Business Intelligence for Telcos or Intelligent BSS and OSS?

Transcription

1 Event Summary Business Intelligence for Telcos or Intelligent BSS and OSS? Abstract: Most telcos possess large amounts of data, but don't use it to reduce costs and drive profitability. A TeleStrategies event showed tools and strategies that could address these issues. By Norbert Scholz Strategic Business Imperatives Business intelligence (BI) vendors might want to consider demonstrating that they have the business support system (BSS) and operations support system (OSS) expertise to address the specific concerns of telecommunications providers. BSS and OSS vendors need to provide BI tools that use data from their own solutions, as well as from third-party solutions. Carriers should develop strategies to take advantage of the large amounts of data resident in their BSSs and OSSs to reduce costs and improve profitability. Publication Date:5 June 2003

2 2 Business Intelligence for Telcos or Intelligent BSS and OSS? Event Summary On 30 April and 1 May 2003, TeleStrategies hosted its first conference on "Leveraging Business Intelligence and Analytics for Increased Profitability, ROI and ARPU" in Crystal City, VA. The 110 registered attendees had the opportunity to attend 11 sessions detailing the uses of BI for telecommunications providers and consult with seven vendors that exhibited their solutions. What Exactly Is BI for Telcos? There was little consensus on what constitutes BI for telcos. Although all participants agreed that BI has to do with "slicing and dicing" information to drive efficiency and profitability, for independent software vendors (ISVs), BI is software that accesses, manages and analyzes data; for systems integrators (SIs), it is a business process; and, for hardware vendors, it is an intelligent box. For telco end users, BI is all of the above, often focusing on specific point solutions, as reflected in the following sessions: Customer profitability analysis Deloitte Consulting Churn management Verizon Wireless Receivables management SBC and American Management Systems (AMS) Workforce productivity measurement Verizon and Business Objects Executive dashboards Greenwich Technology Partners Strategic sourcing Informatica Risk management Fair Issac Total cost of ownership (TCO) reduction Ernst & Young Real-time traffic engineering Zvolve Systems Exhibitors were similarly diverse, including services companies (such as AMS and XiT), ISVs (Business Objects, CSG Systems, OmniChoice Solutions and Teradata) and hardware vendors (Netezza). Event Analysis BI is, of course, nothing new for telecommunications providers. Telcos have always used data-mining techniques to analyze data resident in individual solutions silos to drive efficiency. However, two recurring themes of the conference indicate that there is a subtle shift going on in the way telcos intend to reap the advantages of BI Gartner, Inc. and/or its Affiliates. All Rights Reserved. 5 June 2003

3 Focus on customer-related data Most presentations addressed customer-related issues, such as churn management, risk management and customer profitability analysis. The strong interest in using BI to improve revenue and profit per customer reflects the fact that carriers are finally beginning to realize they no longer "own the customer," as they did in the past, but have to take measures to earn their customers' business. Enterprisewide data correlation and executive dashboards Now that most telcos have finished, or at least put on hold, further acquisitions, they are thinking about correlating data from a large number of back- and front-office systems they have inherited, including the correlation of network-driven and CRM-related data. Executive dashboards that reduce data clutter and provide real-time graphic analysis tailored for the specific needs of individual departments (such as operations, engineering or sales) promise to enhance efficiency and competitiveness. Cross-industry BI vendors dominated the event. The traditional BSS and OSS vendors were conspicuously absent, with the exception of AMS and CSG Systems. As a result, there was little discussion of the uses of BI on the CDR and network data level. 3 Gartner Dataquest Perspective Drivers Telcos have no shortage of customer and network data. Numerous speakers mentioned that, compared with other industries, such as finance, airlines or retailers, most telcos have yet to figure out how to use this plethora of data scattered across their organizations. To complicate matters, the rollout of content services is likely to increase the amount of available data, requiring even more sophisticated BI tools. TheconferenceraisedawarenessofthebenefitsBIofferstotelcosand demonstrated that carriers will be able to leverage the BI experience of more-mature industries from a customer-facing angle and then combine these insights with the network-related aspects unique to telcos. Inhibitors Attendees received little guidance as to which permutations of BI might yield the greatest short- and medium-term return. BI has already proliferated into nearly every back- and front-office solution, including churn management, predictive marketing, customer profiling and segmentation, credit risk management, margin management, forecasting and budgeting, and product development and management Gartner, Inc. and/or its Affiliates. All Rights Reserved. 5 June 2003

