Unlocking the Value in Telecom Data (BI)
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Transcript of Unlocking the Value in Telecom Data (BI)
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Unlocking the value intelecommunications data
A Detica white paper
© Detica 2010
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Unlocking the value in
telecommunications data
2 Unlocking the value in telecommunications data
Executive summary
In today’s increasingly competitive
and cash-constrained operating
environment, telecommunications
companies are seeking to extract
maximum business value from the
data they collect. To address thesechallenges they are turning to data
warehouses which offer tried and
tested technology and familiar
processes. However, more and
more of the business insights are
locked up in human data, which has
traditionally sat outside the data
warehouse. By identifying these
new data sources and implementing
new approaches for processing them,
telecommunications companies can
make the efciency savings theyneed, increase cross-selling and
improve customer experience – and
ultimately make an impact on their
bottom line.
A missed opportunity
In an increasingly competitive, regulated
and nancially-constrained market,
the future for telecommunications
companies – telcos – looks challenging.
The price they are able to charge for
‘business-as-usual’ voice trafc has
declined by 10-15% per annum over the
last decade, and European legislation
is continuing to drive down roaming
charges and termination rates. The ‘data
explosion’ has driven up network costs
yet revenues from consumer data services
have failed to ll the gap because ‘over-
the-top’ service providers are invading
markets traditionally dominated by
large telcos. To add to their woes, the
current economic crisis is also reducing
discretionary spend on communications.
These challenges are increasing the
pressure on telcos to deliver new revenue
streams while simultaneously improving
operational efciency, and identifying
revenue leakage from fraud and bad
debts. In their attempts to achieve this
difcult balance, operators are turning
to data warehouses – monolithic stores
of structured data collected from across
the enterprise – to gain operational and
customer insight.
However, telcos are failing to unlock the
full value in their data. More and more
of the data they are able to collect or
access is unstructured – such as customer
service complaints or emails – or does
not t the ordered model needed by
most data warehouses. This data is
often ignored because, although it might
provide valuable business intelligence,
it is too difcult to analyse or simply
not perceived as being important. For
example, on the operational side,this data typically records hundreds
of millions of detailed transactions
each day – for instance, call records or
network events – and therefore generates
vast data volumes which can only be
stored for short periods before being
overwritten. Low-level transactional data
often requires extensive manipulation
and transformation before it is in a
t state to be analysed and exploited
effectively. This pre-processing requires
extensive data-processing infrastructure
and specialised skills, both of which
many operators lack. To make matters
worse, much of this data is stored in
core operational systems where large-
scale extraction of data is neither
easy nor common practice, and some
information systems departments have
been traditionally resistant to scheduling
large data extraction tasks which may
potentially interfere with mission-critical
production.
Moreover, the timescales for datawarehouse development cannot keep
pace with the constantly evolving needs
of the business. Many end users do not
have predictable data needs – they may
need one type of report for a number of
months and then unexpectedly require
new information because the business
environment or internal priorities have
changed. For example, understanding
data usage and its impact on the
customer experience has recently become
a key issue for both xed-line and mobile
Internet Service Providers (ISPs). In
spite of this, most operators have not
contemplated the inclusion of detailed
network usage data into their customer
data warehouses, which will signicantly
limit their ability to understand the
link between usage, experience and
protability.
In the end, the data warehouse is
undermined by a lack of trust by
users and the inevitable sproutingof spreadsheet-based ‘skunkworks’ –
unofcial approaches to handling data
– around the business. Gartner estimates
that despite data warehouses achieving
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3
a 50% adoption rate among end users, data exploitation efforts
have struggled to move beyond basic reporting and customer-
targeting activities. Thus, while data warehouses have proven
useful for some core operational reporting and relatively stable
insight requirements, in the long term telcos will need to adopt
new approaches to data exploitation if they are to generate
the insights needed to achieve operational efciency and
competitive advantage in a progressively challenging commercial
environment.
Where is the data?
