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Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.1
Information Excellence SeriesToday’s Speaker
Telecom BI Reference Architecture for enhancing customer intimacy
A Practitioner’s Deep Dive
Jawahar Sabapathy
Principal Architect, CSG International
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.2
Telecom Enterprise BI Reference ArchitectureEnhancing customer intimacyJawahar Sabapathy
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.3
In the Next Hour
Typical BI applications in different industries – 5 minutes
Sample Telecom industry applications – 15 minutes
Enterprise BI Reference Architecture - 15 minutes • Subject areas
• Source systems to get 360 degree view
• Top level usecases realized using this - OLAP as RADAR
- Mining as targeted precision instrument for the usecases
Deep dive in to a specific application – say Retention Management – brief on important variables that are potential drivers, a process for valued customer retention. – 15 Mts
Challenges/Enablers for achieving BI unique to the industry –10 minutes
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.4
Vertical use-case scenarios
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BI is Used Everywhere
TheBusiness Intelligence
Domain
Sales PatternsIntegrated Customer ViewCampaign ManagementMarket Basket AnalysisCustomer ValuationAnalytical CRM
Order Life CycleInventory AnalysisQA/TQMSupplier ComplianceDistribution AnalysisAnalytical SCM
Call Behavior AnalysisFraud DetectionChurn AnalysisService Usage AnalysisPromotion EffectivenessAnalytical CRM
Credit RiskMonetary RiskBASEL/AML/ALMAnalytical CRMInsurance rating engines
P & L AnalysisComplianceProfitabilityPerformance AnalysisSegmentation Analysis
ALLINDUSTRIES
MFG
RETAIL TELECOM
FINANCIAL
GOVERNMENTNational SecurityCrime AnalysisHealthFraud DetectionContractsImmigration
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.6
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BI is Used Everywhere
TheBusiness Intelligence
Domain
Sales PatternsIntegrated Customer ViewCampaign ManagementMarket Basket AnalysisCustomer ValuationAnalytical CRM
Order Life CycleInventory AnalysisQA/TQMSupplier ComplianceDistribution AnalysisAnalytical SCM
Call Behavior AnalysisFraud DetectionChurn AnalysisService Usage AnalysisPromotion EffectivenessAnalytical CRM
Credit RiskMonetary RiskBASEL/AML/ALMAnalytical CRMInsurance rating engines
P & L AnalysisComplianceProfitabilityPerformance AnalysisSegmentation Analysis
ALLINDUSTRIES
MFG
RETAIL TELECOM
FINANCIAL
GOVERNMENTNational SecurityCrime AnalysisHealthFraud DetectionContractsImmigration
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.7
Telecom Vertical
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Telecom Transformation
Fixed Mobile
Voice Data + Voice
Postpaid -> Prepaid
“Minute Factories” -> App factories
Outsourcing Waves
Business models change ( Carriers, Tower businesses, Franchisees)
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India Key Points
Wait List -> On Demand Phone connection
High Competitive industry
Talkative nation
Sachets market
Growth reaching stages of revenue plateau, high subscriber additions, multi sims
Growth in rural markets
Relatively Low Broadband penetration
Mobile will be access to data / services / net and community !
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Transformation Axes
Technology driven requiring huge capex/opex (LTE re-engg) - 4G, All IP, M2M
Regulatory driven • on tariffs, security, customer care and SLA, MNP removing last
stickiness
Competition driven • forcing tariffs down, ask for higher innovation rate
• Encourages better CRM / BI
• New corners of competition such as OTT, more playersd vying for same digital content / pipe
Customer driven• Profiling and Mass Customisation, More Data / Apps
Business Model driven• Cloud
• Eco system of Content and App Providers, OTT, Value Chain
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.11
Telecom EA – TMF eToM / Business Process Framework
eToM, Business Process Framework is TmForum Copyright.
