Business Intelligence For Telcos

Globally, communications service providers are investing billions to deliver converged services. This requires massive investments in new infrastructure and next-generation service architectures, and gaining a return on these investments is getting extremely difficult.

Being first deploy these higher-speed networks and converged services only generates short-term competitive advantages. New services must be launched on industry-standard architectures, that all competitors can also adopt.

Telecommunications service providers [Telcos] are facing a plethora of challenges:

• Fierce, highly marginalised competition
• Continually changing regulations
• Changing business boundaries to incorporate convergencey models
• Customer demand for more complex services, requiring higher speed networks
• Rapidly advancing technologies

Competitive advantage can only be achieved through the ability to consistently attract and retain profitable customers.

Building customer profiles and using these to configure products, offers and make smarter decisions at every customer touch point is the only way to minimize churn while maximizing profits. Its about making the right offers, at the right time, through the right channel.

Addressing customer satisfaction, retention and profitability is not a one-time activity, nor is it the responsibility of a single department. It is a cross-functional discipline with ever evolving parameters, hence Telcos must continually seek to know more about their customers, and adapt to meet their needs.

With commoditisation of carriers services , Telcos are challenged to retain customers on a profitably basis. This highlights several key areas in telecommunications that will benefit significantly from Business Intelligence [BI] solutions:

• Network - Inventory Management, Network Performance
• Revenue Assurance - CDR integrity, Mediation Processes, Billing, Collections, Debt Management, Interconnect and Roaming
• Profitability - Marketing Campaign Management, Supply Chain Management, Demand Planning, Product Lifecycle Planning, Portfolio Management, Asset Management and Service & Product Pricing
• Customer Management- Customer Service, Self Provisioning, Customer Lifecylce Value Management, Customer Profitability

BI Vendors each have frameworks they use to work through the current business challenges and opportunites with businesses, to identify areas where BI can add the most value. For instance, Teradata uses Business Impact Models [BIM’s] to help customers recognise the value of investing in BI solutions.

Using Business Impact Model [BIM’s]

BIMs are calculated projections used to quantify the value of the BI solution. Using specific performance measures and metrics, they provide a business with an accurate, timely assessment of the potential return on investment (ROI)

By applying the solution to current practices, a Quick Assessment BIM report can provide an expected ROI that focuses on the projected economic value of the CRM solution.

Using a standards set of questions and applying the answers to analytical modelling, a customer can better evaluate a solution and compare solutions on an even platform.

For instance, Teradata offers Telcos four distinct BIMs:

1. Customer Acquisition
2. Growth - Crosss Sell/Up Sell
3. Customer Retention
4. CRM - Relationship Management

Customer Acquisition BIM

The Customer Acquisition BIM identifies the business value of enhancing the effectiveness of marketing campaigns used for customer prospecting, acquisition, and growth. The potential for improved profitability will arise from:

• Increasing conversion on acquisition campaigns
• Reducing the new customer acquisition cost
• Target campaigns to target and acquire higher value customers

Customer Growth BIM

The Customer Growth BIM focuses on improving revenue from the existing customer base, by:

• Improving up-sell and cross-sell campaigns profitability
• Increasing conversion on up-sell and cross-sell campaigns
• Increasing revenue and profitability from current customers

Customer Retention BIM

The Customer Retention BIM helps identify and target existing high-value customers who have a higher propensity to churn. Investment in retaining customers rather than acquiring new customers drives increased profitability by:

• Improving the save rates of retention campaigns
• Protecting the existing revenue stream
  

CRM Solution BIM

Applying BIMs to the Telco industry would typically look at both Marketing and Customer Management to define the value proposition of a CRM Solution, for instance it would help define the value of being able to:

Marketing

• Define marketing campaign goals, using a clearly-defined break-even date for your return on investment
• Strengthen business strategies
• Integrate with other specific applications
• Improve ROI of marketing budget

Customer Management

• Acquire new customers
• Reduce churn rate
• Grow your revenue stream from current customer base
• Calculate customer group profitability
• Tailor specific offers to specific customer groups on the fly during Support calls
• Track customer lifetime value

The key to achieving all three goals is to accurately target customers with the right offers at the right time—and through the right channel.

By implementing a CRM solution, a business is better equiped to determine the true value of a service proposition for each customer group, forecast quantifiable returns on new services, and also determine the ROI on the CRM technology investment.

More on Customer Relationship Management Solutions [CRM]

Next: Data Warehouses For Telcos

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