.

However, to stay relevant in the market, telcos will have to stay ahead on the trends, which can lead them to opportunities. Messaging (SMS), which was an exclusive offering of telcos has now been taken up by players like WhatsApp and Facebook Messenger. Employing data analytics to analyze and predict trends is the only way to stay ahead.

Why analytics alone won’t help?

Several leading telcos have already realized the power that lies in data analytics as a key strategic pillar and continue to invest in advanced data technologies. However, the ROI for data analytics investments by telcos continues to stand unproven, especially on an incremental basis. The reason: Most telcos view data analytics as a technology asset, leaving open a wide gap between technology and business goals. This severe lack of coordination has resulted in analytics and data science being viewed as a technology solution rather than a business problem, causing business goals to suffer.

The answer lies in domain-driven analytics

For telcos seeking to stay competitive, domain-driven analytics is the answer. Spearheaded by deep domain knowledge and wide industry exposure a domain-driven analytics solution understands the requirements of telcos operating in specific regions or market conditions. Through the analysis of existing data sets, domain-driven analytics can transform current stats into future possibilities.

Take the successful use case of how a telco in a developing market used domain-driven analytics to increase revenue. The telco was using its existing business model of acquiring more customers to increase revenue. Using domain-driven analysis, however, it was found that the current ‘active base’ which was 8.5 days needed to be improved in order to increase revenue. The telco used the recommendations and conducted an integrated campaign which led to the increase of the ‘active base’ from 8.5 to 9.5 days and a boost in revenue by 25%.

With 25+ years of experience in driving data-driven business transformation for global telcos, Subex has garnered a lot of experience in applying domain-driven analytics for telecom.

[1] https://www.budde.com.au/Research/Global-Telecoms-The-Big-Picture-2019-Key-Industry-Statistics

[2] https://www.gsmaintelligence.com/

 

To find out more about how domain-driven analytics can impact your ROI, Increase Customer Experience and Profitability.

Download the webinar recording now!

The 6 worst pitfalls of not having an Analytics Maturity Assessment in place

Most organizations use analytics to improve their operations to enhance business performance and growth. However, through our experience of working with telecom organisations across various geographies, we have witnessed that analytics in many cases is done in an ad-hoc manner rather than in a planned phase. This results in organisations not witnessing the kind of return they were expecting from their analytics investments. An Analytics Maturity Assessment (AMA henceforth) helps in identifying such pitfalls and avoiding them. Few of the pitfalls that AMA helps in identifying are:

  1. Data Issues & trust: The root of any analytics project is the Data element. It is important that the end user does not have any form of data trust issues when it comes to their data. Proper data capturing, storing, infrastructure design, validation etc. are important dimensions which AMA investigates with proper checks and balances based on industry standards.

 

  1. Lack of Clarity: The first step to having clean data comes from having a good understanding of the data. There are basic graphs, queries, questions that every data analysis requires at the start of any project. For companies to be truly data driven, a Data Analysis pack consisting of the above elements and beyond is necessary. AMA checks these points to help figure out whether the first cut is robust enough. This understanding, the results of such a pack, is essential not only for the analytics team but helps business users as well gather lots of useful insights.

 

  1. Lack of Business Understanding: Analytics is a means to an end and not an end in itself. The intention is to help the organization improve on its top line, bottom line and operational efficiency. This is not possible unless the analytics team has a good understanding of the business as well the business team clearly understands what analytics can bring to the table. Synergy between the two is needed for implementable outcomes. The analytics solution should answer the questions that the end user wants to know. AMA helps in avoiding this pitfall or checks the status quo by having multiple checklists such as SMEs, trainings, meetings, presentations on this dimension.

 

  1. Improper Implementation: After what is to be done is clear, how it is done is essential for effective implementation. Ad hoc project work and repetition of same mistakes are cost centers for organizations. There must be standard practices for project implementation.

 

  1. Information Asymmetry: Having to constantly reinvent the wheel is another cost factor which takes the essential time of resources. This issue is usual the result of teams working in silos and not functioning as a larger team. Often similar analytics projects are undertaken in different verticals such as say finance and operations. This is another grey area which AMA helps in identifying and avoiding.