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Telecom EA – TMF eToM / Business Process Framework
Operations
Fulfillment Assurance Billing & Revenue
Management
Operations Support
& Readiness
Service Management &
Operations
Resource Management &
Operations
Supplier/Partner Relationship
Management
Customer Relationship
Management
Retention & Loyalty
Customer Interface Management
Selling
Resource Data Collection & Distribution
Supplier/Partner Interface Management
S/P
Performance
Management
S/P Problem
Reporting &
Management
S/P
Requisition
Management
Resource
Provisioning
Resource
Trouble
Management
Resource
Performance
Management
Service
Quality
Management
Service
Problem
Management
Customer
QoS / SLA
Management
S/P Settlements
& Payments
Management
Service Guiding
& Mediation
Marketing
Fulfillment
Response
S/PRM
Support &
Readiness
SM&O
Support &
Readiness
RM&O
Support &
Readiness
CRM
Support &
Readiness
Service
Configuration
& Activation
Order
Handling
Problem
Handling
Bill Payments & Receivables Mgt.
Bill InvoiceManagement
Manage Billing Events Charging
Bill InquiryHandling
Resource Mediation
& ReportingManage
Workforce
eToM, Business Process Framework is TmForum Copyright.
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.13
Telecom EA – TMF eToM / Business Process Framework
eToM, Business Process Framework is TmForum Copyright.
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.14
Telecom BI Applications
Sales & Marketing
Product management and VAS
Customer Care
Financials
Network & Traffic
CxO
Compliance & Regulatory
Being a system linking Ops to
Strategy, BI has to solve business problems using
transactions data
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Decision Support Use-case Scenarios
Customer Intimacy - CRM• Segmentation by ARPU, Loyalty, Geography
- Use this for Larger Loyalty Card Program /Co Branding- Use this to sell advertisement space in Mobile Bills
• Study current High ARPU customers and refine Acquisition Strategy ( Location, Profile, Dealers, Payment Type)
• Package Migration for increased loyalty• Customer Care Feedback – to reduce customer care costs and shorten query
resolution, TCE• Use Segmentation as a backdrop in many applications such as network design,
Product Uptake, Policy decisions, Retention Churn / Retention
• Model, Segment, Offer and Retain
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Decision Support Use-case Scenarios
Product Mgmt / Marketing• New product based on traffic ( micro segmentation) – Examples• New product creation/refine based on Distribution of key facts such as subs,
MoU, Invoice, Voucher Type, Prepaid Plan• Leverage Successful, high margin products into other geographies• Promotional Offers on Products using the Past Trends and justify financially –
Shorter Product Approval cycles • Understanding Major contributors to Revenue and Protect/Nurturing those
(80:20 rules)• Bundling of VAS products (what goes well , market basket)
- Broadband + 3G- Ring Tone and Ring Backs combo- Logos / Wall papers. Themes
Sales and Marketing• Identify affinity segments for up sell/cross sell of new services• Advertising / Co branding• CLM ( Right Offer to Right Customer at Right time) – See which offers have more uptake
– to what segment• Dealer Performance and Dealer Fraud
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Decision Support Use case Scenarios
Finance• Payment Patterns and Promotional Schemes for early payment encouragement• Rated Revenue vs Invoiced Revenue – Effect of Subscription and Discounts on Products• Promotions Approval based on traffic trends – What If
Planning/ Traffic engg / Route Optimization• Where do we add next BSC ? • Where do we strengthen the POP Capacity ( for which circle , which operator ) • Where we need to add eNodeBs/ femto cells ? • Fault / Performance mgmt data trending and prediction• Evolution into CEM• Roaming Trends
Performance • Rank Circles by Customers / Revenues / Churners
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.18
DSS Use case Scenarios
Fraud / Revenue Assurance• Has specialized products that employ data analytics and
techniques such as finger printing, prediction to identify fraud and preventing them to minimize revenue leaks.