Telcos are generating a huge data footprint outside the
traditional data warehouse. Areas such as customer behaviour
and internal business performance generate vast volumes of data
on a daily basis, capturing in-depth information on customerneeds and preferences, as well as detail on internal process
failures, capacity bottlenecks and enterprise risk.
Unstructured data
Emails and text-based documentation, as well as plain-text
comment elds in structured databases, have historically not
been included in the data warehouse and also contain vast
amounts of valuable data.
For example, many business-to-business telcos store their
contract documents in MS-SharePoint™, which cannot be
searched using traditional data warehouse techniques, thuspotentially exposing them to huge losses or unbilled revenue
– because contractual terms may not be being enforced.
Furthermore, some telcos may also nd themselves delivering
Service Level Agreements (SLAs) which are far more onerous
than those enshrined in their contractual documentation, or not
charging for certain services – because they are unable to easily
retrieve the data.
Email – with appropriate treatment to comply with the Data
Protection Act (see Detica’s white paper ‘Data protection
compliance: x your roof while the sun is shining’) – also
contains valuable information about process performance acrossan organisation. Understanding how work actually gets done,
by referring to communications between employees, can unlock
efciency savings.
Network perormance data
Network development is the largest capital expenditure item
for telecoms operators. Network operations centres are also a
signicant operational expenditure item. Operators generate
and store many gigabytes of event and fault data every day from
both their external telecoms and internal corporate networks.
The data from these various network layers (service, network andtransmission) are rarely brought together but would, if properly
correlated, provide a consolidated view of network performance,
delivering a rich source of insights into the root causes of alarms,
network performance issues and other key network events.
Network trafc data
Online connection speeds and reliability are critical drivers of
overall customer experience and satisfaction. Both xed-line
and mobile ISPs are able to capture data on the type of datapassing over their networks (such as, HTML, P2P, VoIP, streaming
etc.), and therefore identify both the type of trafc, the level of
bandwidth usage and type of user whose online activity causes a
disproportionate impact on the experience of other subscribers.
This type of information is important for pursuing an intelligence-
led approach to trafc management and network investment.
Call (and other) data records (CDRs/xDRs)
With the exception of Call Data Records (CDRs) captured and
retained for law-enforcement purposes, only a minority of
operators ingest CDRs into their data warehouse. The majorityeither outsource CDR retention or store CDRs in a digital archive,
with no easy access possible by the business. Telecoms operators
need to increase their analysis of CDRs and other data records
(xDRs) to understand detailed calling patterns, which can provide
rich customer behavioural insights valuable for enhancing
customer experience.
Web logs and call centre records
Call centre records and web logs contain a signicant proportion
of free text, which cannot be easily warehoused or analysed by
mainstream statistical techniques. While most operators usetrafc analysis tools to analyse trafc on their websites, this is
usually conducted at a site or page level rather than from the
perspective of a customer journey. To make efciency savings,
telecoms operators need to move customers away from labour-
intensive manned channels to automated processing. Driving a
successful channel migration strategy means building a better
understanding of the customer’s experience by automating
analysis of the free text obtained from contact forms on the
operator’s website and combining it with transcripts from calls
made to call centres.
Techniques for unlocking value
With the immense computing power available today, new
techniques have emerged which can handle the huge quantities of,
and generate value from, ‘human’ data – data that is disorganised,
unstructured, disparate and compromised by errors and
inconsistencies. Data which has previously been ignored by the
data-warehouse builders becomes capable of delivering valuable
insights.
Advanced network analytics
By analysing the relationships between disparate and seeminglyunconnected data from across the organisation, new insights are
revealed which could not be derived by looking at the individual
data in isolation.
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4 Unlocking the value in telecommunications data
Looking at data in the context of its network, that is to say in
the context of the interconnections between other data points
or entities, is a technique which has been deployed to great
effect in other elds and industries, and has also delivered
unanticipated benets.
For example, banks and insurance companies have been
able to dramatically reduce fraud by building up a picture
of their customers’ relationships with other customers and
by understanding the networks connecting phone numbers,
addresses, product applications and a host of other data points.
