Big Data survey: new revenue streams top CEM as biggest opportunity

European Communications’ latest quarterly survey has found that senior telco executives believe the creation of new revenue streams, such as selling data to third parties, is the biggest opportunity that Big Data presents operators with.

altOver one third of respondents, 35 percent, chose the potential offered by new revenue streams ahead of improving customer experience, which polled 28 percent, and creating differentiation from competitors, favoured by 14 percent.

The result left analysts split.

“Big Data-generated insight potentially provides access to entirely new business propositions,” said Milan Sallaba, partner at KPMG’s Telecoms, Media and Technology practice.

However, Informa principal analyst Julio Puschel said operator priorities should initially lie with customer experience through insights gained via Big Data.

“The first stage should be to focus on improving the relationship with customers and their overall satisfaction with the service,” he said.

What is not in any doubt is that Big Data should be a key strategic priority: 91 percent of all respondents (and 96 percent of operators) agreed with that statement.

However, just 54 percent of operators said Big Data was a current strategic priority in their organization. Twenty four percent said they didn’t know, while 22 percent said it definitely wasn’t.

“Despite the fact that the potential for Big Data is evident and not new, most operators are still not ready,” commented Puschel.

For this to happen, several challenges must be overcome.

According to a majority of all respondents, 27 percent, not understanding the potential that Big Data presents is the biggest barrier to operators executing a successful strategy.

For operators themselves, this reason was also the most popular barrier, but it shared top spot with fears over cost.

A lack of access to quality data at source and legacy systems that prevented the sharing of data were cited as the second biggest barriers.

“The barriers are significant,” commented Ovum’s Clare McCarthy. “The cost aspect is huge, but the return on investment will come from improved customer experience, great efficiency in offer design, more accurate billing and the ability to exploit data for marketing campaigns.”

Another key pillar of a successful Big Data strategy relates to human resources.

Although just 3.5 percent of respondents cited a lack of qualified staff as being the biggest barrier, when we asked operators a specific question on the talent at their disposal they gave a more significant answer.

Nearly two-thirds of operator respondents, 63 percent, said that they do not have the right number or quality of staff in place to manage and exploit the data they possess.

Commented Sallaba: “The required competencies are quite a rare skill set and the reality is that there are too few people around today that have them.”

Personnel issues aside, what lies at the core of an operator’s ability to make a success of Big Data revolves around collating, analyzing and exploiting the huge amounts of data in their possession.

On a scale of 0-10, where 10 equals doing the maximum possible, 37 percent rated their ability to collate and analyze data between seven and 10.

Forty percent gave themselves a score of between four and six.

Operators were less sure when it came to rating themselves on how well they exploit data. On the same 0-10 scale, just 28 percent rated themselves between seven and 10.

A further 28 percent gave themselves a score of between zero and three.

“The numbers are clustered around the mid point, so it appears the early and late majority are addressing the issue now,” said McCarthy. “However, we know that operators have lots to do.”

Added Sallaba: “The interplay between data collation, analysis and commercial action is not a smooth and a well-oiled machine”.

Many operators appear to be road-testing strategies in controlled environments as a significant minority of operators is not yet implementing their data analytics strategies on an enterprise-wide basis.

When asked, 45 percent said they were implementing such strategies department by department.

A lack-of decisions being made in real time is also holding operators back.

When asked, 59 percent of respondents said operational decisions were being made entirely or mostly manually/offline.

The final piece of the jigsaw relates to technology.

Here, it appears the vendor community has some work to do to both educate their operator customers about what is available and improve the quality of their offerings.

Over a quarter of operators said they had little awareness of, and visibility on, Big Data products currently on the market.

“There are lots of solutions out there, so it is quite a difficult thing for operators to get a handle on,” said McCarthy.

Whether this is the case or not, just 18 percent of operators are happy with the products on the market currently.

Clearly, operators are still in the early phases of a Big Data transformation. However, the vast majority is clear where they want to get to.

Nearly nine out of ten, 87 percent, think Big Data will be a strategic goal in their organisation in five years time.

Almost the same number, 83 percent, of all respondents believe operators will primarily manage data and as well as providing communications services in the future.

Concluded Sallaba: “[The survey] indicates that the potential of data analytics as a competitive differentiator is starting to be understood. Acting upon in is an entirely different matter, though.”

This is an abridged version of the survey results; a full breakdown and analysis will appear in the Q2 edition of European Communications magazine as part of our Big Data special report. Click here to ensure you receive your copy.

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