drilling for digital gold...big data & analytics 'gold mine' identified but no broader...

Drilling for Digital Gold

Thomas Krüger

May 2017

WeDo-DrillingForDigitalGold-May2017-TK-DUS-vFWeb.pptx 1

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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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d.

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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d.

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



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Some types of data are not widely collected

1


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d.

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



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d.

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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d.

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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d.

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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d.

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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d.

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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d.

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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d.

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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d.

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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d.

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

drilling for digital gold...big data & analytics 'gold mine' identified but no broader...

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