Enterprise Risk management
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Summary Usecases
Customer Intimacy – Achieve and leverage Enterprise wide
Products Performance - Measure / Track / Manage
Targeted, personalised marketing – Closed Loop
Trends and Patterns – Measure and Leverage for Products, Traffic, Network Plans
Popular Countries/Carriers – Measure and manage for capacity, products
Financials – Justification for new Products / Promos, Campaign ROI, Effect of Discounts on revenue, 80-20 discoveries
Risk management• Fraud, RA
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.20
Tier One CSPs Rank their BI Priorities
0 2 4 6 8
Customer & Product Profitability
Analyses
Market Segmentation
Customer Churn
Service Provisioning/Activation
Analyses
Revenue Assurance
Channel Performance
Customer Service Performance
Increasing Financial Visibility
Network Performance
Management
Network Planning and designBusi
nes
s In
tell
igen
ce P
riori
ties
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Enterprise BI Architecture
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Architectural components
Subject Areas Tuned, Comprehensive Data Model with detail and summaries enabling
slice & dice, drill down / drill thru.• Enabling 360 degree customer view
Source Systems Data Staging and Integration EDW Pre-select building blocks
• OLAP as RADAR including CXO Dashboard, BSCs• Mining • ETL/DB• Short Term R/T Profiling• CEM• Search and BI
Metadata / MDM Integrated business rules for specific apps
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Subject Areas
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Sample Subject Areas
Usage Analysis Interconnect Usage
Analysis Customer
Churn/Retention Customer Profiling Up-sell/Cross-Sell Campaign management Touch Point History Orders, Order Lifecycle,
Order Fulfillment Customer Payment,
Customer Invoicing Revenue Analysis
Supplier Order Fulfillment
Sales Performance / Channel Profitability
Content
Network Analysis
Network Capacity
SLA Compliance
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Architecture at a glance
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BI PlatformIntegrating customer insight into business processes and systems
Dimensions
Facts
Aggregates
Scoring History
Data Sources
Intelligence HubProfitability
Voluntary Churn
Channels
Direct Mail
Scoring Engine
ETL
Search
IVR Survey
Segmentation Engine
Involuntary Churn
Customer Experience
Bad Debt, Credit score
Collections
Behavior
Response Attribution
Call Center
Customer Insight Hub
Customer Intelligence Platform
Performance Reporting
External Sources
Surveys
News/Internet
Source C
Web
ServiceET
L
CRM & Call Centre
Billing
Order Mgmt
Mediation
Network
SDP
OLAP/Visualization/CxODashboard
OSS
Meta Data
Presentation Layer
CEM
Campaigns
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Top-down / Bottoms-Up
“… The data warehouse is nothing more than the union of all the data marts …” Ralph Kimball Dec. 29, 1997.
“You can catch all the minnows in the ocean and stack them together and they still do not make a whale.” Bill Inmon Jan. 8, 1998.
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Source Systems
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Source Systems - Dimensions
CRM/Customer Care• Customer Demographics (Age, Sex, Profession, Address & zip,
household)
Dealer Management
Billing- Product / Services
Prepaid- Products, Vouchers
Reference• Cell Geography
• PLMNs / Operating areas / Telcos
Include all business units ( Fixed, Mobile, ISP…)
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Source Systems - Facts
Facts• Billing & Prepaid
- Rated usage, MoU, BoU- Invoices & Payment- Vouchers , Topups
• Mediation- Raw Minutes of Use, BoU
• Network- Usage, Traffic, Performance data, Faults
• SDP- Content, Content Provider- VAS
• Roaming & Interconnect• Call Centre
- Inbound events
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.31
Key Dimensions
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Key Dimensions & facts
Demographics
Time
Products
Geography
Business Units
Origin and Destination analysis
Social Network Analysis
ARPU
Loyalty Duration
Calls / MoU / BoU / Events
Invoice amounts
Payments
Top-ups
Quote to Cash (Fulfillment Velocity)
Time to resolve
# of churners, additions
Suspense revenue
Detail and Aggregates
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Applications
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Pre Integration / Pre-selection
Support popular, Industry standard• ETL, DB, OLAP, Mining, Marketing
Adapters for popular Billing systems, CRM, Mediation and Network
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Visualization evolution
#
#
#
#
#
#
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Products Performance – Distributions
0
1000
2000
3000
4000
5000
6000
Plan Unlimited
Plan 2GB Plan Lite Plan M2M
Data
in
MB
/month
See distribution of various facts ( Data Volume, Revenue, SMS,MMS, MoU) by dimensions such as Package, Customer segments to understand the distribution. Extremely useful in tuning Product offerings, fixing Free Units, Overage charges, financial modelling for What If.
Analyse by device categories to refine
Device Bundling plans
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Retention Management
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Satisfaction , Loyalty & Competition - HBR
Classic Harvard Business Review article ‘Why Satisfied Customers Defect’ by Thomas O. Jones, W L Sasser, Jr. - HBR OnPoint Article –Copyright Harvard Business School Publishing Corporation.