 

  1. Missing dollar accountability: Many organizations do not have long term vision in place. In these cases, analytics becomes good to have but it remains just a cost center. The vision and purpose of analytics needs to should come from the top and be clearly identified and communicated. Each project’s expected outcomes should be predefined and once implemented, its ROI calculated. This is essential for the integration of analytics into the DNA of the organization for it to be able to make a string contribution to the growth story.

Conclusion:

It is essential for every organizations to take stock of the situation after certain intervals. It is even more important when trying to inculcate something very different and new within the organisation to bring about a mindset/cultural change. Most of organizations are investing in analytics but find using it effectively difficult. AMA helps in streamlining this change. It helps in asking pertinent questions and figuring out the change methodology. As noted above, there are quite a few pitfalls of not having an AMA for an organization, and not having an AMA in place can be expensive considering the associated risks.

To understand more on how you can adopt an AMA within your organisation, view a recent webinar we had conducted on the topic.

Click here to view the webinar

The Road to Being Data-Driven Starts with Knowing Where You Are

The telecom world is changing, and organisations are challenged to not only grow, but to merely stay relevant.  To cope up with the fast-changing environment, organizations need to be at a certain level of maturity where the decision-making process needs to move from gut feelings to number & reasoning-based practices. The mandate here is clear: Organisations need to become data-driven or risk being left behind. However, the reality is bleak considering that nearly 100% of enterprises want to become more data-driven, but only less than a third have accomplished that goal. The starting point to being data-driven starts with being able to assess where one stands, and which is the best way to move ahead to a certain objective, a notion which continues to remain challenging for organisations.

Almost all organisations have ventured into the woods of data analytics with a purpose to make a sense and get the best out of the huge volumes of data they have. Sometimes they ask what others (either in the same industry or across industries and academia) are doing and how they can replicate it, while at times they ask what new can be done that no one else has. To analogize the entire data analytics practice to the workings of an engine, an engine can be only as good as the sum of its parts. The parts must fit in well, the oiling mechanisms should help in friction reduction, the oil supply has to be timely and of course, the sparks need to be perfect. As many say, data is indeed the new oil and data analytics is fast becoming the engine (in this case, of growth).

Fine tuning this engine is the need of the hour. Assessing where we stand, which directions we can move towards and where would that lead us to, what would be the best enabler to move in each direction, and how to go about doing it, is mission critical. This, in itself, is an optimization problem where maximizing returns and minimizing costs given the multiple constraints is challenging.

Transformation is important, but to ensure true competitive advantage, organizations must transform themselves in a planned phase. The approach to analytics cannot be stochastic as it would result in more troubles than benefits. Organizations must traverse one stage at a time. Not only defining those stages is the need of the hour but also is knowing what steps one needs to take at a point of time to move from one stage to another. In this scenario, an Analytics Maturity Assessment becomes imperative.

We have been working with customers across the globe in helping them assess their Analytics Maturity, to define the business objectives and carve out an Analytics roadmap towards said objectives, through our Subex Analytics Maturity Models. Subex Analytics Maturity Models defines those stages and the steps between those stages, through an assessment across People, Process, Technology and most importantly Data.

To know more about why an Analytics Maturity Assessment is important, and how it can help your organisation, Schedule a Demo with us and our Subject Matter Experts will get in touch with you.

Addressing the Trust Gap. It is Possible

In our previous blog, we spoke about how in today’s world of rapid and constant change it has become ever so important to make the most of real-time inflow of data. Data is the new oil – and like oil, data needs a refinery before it is used across business use cases. To quickly take a step back, this trend always reminds me of the comic Tintin and The Land of Black Gold – “Boom! … One day your car goes Boom!”. The plot revolves around car engines exploding because of faulty petrol at its source. Similarly, if data is not clean at the source, your business decisions are bound to go “BOOM”!