By identifying a network with multiple fraudulent ‘nodes’ (people
or data points such as phone numbers), any new customers with
a relationship to that network are treated with greater caution
– an approach which has seen many tens of millions of pounds
saved.
The corollary to this fraud reduction has been the creation of
a single view of the customer – often one of the key goals of
an enterprise data warehouse. Different products procured at
different addresses would have once been assumed discrete.
Through the observation of interconnected networks and ‘fuzzy
matching’ – a technique which enables the analyst to identify
when two apparently different subscribers are in fact the
same person, based on similarities in name, address and other
identifying details – these products can be revealed to relate to
the same customer.
In other situations, missing data may in itself be signicant – forexample if a network component is not recording data accurately
– which can form an integral part of, rather than be an obstacle
to, the approach.
In addition, as these techniques are inherently designed to bring
together data which appear unrelated (e.g. ‘Acacia Avenue’ and
‘Accacia Street’), this single view of the customer has been found
to help organisations cut through the kind of poor data quality
which would historically break a data warehouse-based analysis.
Unstructured text analytics
The analysis of unstructured ‘human’ data sources, which arenot typically found inside an enterprise data warehouse – such
as emails, text documents, blog entries, customer contact
transcriptions – can provide new insights for an organisation
looking to better understand its customers or discover how
internal processes are working in reality.
Seeing how information travels through an organisation via email
can shed new light on the informal processes that employees
create in order to do their day jobs, providing invaluable
information for any process re-mapping activity carried out to
reduce operational expenditure. Analysing call-centre records
and feedback forms can provide new insight into what customersare saying or feeling about the service being delivered, giving
organisations the chance to take action to prevent churn.
As unstructured data make up an estimated 80% of a typical
organisation’s information, text analytics will become an
essential tool in the quest to exploit internal data to support
more intelligent decision-making.
Data-driven thinking
If the analysis of information networks or unstructured
data allows an organisation to make sense of human data,
management decisions can be made on the basis of empirical
evidence rather than on instinct. For example, looking at the
Formula 1 industry we can see how a data-driven approach can
deliver results: when Lewis Hamilton passed Timo Glock on the
nal corner of the Brazilian Grand Prix to win the 2008 Formula
1 World Championship, a computer programme was cited as the
brains behind the victory. Faced with a decision about whether
to change tyres, race tacticians turned to empirical evidence.
The software told them that Hamilton’s lap times on new tyres
would enable him to catch Glock. This was an example of how,
in the most critical moments, trusting data can deliver hugely
benecial results.
Exploiting the data
To get the most from the new data exploitation techniques and
tap into the power of unstructured data, telcos need to take a
different approach to collecting and analysing data. Given its
volume and nature, the way the data is sampled and extracted,processed, secured and assured all need to evolve. The following
section outlines some of the changes required.
Construct a rapid analytics environment
As data outside the data warehouse becomes more important
for supporting decision-making, telcos will need to develop
efcient processes for extracting large volumes of data from
operational systems and making them available for analysis. If
the data is ‘free-standing’ – in other words, it can be extracted
with no impact on other important data sources – the operator
may save a considerable amount of time, and cost, manipulatingand applying their analytical tools directly onto the data without
the constraints of a data warehouse. This is a particularly useful
option where there is no requirement to integrate the data with
the structured set held within the data warehouse. This approach
also enables the operator to develop a suitable environment for
the analysis to take place. Typically, this involves the creation
of ‘sandpit’-type capabilities – computing environments
constructed with sufcient disk-space and processing power to
accommodate large data sets. Here, the operator can rapidly
set up and tear down various advanced analytics capabilities to
determine the benet to be gained from different approaches.
