Drilling for Digital Gold...Big Data & Analytics 'gold mine' identified but no broader drilling, yet...
Transcript of Drilling for Digital Gold...Big Data & Analytics 'gold mine' identified but no broader drilling, yet...
Drilling for Digital Gold
Thomas Krüger
May 2017
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Agenda
Introduction
Big Data & Analytics maturing – but no silver bullet identified
Strategic decisions needed
Conclusion
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Telcos under pressure for many years – seeking for new revenue streams to compensate for loss
Telco industry challenge
Revenue loss
Cost pressure
Fierce competition
?
Note: TeBIT 2016 benchmark figures: revenue decline by ~2% on average; IT spending increased by ~5% across all participantsSource: TeBIT 2016 Benchmark
Topic analyzed in Telco Benchmarking IT (TeBIT) 2016 together with the ETIS organization
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nielsen
Ipsos TNS infratest
KANTAR
GfK WPP
If Telcos became relevant, Big Data & Analysis business would contribute well to top line
6% to 10%of (incumbent)
Telco revenues
Source: Annual reports; press releases; BCG analysis
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Big Data & Analytics KPIs and facts show room for improvement in Telcos
of analytics on highest
maturity levels
Level 4 – market segmentation
Level 5 – geo/social analytics
(67% on basic levels 1-3)
of potential data attributes
collected by TeBIT participants
(min. 23% vs. max. 88%)
average D&A
practice maturity
between levels 1 to 5
(min 2.0 vs. max. 4.0)
of Telcos with centralized
D&A leadership &
responsibility
few have dedicated data
governance bodies
of Telcos have established
privacy policies
71% with guiding principles
for how to use customer data
89%
33% 3.3BIG DATA AND ANALYTICS
KPIs AND FACTS
57%
Telcos have just started to develop and monetize Big Data and Analytics – no silver bullet observed
share of total revenue
generated by Big Data &
Analytics initiatives
(average 0.21‰)
33%
< 0.5‰
Note: D&A = (Big) Data & AnalyticsSource: TeBIT 2016; BCG analysis
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d.Analytics
maturity
Big Data & Analytics on Telcos agenda and maturing, but no silver bullet identified, yet
Data collection
Capability
maturity
Investments
Benefits
Privacy &
security
Telcos collect & store significant amounts of data – esp. personal, location, usage data –
room for improvement in social environment, financial data, online behavior & interests
Capabilities are maturing (experience and move towards monetization of initiatives) –
tailored development processes, clear D&A ownership are still lacking
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)
>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)
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
Most operators have defined explicit data usage guidelines, over half engage in proactive
security monitoring and testing and some have dedicated data governance bodies
1
2
3
4
5
6
Note: D&A = (Big) Data & AnalyticsSource: TeBIT 2016; BCG analysis
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Some types of data are not widely collected
1
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Big Data & Analytics capabilities are maturing as participants are moving towards monetization of initiatives
2
54321
Maturity level (lowest: 1, highest: 5)
What level best describes your current
use of data repositories for analytics?
What level best describes the current
coordination between business and analytics teams?
What level best describes your data security practices?
What level best describes your current practices related to
data usage governance / oversight?
What level best describes your practices related to
tracking and value realization of D&A initiatives?
What level best describes your practices related to
monetization of data or analytical insights?
Min. Max.
3.7
3.1
3.1
3.9
2.9
3.1
Note: D&A = (Big) Data & AnalyticsSource: TeBIT 2016; BCG analysis
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Telcos already deploy highly sophisticated analytics
3
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Telcos are trying out different approaches to monetizing Big Data and analytics
5
4
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Participants take privacy and data security very seriously
100806040200
In % of provided answers
Has your company established a set of guiding principles
for how to use customer data which are separate and
distinct from the privacy policy?
71.4 28.6
Has your company established a privacy policy that ex-
plains how you collect, manage, and use customer data?88.9 11.1
NoYes
Which function in your company is responsible for
ensuring compliance with its privacy rules?11 67 11 11
0 20 40 60 80 100
In % of provided answersSecurity
Privacy
Legal
IT
54321
Maturity level (lowest: 1, highest: 5)
What level best describes your data security practices?
Min. Max. 3.9
6
Source: TeBIT 2016; BCG analysis
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Several strategic decisions need to be taken on how to leverage Big Data & Analytics
Direct go-to-market
Main brand
Indirect (e.g. improved customer experience)
Data unit in Finance
Partnering
Separate brand
Direct (e.g. new business models)
Separate data unit
Revenue model
Go-to-market
Branding
Organization
Source: BCG analysis
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Data governance based on two key pillars spanning across three dimensions—strategic, tactical and operational
Organizational Structure
• Data governance needs to be reflected in
organizational structure across different
levels
• Data governance spans across whole
organization including business units,
corporate, IT etc.
Roles & Responsibilities
• 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
Backup
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Data governance/organization model can be set up in different ways
Mixed /
traditional
Business-
centric
Data-
centric
CommentCommon model often driven
via finance reporting
Business IT
Analytics Data
Used in case stable solution
for data management in place
Business IT
Analytics Data
Data, solution, structure & ana-
lytics close together for agility
Business IT
Analytics Data
Roles
Analytics
• Use data to create
reports
Data
• Makes decision on
local vs. global data
("master data")
• Technical role,
manages data types
& structures
Backup
Source: BCG analysis
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Telcos see potential in Big Data & Analytics but also see the challenges – one of them is lack of Commercial of the Shelf
"It is very tough to make a detailed business case for a big data pro-ject […] 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."
Marijo Volarevic (HT)
Charlotte Hersdorf,
Jan Ullerup (TDC)Miguel Angel Riez
Rincon (Telefonica)
Source: TeBIT 2016; cliparts by presentermedia.com
"Telcos are rarely capable of doing the required R&D in advanced analytics. So we need partners."
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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
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TeBIT Executive Reports available on bcg.perspectives
https://www.bcgperspectives.com/content/articles/
telecommunications-technology-digital-tebit-2016-executive-report-drilling-digital-gold/
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Appendix
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"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 professio-
nals. Our goal is to enable our members to reach
their strategic objectives and to improve their busi-
ness performance by sharing knowledge on industry
challenges and by collaborating where possible.
For more information, please visit www.etis.org.
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Assessment conducted along three major dimensions
Big data
capabilities & maturity
Data
Volumes
Analyses
Capabilitie
s
Spending /
investments
Benefits /
revenues
Source: TeBIT 2016
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TeBIT 2016 continues a series of Telco IT executive reports
2011 2012 2013 2014 2015
For further details, please contact the authors
https://www.bcgperspe
ctives.com/content/arti
cles/technology_strate
gy_telecommunication
s_tebit_2014_paving_
paths_new_revenue/
https://www.bcgperspe
ctives.com/content/arti
cles/digital-economy-
telecommunications-
tebit-2015-executive-
report-digital-delivers/
http://www.etis.org/res
ource/resmgr/docs/tebi
t_2013-oct13-final-
onlin.pdf
http://www.etis.org/res
ource/resmgr/docs/tebi
t_2012-4oct12-final-
onli.pdf
Thank you
bcg.com | bcgperspectives.com