‘TinTin: Land of Black Gold’ by Hergé

 

Analytics has been commoditized today, with the entry of open source tools and technologies. However, there is a significant trust gap when it comes to the consumption of analytics. How much do you trust your data? How significant is the output of analytics in the organisations board meeting? While in our last blog we looked deeply into the trust gap and its roots, at the end of the day, we need to realise that analytics is just an application of Math-Technology-Business on data. So, if we believe in Mathematics, have faith in the technological revolution and are confident of our business intuition, there is no reason for analytics not to be considered as the most critical function – all that remains is refining the oil, i.e., data.

We at Subex, recognize and respect this trust gap. We also believe an analytics strategy should build around the golden triangle – People, Process, and Technology.  The first and most critical step would be to have analytics done in a democratized manner. Everyone in the organization, from the C-Level, to the Department Head level, to the Analyst level should be armed to be data-driven. The involvement of machine should not undermine the trustworthiness, nor should it lead to a decrease in human involvement; instead, you should leverage the best of both human and machine intelligence to improve products, enhance the quality of service (QoS) and derive more returns from your investments.

Does Human Intelligence + Machine Intelligence = Trust?

Taking the Human Intelligence + Machine Intelligence philosophy into account, we have come up with a concept known as Subex ACT (Analytics Centre of Trust), designed to bridge the Trust gap by covering the end-end cycle of Data-Insights-Decisions (D.I.D.). Let us take a quick look at the three pillars of our ACT program:

  1. Defining a Strategy

Before starting the analytics journey, it is imperative to assess the following

  1. What is the analytical maturity of the organization?
  2. What are my objectives from the analytical program vis-à-vis the business vision
  3. Do I have a roadmap in place?

The main Objectives of this process are:

  • Setting up the goals for the organization: The Strategy can help deliver competitive advantage, create incremental revenue opportunities, and reduce costs.
  • Assessing your analytics maturity vis-à-vis your goals: Understand where you are in terms of your analytics maturity and identify the target maturity which will help you reach the goals defined in step 1
  • Plan for the Transition: Understand how you will transition from your current maturity level to the desired maturity level and ensure the process is time-bound, tangible and step-wise. What we recommend is that you identify tangible use cases, such as churn, and move the analytics maturity of addressing churn from, say, 3 to 4. Once that is completed, define another use case and increase the maturity to address that similarly
  1. Setting up an Information Infrastructure

Post defining the analytical strategy it is imperative we have the right set of tools to handle the task at hand. The tools which organisations need today need to be the following:

  • Agile: Create the ability to address the problem statements based on the requirements
  • Scalable: Should be able to handle massive volumes and different types of data
  • Reliable: The information that is generated by the system needs to be trustworthy
  • Real-Time: For quick and accurate decision making the reports should be in real-time
  • API Integration: The tools should be compatible with API-based integration
  • User-friendly: Consumption of the reports/data should be easy to use
  • Secure: The tool should be compliant with security guidelines
  • Self-Serviceable: Accessible UI enabling the end user to self-generate reports

Such an Information Infrastructure should offer a self-service reporting environment wherein each stakeholder gets the access to the tools to analyze and act upon the information. This will not only reduce the time gap in execution but raise the operational efficiency to a new level. As the model evolves into an Analytics Centre of Trust (ACT), the transformation journey becomes smooth.

  • Analytical Driven Business Outcomes

The final piece of the Analytical Framework, is clearly towards the analytical output. For too long, organisations have set up analytics practices with a mandate towards delivering on analytics outcomes. Subex is of the firm belief that the key to analytics is to attain business outcomes while ensuring insights are available across all audience levels in a democratized fashion which is easily understandable.

Conclusion

The world of digital technologies is open for Telcos to build new business opportunities as well as excel on the existing ones. It’s time to identify the gaps in your analytics strategy and develop an ACT that helps you climb the ladder faster. As an organization is preparing to capture the active markets, your analytics goals must focus on using information as a strategic asset to generate revenue, improve operational efficiency and provide best-in-class customer service.

In our next blog, we will cover how Subex ACT helps CSPs regarding addressing these three pillars and how it helps bring Agility, an Analytics to Business mindset and Democratization through Consumable Outcomes to your organisation.