4 4 Business Intelligence for Telcos or Intelligent BSS and OSS? A generic Gartner definition of BI exemplifies the ubiquity of BI. According to this definition, "BI is a user-centered process that includes accessing and exploring information, analyzing this information, and developing insights and understanding, which leads to improved and informed decision making. This involves an iterative process of accessing data (ideally stored in the data warehouse, data mart, or operational data store, but not necessarily) and analyzing it thereby deriving insights, drawing conclusions and communicating findings to effect change positively within the enterprise. BI usage crosses the spectrum of users throughout the enterprise and includes rank-and-file workers, executives, analysts, and knowledge workers. Although users of an enterprise's BI data have traditionally been inside the enterprise, with the explosion of the Web for conducting business; i.e., e-business, an enterprise's BI users can be external to the enterprise, as well, and are called 'extranet' users." (For details, see "Business Intelligence Tools: Perspective," DPRO ) Conference attendees were upbeat about the potential of BI technology for telcos, and, consequently, paid little attention to possible inhibitors to its adoption, such as the quality of data feeding BI tools, or privacy issues restricting the use of information gathered about customer behavior. In other words, telcos might install the best BI technology and still be limited in their ability to analyze and use their data. Outlook If developments in the overall BI market are any indication, BI could become one of the few growth areas for telecommunications solutions vendors. According to a recent Gartner Dataquest forecast, the global BI software market is predicted to grow at an average annual rate of 8.5 percent, from $1.7 billion in 2001 to $2.5 billion by 2006 (see "Business Intelligence, Worldwide: ," SWSF-EU-MT-0107). It is likely that many vendors will seek to capitalize on the growth potential of BI and assist telcos in catching up with more-mature industries. The effusive nature of BI, combined with its tangible benefits, could lead to the following developments in the next 12 to 18 months: Just another marketing slogan Similar to revenue assurance, BI could degenerate into yet another marketing slogan, devoid of meaningful content. Any vendor that provides minimal analytic capabilities could claim to offer BI capabilities. Adoption by traditional BSS and OSS vendors There is no reason why BSS and OSS ISVs and SIs should not offer powerful BI tools, since they already control large amounts of data. It is not inconceivable that such vendors will add BI tools to their repositories, through acquisitions or in-house developments. They could provide "intelligent BSS and OSS" that analyzes internal and third-party data Gartner, Inc. and/or its Affiliates. All Rights Reserved. 5 June 2003

5 Development of telco-specific BI tools True BI draws on data from across multiple front- and back-office silos. This includes customer- as well as network-driven data. The leading cross-industry BI vendors are likely to deepen their telco-specific network expertise and leverage their established installations with leading communications providers. Gartner Dataquest Recommendations Gartner Dataquest recommends that vendors and telcos take the following actions: BI vendors might want to consider demonstrating that they have the BSS and OSS expertise to address the specific concerns of telecom providers. BSS and OSS vendors need to provide BI tools that use data from their own solutions, as well as from third-party solutions. Carriers should develop strategies to take advantage of the large amounts of data resident in their BSSs and OSSs to reduce costs and drive profitability. Key Issue How will operations support systems facilitate the optimization of a public network infrastructure? Gartner, Inc. and/or its Affiliates. All Rights Reserved. 5 June 2003

6 6 Business Intelligence for Telcos or Intelligent BSS and OSS? This document has been published to the following Marketplace codes: TELC-WW-DP-0544 For More Information... In North America and Latin America: In Europe, the Middle East and Africa: In Asia/Pacific: In Japan: Worldwide via gartner.com: Entire contents 2003 Gartner, Inc. and/or its affiliates. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice