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Telcos warned – ignore big data at your peril
Firms in the telecommunications have a great opportunity to use big data to improve their customer service and profitability, but many companies in this sector are still failing to realize the benefits that are available to them.
This is according to market research firm Ovum, which warned that organizations that ignore the potential of big data analytics “do so at their peril”. A new study by the group examined how this industry can benefit from information and found there are several activities that can be improved through better use of analytics tools.
For instance, insight from big data can be used to promote customer loyalty and cut churn, predict demand and allow businesses to better target their upselling and cross-promotional activities.
Clare McCarthy, head of Ovum’s Telco Operations practice, observed: “The proliferation of smart devices and services has led to a considerable increase in the number of customer–telco interactions.” She added: “As a result, mining a greater volume and variety of data – and doing so in real-time – is becoming a powerful competitive advantage for telcos.”
However, in order to make the most of this, firms will need to have flexible business structures and logical processes for managing the data, not siloed solutions where artificial constraints such as internal politics prevent employees getting a full view of data from across the organization.
A key stumbling block to the adoption of big data analytics within telcos is the way these firms are traditionally structured, with rigid processes for both personnel and information. Therefore, in order to succeed, companies will need to become more data-centric, with lessons to be learned from more agile data analytics models being pursued by other industries.
Ms McCarthy said: “Transforming ingrained operating models and business processes is a difficult task for telcos and many are not entirely sure what they are transforming towards.”
The research revealed that another key challenge is that telcos lack the necessary management in-house to turn their information into useful insights. “As data scientists are in high demand and short supply, this area is ripe for vendor support, either with pre-integrated solutions or hosted services,” the firm noted.
Telcos are currently turning to one of four sources for their big data needs – existing OSS/BSS providers, trusted IT vendors, telco analytics specialists, or incumbent network equipment providers. All of these offer different competences and strengths as they compete for a slice of the growing big data market, which Ovum said will be worth $7.7 billion by 2018
Ms McCarthy said this is why one of the most important strategic decisions telco organizations face in the next week will be selecting a business intelligence and analytics provider that understands their needs and can help them make these operations as smooth as possible.
Only once these issues have been resolved will these businesses be able to reap the benefits of big data, Ovum stated. However, once they have a firm handle on their process, they will be able to monetize the customer and business data they collect as part of their everyday activities and grow the company.