This blog has been co-authored with Sandeep Banga. 

“Empowering Business Assurance with Artificial Intelligence” at Digital Transformation World 2018

TMForum recently concluded Digital Transformation World 2018 event at Nice, France. As the name indicates the key theme of the event was on enabling telecom operators to move their business to the digital world. The event was bustling with fresh ideas, innovations and technology which have the potential to cause disruption in the telecom industry. I represented Subex at the event and we participated in one of the catalysts. Catalyst projects are rapid collaboration initiatives driven by Forum member companies. Forum members work together to create proof-of-concept demonstrations for today’s most pressing business, operational and IT challenges.

The catalyst that Subex participated was “Empowering Business Assurance with Artificial Intelligence”. The catalyst goal was to bring in Artificial Intelligence(AI), Machine Learning & Big Data Analytics to empower the assurance teams in the world of digital transformations. This catalyst had enabled Subex to collaboratively deliver not only solutions for problems that can be solved using advanced analytics but also to create best practices and standards, helping hundreds of Forum member companies reduce cost, risk, and time-to-market as they transform for success in the digital world.

The use cases we worked on for the catalyst focussed on using AI based Machine learning techniques and advanced analytics to:

  • Enable Telcos to track fraudsters faster and minimize revenue loss caused by arbitrage
  • Allow KPI tracking and anomaly detection with a minimal manual intervention
  • Help Telcos differentiate fraudsters from genuine customers by identifying important features

Telcos we interacted at the event were very impressed with how AI & Machine learning can help them  manage challenges in the digital world.

The highlight of the keynote at the event was on the open Digital architecture and open APIs which provide a platform to rapidly partner and innovate, to deliver business and technology integration between the companies. The biggest announcement at the keynote was on one of the excellence awards, Reliance Jio from India was announced for an award for ‘Business transformation’ for making greatest strides in transforming its business operation to a low cost, agile and customer-centric model.

The other topics that were covered in the catalyst initiative were Block Chain Unleashed, Blade Runner, Smart Cites, Cognitive Customer care. Most of the catalysts and their theme was around disruptive technologies such as Blockchain platforms, Internet of Things, and Machine learning. This is a clear indication that industry is moving towards using these cutting-edge technologies to solve some of key business problems Telcos are facing today.

The most exciting part of the 3-day event was the Catalyst awards. Of the 25 catalysts that were part of the catalyst program, our catalyst won an award for Outstanding Contribution to TMForum Assets. We were thrilled and excited for having got the award. For me, key take away from the event is, in the road to digital transformation Telcos are looking at OSS/BSS not only as watchdog systems to monitor revenue leakages & frauds but are exploring ways by which these systems can help them generate revenues. We as Subex need to look at delivering to value to our customers considering these business assurance needs.

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!

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.

But let’s go back a moment.
The world of telecommunications, as we know it, is evolving and, with it, the role of Financial Directors is also undergoing a drastic change. Its role is no longer limited to focusing solely on past performance, numbers and financial information, but the mandate seems almost universally exceeded, and the CFO also needs to provide information on where the business is going and how fast it is doing.
The participation of the Financial Directors in the corporate strategy has also become an integral part of the work, since they now have the capacity and the mandate to contribute directly to the business management, as well as to review and report on their performance. All this means that today’s Financial Directors must be more strategic and need to ensure that they are more aligned with the strategic imperatives of the business, and this requirement places the Financial Director at the focal point not only for the presentation of financial reports, but also also for management reports, in addition to maintaining a solid and healthy balance sheet.
But, as we know, the dynamic nature of the telecommunications environment poses multiple obstacles to the modern CFO, which includes – but is not limited to – the following:

_ CFOs today must ensure that they are able to increase the margin and return on profits.
It is a well-known fact that ARPUs have been steadily declining in all regions of the world and, together with the slow growth of revenues, is leading to a steady erosion of margins since 2010 in most regions. In the midst of these challenges, the Financial Directors’ mandate to increase margins and profit performance is increasingly critical and difficult.

