Drilling for Digital Gold

Transcription

1 Drilling for Digital Gold Thomas Krüger May 2017

2 Agenda Introduction Big Data & Analytics maturing but no silver bullet identified Strategic decisions needed Conclusion WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 1

3 Telcos under pressure for many years seeking for new revenue streams to compensate for loss Telco industry challenge Revenue loss Fierce competition Cost pressure? Topic analyzed in Telco Benchmarking IT (TeBIT) 2016 together with the ETIS organization Note: TeBIT 2016 benchmark figures: revenue decline by ~2% on average; IT spending increased by ~5% across all participants Source: TeBIT 2016 Benchmark WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 3

4 If Telcos became relevant, Big Data & Analysis business would contribute well to top line GfK WPP nielsen 6% to 10% of (incumbent) Telco revenues KANTAR Ipsos TNS infratest Source: Annual reports; press releases; BCG analysis WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 4

5 Big Data & Analytics KPIs and facts show room for improvement in Telcos 89% of Telcos have established privacy policies 71% with guiding principles for how to use customer data of Telcos with centralized D&A leadership & responsibility few have dedicated data governance bodies 57% of potential data attributes collected by TeBIT participants (min. 23% vs. max. 88%) BIG DATA AND ANALYTICS of analytics on highest maturity levels Level 4 market segmentation Level 5 geo/social analytics (67% on basic levels 1-3) 33% KPIs AND FACTS 3.3 < 0.5 share of total revenue generated by Big Data & Analytics initiatives 33% average D&A practice maturity between levels 1 to 5 (min 2.0 vs. max. 4.0) (average 0.21 ) Telcos have just started to develop and monetize Big Data and Analytics no silver bullet observed Note: D&A = (Big) Data & Analytics Source: TeBIT 2016; BCG analysis WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 6

6 Big Data & Analytics on Telcos agenda and maturing, but no silver bullet identified, yet 1 Data collection Telcos collect & store significant amounts of data esp. personal, location, usage data room for improvement in social environment, financial data, online behavior & interests 2 Capability maturity Capabilities are maturing (experience and move towards monetization of initiatives) tailored development processes, clear D&A ownership are still lacking 3 4 Analytics maturity Investments >30% of analytics are already highly sophisticated and enable Telcos to build different types of new revenue streams (especially selling analytical insights to third parties) Telcos invest in Big Data & Analytics initiatives (one-time costs mostly for investments into tools & infrastructure; yearly costs for D&A skills and capabilities largely varying) 5 Benefits Big Data & Analytics revenues come from various sources (esp. selling insights to 3rd parties) but do not yet cover running costs and are lower than 0.05% of total revenues 6 Privacy & security Most operators have defined explicit data usage guidelines, over half engage in proactive security monitoring and testing and some have dedicated data governance bodies Note: D&A = (Big) Data & Analytics Source: TeBIT 2016; BCG analysis WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 7

7 1 Some types of data are not widely collected WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 8

8 2 Big Data & Analytics capabilities are maturing as participants are moving towards monetization of initiatives What level best describes your practices related to monetization of data or analytical insights? What level best describes your practices related to tracking and value realization of D&A initiatives? What level best describes your current practices related to data usage governance / oversight? Min Max. What level best describes your data security practices? What level best describes the current coordination between business and analytics teams? What level best describes your current use of data repositories for analytics? Maturity level (lowest: 1, highest: 5) Note: D&A = (Big) Data & Analytics Source: TeBIT 2016; BCG analysis WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 9

9 3 Telcos already deploy highly sophisticated analytics WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 10

10 4 5 Telcos are trying out different approaches to monetizing Big Data and analytics WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 11

11 6 Participants take privacy and data security very seriously Has your company established a privacy policy that explains how you collect, manage, and use customer data? Has your company established a set of guiding principles for how to use customer data which are separate and distinct from the privacy policy? Yes No In % of provided answers Which function in your company is responsible for ensuring compliance with its privacy rules? IT Legal Privacy Security In % of provided answers What level best describes your data security practices? Min. 3.9 Max Maturity level (lowest: 1, highest: 5) Source: TeBIT 2016; BCG analysis WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 12

