Globally, telcos consider data analytics a key strategic pillar, and continue to invest in this direction. However, not many of them have reaped the benefits of these investments, because they face multiple dilemmas around finding the right use cases, making the right technology choices from ever-growing options, and adopting the right operating and governance models to foster data-driven decisionmaking. Our experience of working with multiple telco operators, complemented by interviews with 10+ Chief Data Analytics Officers from leading telcos across EMEA, reveals an addressable approach to these dilemmas. Telcos need to realize that data analytics is a “must-have capability” in this digital age, and related investments will help them survive in the emerging competitive landscape. They need to exploit analytics use cases across their core business functions, in customer facing as well as other areas, such as supply chain, HR and operations. Telcos are uniquely positioned to capture external data monetization opportunities, yet these should be explored on a case-by-case basis, while maintaining a primary focus on internal monetization. Lastly, telco executives must lead efforts to drive organization-wide change to foster data-driven decision-making.
Globally, telcos are facing increasing top-line pressure in their core business due to intense competition from market players, as well as the growing threats from digital-native/OTT players. Telcos, thanks to their unique positioning in the ICT value chain, have access to arguably the deepest and richest insights into customers’ behaviors and usage. Leading operators have set up analytics engines and capabilities to manage and process insight about their customers, products, quality of service and internal operations. Today, they are well positioned to enable digital ecosystems around emerging technologies such as artificial intelligence, Internet of Things and block chain. Telcos’ business models in relation to all of these technologies must be enabled by real-time analytics capabilities so data can be processed in an efficient, secure and reliable manner, and with low latency. These ecosystems add new dimensions to the increasing volume, speed and nature of data capture and advanced analytics capabilities. Telcos that are well advanced in their data monetization strategies have developed innovative external partnership models to leverage data for creating innovative products and services in digital ecosystems.
Telcos’ big data journey is not a recent trend; it began in early 2000 with their attempts to develop business intelligence and data warehousing capabilities. The journey before 2005 was based on technologies such as SQL, ETL and OLAP, and mostly limited to the IT landscape. Since 2005, with the advent of “big data” technologies (such as Hadoop), the analytics ecosystem has started to proliferate significantly with respect to technology maturity and supply, data policies and regulations. It has increasingly attracted executive focus and attention.
Several leading telcos have included “building big data and analytics capabilities” as a key strategic pillar, and continue to invest in this direction. However, the benefits of these investments have not been the same for all of them. We believe it is time for telcos to address the following complications when harnessing value from their analytics investments.
- Identifying value pools: A vast number of use cases are constantly appearing on the horizon, but where is the opportunity in the value chain, and which use cases represent the best value creation potential?
- Making technology decisions: A plethora of solutions and technology options are emerging in the data and analytics space. What are the key considerations for technology decision making?
- Choosing the optimal operating model: Different operating model archetypes exist for telcos to build data analytics capabilities in their organizations. What are the key considerations for operating model design in specific contexts?
- Bringing monetization strategy to action: Telcos need to figure out ways to execute data analytics to gain strategic advantage. How can telcos ensure sustainable execution of their big data initiatives?