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Introduce sampling
Taking a sample, rather than full data set, signicantly reduces
data volumes while still providing sufcient data to generate
robust insights which the organisation can use with condence.Sampling overcomes one of the key barriers to exploiting many
of the data sources: the scale of the computing infrastructure
(especially disk space and processing power) required to perform
the analysis. The sampling methodology does need to be
thought through carefully, however. For example, a random
sample of call records across the country will be less useful for
most analyses than all the call records for a group of customers
selected from a specic part of the country. Similarly, the web
logs for a pre-selected sample of customers will yield more
useful results than a random sample of all web logs, as it will
preserve the integrity of user sessions to support better insights
into customer behaviour. Network analysis often benets fromgeographic-based sampling initially, so that the approach can
be demonstrated on a region before the analysis is gradually
extended nationally.
Furthermore, if the analysis only needs to be run periodically,
then one-off snapshots of the data may be sufcient. For
example, if an ISP wishes to analyse internet trafc data to
support ‘intelligent’ trafc management policies, usually it needs
the analysis refreshed on a quarterly basis, given the timescales
for updating the policy and measuring the effect on customer
behaviour. Therefore, in this example, the ISP could extract the
required data on an ad-hoc basis rather than attempting to builda complex data feed that is only used on an intermittent basis.
Increase adoption o analytics
Advanced data exploitation often requires a shift from ‘self-
service’ type analytics, where end users select and generate
their own data, to a ‘black-box’ model where advanced tools
or specialist teams develop highly-targeted analytics to suit a
specic business area. The outputs are highly tailored towards
supporting operational decision-making; for example, lists of ‘at
risk’ customers, details of faulty network components or trafc
management policy recommendations. However, the underlyingcalculations are less transparent to the business, whose trust in
the outputs is therefore primarily based on their efcacy rather
than the approach. This in turn implies a culture shift is needed
within the organisation, in which people become more accepting
of the use of analytics to drive decision-making but have less
involvement or ownership of the analytics process.
Ensure security protocols are robust
Telcos will also need to ensure they have robust and efcient
security protocols in place to ensure the data is kept safe and
used appropriately once extracted. These protocols will need tocover the security of the analysis environment and supporting
infrastructure, the anonymisation or encryption of particularly
sensitive data, restrictions on which personnel can access or view
the data, and clear rules on how the outputs of any analysis can
be distributed or used.
Achieving ‘better for less’
As the pressure increases on telcos to derive more value from
their data, they must reach out to sources of data that have not
been traditionally captured by a data warehouse. In so doing,
they must also embrace unstructured ‘human’ data from across
the enterprise, which exists in non-standard formats, and may
have patchy integrity, yet nevertheless holds the potential to
unlock huge business value.
Using new analytical methods, such as advanced network
analytics or unstructured text analytics (proven in other
industries such as nancial services), and adopting data-
driven decision making – whereby data is trusted to inform
management decisions – telcos can signicantly increase
the level of insight they generate about their operations and
customers.
Network performance data, trafc data, CDRs and weblogs have
the potential to deliver insights that can:
• vastly reduce network monitoring effort in the network
operations centre;
• optimise capital expenditure on the network;
• deliver smarter trafc-management policy decisions;
• prevent fraud and protect revenue;
• improve understanding of customer behaviours.
Changes are required to deliver on these promises, with the
establishment of rapid analytics environments, sampling of data
and the incorporation of more powerful analytical tools. The
costs of doing so are a fraction of those which have been soaked
up by data warehouses, and their related constructions, and do
not require the adoption of draconian data integrity measures
What is more, the benets of adopting these new approaches are
already being proven by telcos in a number of areas.
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6 Unlocking the value in telecommunications data
Understanding customer experience to prevent churn
At least two telco operators have recently started to apply text
analysis techniques to call centre, email and online web logs, to
identify key word combinations which indicate poor customer
sentiment which may translate into downstream churn or
product downgrades. In addition, some operators have begun to
stitch together disparate data (IVR logs, provisioning, call centrerecords, helpdesk etc.) to develop a ‘single service view of the
customer’ as a basis for identifying, via statistical analysis, key
failure points in the customer journey. Initial results indicate
that proactively following up with customers identied as
having received relatively poor levels of service has a signicant
impact on service-related customer churn and complaint levels.