_ Organizational attempts to increase revenue are deflating due to errors and leaks.
Addressing Income Leaks is a major concern for telecommunication operators, and it is fast becoming a mandate for Financial Directors, considering that currently most of the RA teams report to them. Given that Income Leaks have a direct impact on revenue growth, the CFO’s role now is to take a proactive stance in the treatment of any error or loss.

_Evaluate the risks and develop measures to prevent security breaches.
Like revenue leaks, security breaches and telecommunications fraud can cost operators a lot, and is an obstacle to ensuring that CFOs maintain a solid balance sheet. $ 38.1 billion (USD) were lost due to fraud in 2015 and, although the number is decreasing, Telcos continue to feel the impact of losing money due to fraud, and the task of resolving this lies with the Chief Financial Officer.

_Increase Capital Expenditures during a period of decreased income.
A recent survey conducted by TMForum, led by Subex, revealed the following conclusions:
– 1 in 3 operators does not measure the returns on investment in CAPEX.
– 77% of respondents consider that the inappropriate use of assets leads to an increase in costs.
– 55% of respondents believe that network planning is based on assumptions.
– 64% believe that capex planning is driven by technology and not by business objectives.
On the other hand, CSP’s global revenues decreased by 5.3% for the year ended March 2016, while gas responded to volatility and speed of change
The signs indicate that revenues from traditional services will stabilize in the next 10 years. In fact, some analysts anticipate that revenues from traditional communications services will be reduced by 50% from current levels by 2025. This means that CSPs must embrace the digital revolution and can no longer be stupid but must be seen as smart tubes By offering digital services and being seen as DSPs or even LSPs (Lifestyle Service Providers) to capital increased, raising capital expenditures (capex / revenue) to 19.8% for the year.

_Increased competition, even from OTT players.
According to Ovum, it is expected to cost the Telcos a combined total of $ 386 billion between 2012 and 2018.

_Responder to volatility and speed of change.
The signs indicate that revenues from traditional services will stabilize in the next 10 years. In fact, some analysts anticipate that, by 2025, revenues from traditional communications services will be reduced by 50% from current levels. This means that CSPs must embrace the digital revolution, and can no longer remain dumb channels, but should be seen as smart tubes that offer digital services, and be seen as DSPs or even as LSPs (Lifestyle Service Pviders).
And the challenges do not end there! Today, CFOs need to devote more time and effort to managing the future rather than residing in the past and, therefore, need to further analyze the analytical data to connect the dots and predict the future. To their advantage, Telecommunications Financial Managers possess unprecedented amounts of data, from multiple sources, including customer data and network data, and can take advantage of this data through the power of telecommunications analytics.
If taken advantage of in the right way, through the application of advanced analytics, Telecommunications Financial Managers will be able to address the challenges they face and achieve business results that align with their agenda, through the generation of actionable telecommunications knowledge. CFOs can have a 360 degree view of their business context and identify and even proactively predict problems, opportunities and threats, and help them address them before internal audits. For these reasons, it has now become the mandate of the CFO to conduct analytics for both strategic and operational decision making.
Through the generation of Telecommunications Knowledge, an Advanced Analytics Solution can help Financial Managers to meet the growing expectations placed on changes in their roles, enabling them to:
_Proactively predict and direct resources to counteract risks and take advantage of opportunities .
_ Reduce uncertainty by anticipating disruptive changes, and respond and adapt to create growth opportunities.
– Predicting Income and Fraud Leaks to face risks proactively.
_Predending redundancies and reassigning budgets to reduce and control costs.
_Increase the impact of pricing decisions and promotions through optimization.
The Advanced Telecommunications Analytics solution has the scope to help the Financial Directors of telecommunications operators to meet business objectives drastically, and we have even seen or, better said, helped a Level 1 CSP, based in North America. , to save costs, simply by helping them resolve disputes. Through the generation of telecommunication knowledge, the association helped the CSP improve its ratio of predicting and resolving disputes to 9x, which in turn helped them save up to millions of dollars. This is the power of the Advanced Telecommunications Analytics solution.
For more information on how CFOs can take advantage of telecommunication analytics to maximize revenue and mitigate risks, see the webinar’s recording “Do not Stay Back: A Guide for Financial Managers to Take Advantage of Advanced Analytics,” on March 16. February.