12 Several strategic decisions need to be taken on how to leverage Big Data & Analytics Indirect (e.g. improved customer experience) Revenue model Direct (e.g. new business models) Partnering Go-to-market Direct go-to-market Main brand Branding Separate brand Data unit in Finance Organization Separate data unit Source: BCG analysis WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 14

13 Backup Data governance based on two key pillars spanning across three dimensions strategic, tactical and operational Organizational Structure Roles & Responsibilities Data governance needs to be reflected in organizational structure across different levels Data governance spans across whole organization including business units, corporate, IT etc. Clear roles & responsibilities need to be defined to be involved in data governance Number of roles involved in data governance needs to be designed to target Strategic level Tactical level Operational level Source: BCG analysis; cliparts by presentermedia.com WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 15

14 Backup Copyright 2017 by The Boston Consulting Group, Inc. All rights reserved. Data governance/organization model can be set up in different ways Roles Mixed / traditional Businesscentric Datacentric Analytics Use data to create reports Data Makes decision on local vs. global data ("master data") Technical role, manages data types & structures Business Analytics IT Data Business Analytics IT Data Business Analytics IT Data Comment Common model often driven via finance reporting Used in case stable solution for data management in place Data, solution, structure & analytics close together for agility Source: BCG analysis WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 16

15 Telcos see potential in Big Data & Analytics but also see the challenges one of them is lack of Commercial of the Shelf Marijo Volarevic (HT) Charlotte Hersdorf, Jan Ullerup (TDC) Miguel Angel Riez Rincon (Telefonica) "It is very tough to make a detailed business case for a big data project [ ] the market is transforming dramatically and it requires a leap of faith. Telcos are not always willing to take that leap." "We are indeed exploring big data and have launched a number of initiatives and pilots. Much of the focus in on providing a better customer experience." "Telcos need to make some noise in the market, to get the word out that we have unique and valuable data." "Telcos are rarely capable of doing the required R&D in advanced analytics. So we need partners." Source: TeBIT 2016; cliparts by presentermedia.com WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 18

16 Big Data & Analytics 'gold mine' identified but no broader drilling, yet (Big) Data & (Advanced) Analytics offer potential for telco operators directly (business models) and indirectly (enablement & improvement) Telco operators have invested into BD&A, but have/can not yet monetize the "gold mine" / opportunity To monetize the opportunity several strategic decision have to be taken, esp. around got-to-market and strategic positioning Telco's need to create a clear vision, on how to monetize data, prepare "the rig" for that specific target and "start drilling" Source: TeBIT 2016; BCG analysis WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 19

17 TeBIT Executive Reports available on bcg.perspectives telecommunications-technology-digital-tebit-2016-executive-report-drilling-digital-gold/ WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 20

18 Appendix WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 21

19 "Drilling for Digital Gold" report developed jointly by The Boston Consulting Group and ETIS The Boston Consulting Group (BCG) is a global management consulting firm and the world s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com. ETIS is the trusted community for telecom professionals. Our goal is to enable our members to reach their strategic objectives and to improve their business performance by sharing knowledge on industry challenges and by collaborating where possible. For more information, please visit WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 22

20 Assessment conducted along three major dimensions Benefits / revenues Analyses Big data capabilities & maturity Volumes Data Capabilitie s Spending / investments Source: TeBIT 2016 WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 23

21 TeBIT 2016 continues a series of Telco IT executive reports ource/resmgr/docs/tebi t_2012-4oct12-finalonli.pdf ource/resmgr/docs/tebi t_2013-oct13-finalonlin.pdf ctives.com/content/arti cles/technology_strate gy_telecommunication s_tebit_2014_paving_ paths_new_revenue/ ctives.com/content/arti cles/digital-economytelecommunicationstebit-2015-executivereport-digital-delivers/ For further details, please contact the authors WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 24

22 Thank you bcg.com bcgperspectives.com