Improving up-selling and marketing efciency
Some mobile operators are developing sophisticated analysis
of the social networks present within their subscriber bases,
by applying network level analysis techniques to billions of
call data records. These operators are seeking to identify
the ‘key inuencers’ within their subscriber base that have a
disproportionate impact on the churn and up-sell decisions
of others. One operator recently found a threefold increase
in mobile broadband take-up from viral adoption rather than
direct targeting. Another operator discovered it could double
the accuracy of its churn prediction models by including social
network type effects, such as whether a key inuencer in a
subscriber’s social network recently churned.
Improving detection o raud
Network level analysis is also proving increasingly valuable
in identifying and stopping organised fraud through the build
up of a ‘risk picture’ of individuals based on their network of
relationships with other individuals, and the overall behaviour of
that network. CIFAS reported a 57% increase in fraud related to
communications products between 2008 and 2009. Whilst the
approach is only starting to be adopted by telecoms operators,
other industries have experienced a tripling of fraud investigator
productivity through this approach, based on nding both more
suspicious behaviour, and reducing the number of false leads.
Procurement and security departments in the telecoms and
other industries are also looking to use network level analytics
to extend data-driven fraud detection into insider and supply
chain fraud.
Minimising network capital expenditure
One ISP analysed protocol data generated from subscribers’
online activities, to identify the type of trafc and bandwidthusage prole of its subscriber base. It then segmented its
subscribers into distinct behavioural clusters, based on their
network trafc proles. Based on an objective view of which
groups consumed the most bandwidth and contributed the
most to usage peaks, the ISP was able to accurately identify the
customer experience impact of different trafc management
policies. As a result, it has instituted an ‘intelligent’ trafcmanagement policy which protects the customer experience of
over 99% of its subscribers, and enabled it to avoid over £25m
network development costs in 2009.
Reducing operating expenditure in network operations centre
A xed-line operator recently consolidated performance and
alarm data from its service, network and transmission layers,
along with trouble ticket data, to identify and strip out false
alarms to create a view of the true state of network health, and
to reduce the volume of alarms reaching agents. As a result of
this analysis, the operator established that 60% alarms were
part of a repeating pattern, generating signicant numbers of
unnecessary work tickets. In addition, it was able to codify
the characteristics of major incidents, enabling immediate
automated notication of a major incident in 65% of cases.
Case studies
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About Detica
We live in a complex and constantly changing world.
Organisations everywhere are looking or ways to expand the
services they provide to their customers while simultaneously
tightening their belts and conronting new hazards.
Detica helps government and commercial organisations exploit
inormation to deliver critical business services more eectively
and economically. We also develop solutions to strengthen
national security and resilience, enabling citizens to go about
their lives reely and with confdence.
By combining technical innovation and domain knowledge,
we integrate and deliver world-class solutions – oten applying
our own unique intellectual property – to our clients’ most
complex operational problems. Our services range rom strategyormulation and business change through to sotware and
hardware technologies, systems integration and managed service
delivery.
Detica is part o BAE Systems, the premier global deence,
security and aerospace company. BAE Systems delivers a ull
range o products and services or air, land and naval orces, as
well as advanced electronics, security, inormation technology
solutions and customer support services.
Find out more:
If you require further information please contact:
Detica Limited
SRP3
Guildford
Surrey
GU2 7YP
T +44 1483 816000
F +44 1483 816592
www.detica.com
© 2010 Detica Limited. ALL RIGHTS RESERVED. This document is copyright o DeticaLimited and/or its ailiated companies. Detica, the Detica logo and/or names o Deticaproducts reerenced herein are trademarks o Detica Limited and/or its ailiatedcompanies and may be registered in certain jurisdictions. Other company names, marks,products, logos and symbols reerenced herein may be the trademarks or registeredtrademarks o their owners. Detica Limited is registered in England under number 1337451and has its registered oice at Surrey Research Park, Guildord, England, GU2 7YP.
A BAE Systems Company