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/

Does a Digital Lifestyle offer Operators opportunities, or is the path more ominous?

It stands to reason that the Digital lifestyle of consumers will dramatically impact how operators generate revenues over the next 10-15 years. Transformations are taking place that will move activities, entertainment, commerce, healthcare, transportation, and most other aspects of our lives into Digital modalities. This has invited thousands of micro-providers of applications and networks into the mix, quickly marginalizing the value of the operator to merely an “enabling pipe.” This puts the operator into a competitive situation, ultimately impacting margins. But that’s only on the revenue side of the equation… the story could become far more complex.

For an operator, the days of 25%-40% EBIDTA are waning, if not almost gone (in many regions). Pressures on pricing remain downward, with new product offers being the primary method to sustain acceptable revenues and margins. This has opened the door for some impressive creativity by many operators, especially in developing markets. In many cases no market appears off limits, as seen by the offerings by progressive organizations like MTN in Africa: Who would have anticipated an operator would offer personal transportation services rivaling Uber?

These seemingly odd moves are, in fact, brilliant moves by operators to seek new sources of revenues as their businesses are being redefined by the digital services we are quickly becoming reliant on. The impacts on revenue models due to this change in the business are stunning: Traditional billed services like voice, and even data, are fading in importance. Revenue models are instead focusing more on casual services, pay-per-use services, marketplace services, etc. Put more simply, the “pipe” is no longer where the earning potential lies for the operator.

So now a previously non-agile, large operator business is finding itself competing with, and in many cases partnering with, literally thousands of aggressive, hungry micro-entities that provide products and services accessed by the networks. There is less reliance on monthly guaranteed revenue; the battle for revenue very often resides in millions of micro-transactions.

All of the discussion cannot focus entirely on revenues, however. Margins are also sustained by costs. Agility, therefore, must exist on the cost side of the operator business. In the old world of monthly recurring and predictable revenues, costs could be managed and allocated more confidently. Opex and Capex planning and forecasting practices were based on budgeting with a high degree of certainty. But as revenues models are changing, so must cost models. Where possible, operators will need to employ similar creativity to curbing costs, as they are with earning revenues.

How can operators, therefore, modify cost models in the business to be as aggressive and variable as the revenue models they rely upon? This is where the opportunities for SDN/NFV networks can shave significant costs, while changing operator cost models in ways that were not previously achievable.

Software-Defined Networks (SDN) and Network Function Virtualization (NFV) will allow operators to provide Network-on-Demand and Service-on-Demand models to consumers, while effectively minimizing, if not eliminating the need for human intervention. The costs associated with truck rolls, call centers, and expensive specialized network equipment will be dramatically reduced, resulting in decreased Opex and Capex burdens on the business. The savings need to expand further, however.

In current cost models, operators must deploy and maintain network services around the clock, which consumes significant and ongoing expenses. However, if a network is based on SDN/NFV architectures, the deployed services are no longer in a fixed position in the network, simply because they are now software-defined and/or virtualized. This means an intelligent network can move assets where needed, and when needed. These assets are capitalized as licensed instances; so now an operator can have a pool of 1,000 licenses for a virtual service, and deploy them only as necessary.

This type of dynamic deployment model should allow operators to negotiate dynamic cost models as well; imagine only paying for a license when you have it deployed (and it is generating revenue). While this idea may seem far-fetched, consider that now the network functions we are discussing are no longer controlled by a few network equipment and function providers; micro-entities (application developers) can now produce those functions, often at far less expensive price points.

The business transformations taking place in operators globally are forcing entirely new ways of addressing margin pressures, as the revenue and cost variables operators have historically used are no longer the same. Looking beyond margins in consumer-facing products and services, new network cost models must be explored, especially since those models were based on what is now an outdated means to earn revenues.

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.

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