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.39
Churn – some industry details
Barriers to switching communication providers been so low. MNP, Data ! And while loyalty tends to be high among older consumers, younger consumers
are accustomed to continuously shopping around for the best plans, features, and perhaps most importantly – the coolest phones.
According to global consulting firm,Accenture, the steady increase in customer churn rates is being driven by several factors, including equipment envy, flexible pricing plans, customer service, network performance, and number portability.
And as deregulation continues and technology advances, the players in the communications industry continue to expand beyond the traditional telecommunications companies to include cable providers, wireless service providers, satellite service operators, and broadband phone service providers.
Customer retention statistics for consideration:• Customer churn among cable and telecommunications companies is projected to cost
organizations up to $10 billion annually worldwide.• Carriers will lose 15% to 30% of their customers each year. In the U.S. alone, 20 to 30
million customers or more are expected to defect annually.
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Why do customers churn ?
Product Price
Product Features
Complaint Resolution
Branch Location
Mistakes
Poor Service
Death
Long Queues
Other
0% 5% 10% 15% 20%
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Churn Reduction Methods
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Data Mining Techniques in Retention Management
The churn analysis consists of :
• Comparing customers categorized as Churners and those categorized as Non Churners according to their characteristics which are gathered from
historical data.
• Identify the principal characteristic differences between Churners and Non churners.
• A churn model mathematically quantifies the pertinent correlations between these characteristics and the Churn score of each customer.
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Retention Management process
Prepare and Audit Churn Dataset with relevant variables and history, including customers who churned
Build, validate and train model
Generate Scoring of current active customers
Use OLAP to identify segments of interest – customers with high margin contribution, Loyalty
Use campaign management tools for design , execute and track retention campaign
Model Performance and stability over time
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Churn model example
VARIABLES CATEGORIES & WEIGHTS
Age <30 31-52 >=52
143.2 36.1 2.7
Service Duration <22 22-23 23-28 28-40
50.6 68.5 78.9 -1.4
Tariff Plan Code M0 M1 M2 M3
43.7 -34.6 5.3 11.3
Invoice <18 18-27 27-83 >=83
10.8 57.6 33.4 29.7
Months left <2 >=2
45.6 33.0
Complains/ Inquiries <2 >=2
29.8 89.5
ZIP Code M0 M1 M2 M3
229.0 44.7 7.1 85.4
# calls to fixed line <5 5-12 12-15 15-18
48.6 19.8 -13.3 48.4
# out calls to competitors <13 13-34 34-63 >=63
39.4 13.6 70.8 30.9
Duration of out calls <19 >=19
35.0 -1.0
Duration off peak calls <12 12-44 44-59 >=59
39.7 15.1 68.3 27.7
Typical profile of a churner
• Less than 30 years old
• Service : less than 28
months
• Calls Customer Care
more than twice a month
• Calls between 45 and 60
minutes per month
during off peak hours
• TariffPlanCode = A,M,Y,Z
• ZIPCode = 22, 44, 48, 79
• Social Network Analysis
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Evolving Tactics for retention mgmt
Bundling increases stickiness–
• As much of a customer acquisition as a customer retention tool,
• the more products a consumer has from a single vendor, the higher the exit barrier.
Predictive Analysis –
• Customer data analytics allow CSPs to analyze
• customer profitability and predict churn.
Outreach –
• Historically, outbound activity in the communications sector has almost entirely been devoted to customer acquisition. Now, outreach programs actively target high-value, at-risk customers with marketing offers to prevent churn. * careful – anti spam, regulatory compliance
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.46
Final Nail
Technology, services, products can be copied - but
not the organizational culture
Leverage and exploit data fullest to your advantage
Maximize every customer interaction
Copyright © 2011 CSG Systems International, Inc. and/or its affiliates (“CSG International”). All rights reserved.47
Industry Specific Challenges to BI
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Telecom EBI challenges / Pros
Data !!! Big Data• Large sub base – 10 – 150 million for e.g
• Heavy transactions / sub / day – 30+
Long Medium trends vs quick RT profiles
Data availability, quality• Harder to get in some places
Terminology / Business Rules & MDM
Internal Support / Exec Buy-in
Longer Implementation times
Pros• Have the contact and billing relationship
• Almost all data is collectable automatically
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Thank You!
