By Ajith Srinivasan & Durjoy Patranabish
Despite being a sector with relatively higher adoption of analytics, there still is huge scope for the telecom players to use analytics in more and more areas to drive revenues and deliver more value to their customers
The global analytics market (software products and outsourced services) is growing at over 12 per cent since 2012. The 2014 market size is estimated at USD 96 billion and is projected to reach USD 121 billion by 2016. Compared to the global market, the overall India analytics market size is miniscule and currently accounts for only 1 per cent share. The India market (exports and domestic) is growing at double the rate of global market at 24 per cent CAGR. In FY2014, the total market was USD 954 million and is expected to reach nearly USD 2.3 billion by FY2016. This growth is being driven by a host of factors – cloud, in-memory computing; mobile devices, social media; emergence of different business units across an organization as consumers of analytics, etc.
Telecom, like BFSI, is one of the verticals in India which adopted analytics at an early stage. Indian telecom players are increasingly focusing on analytics to limit churn rates, build loyalty and provide multi-channel, multi-service applications by proactively analyzing the subscriber and network data. Despite being a sector with a relatively higher adoption of analytics, there is still huge scope for the telecom players to use analytics in more and more areas to drive revenues, ARPU and deliver more value to their customers. However, the industry being a technology intensive industry, the adaption of analytics is primarily through the use of technology and hence there is dependency on technology to deliver insights, which can have some limitations.
A recent study by NASSCOM and Blueocean Market Intelligence on the Indian domestic analytics market highlighted the need for a six point agenda for industrialization of analytics in India. Mentioned below is an analysis of these agenda points from the point of view of the telecom services sector.
1. Raising awareness
Awareness is less of a challenge for the telecom services sector since it is one of the earliest adopters of analytics in India. Increasing the awareness levels for the telecom sector is more around new techniques and new applications in predictive analytics and modelling that will enable the Telcos to better address the rapidly changing customer needs. Also analytics to be more customized and iterative in nature, with the use of technology, rather than being completely dependent on technology.
There is huge opportunity for telecom companies to drive innovative revenue streams in a completely different industry segments. e.g.: Starbucks partnered with Telefónica O2 UK Ltd, to offer large-scale location-based mobile marketing campaigns to its consumers.
2. Creating talent
This agenda is truly sector agnostic as it affects the entire industry. Telecom players could play a more active role in collaborating with academic institutions to set-up joint programs to train new talent.
There is a clear need for more industry-academicia collaboration on this front to ensure some of the learnings from IT and BPO wave are incorporated.
3. Variablizing cost of offerings
This is a call to action for analytics vendors who wish to target the Indian domestic analytics opportunity. With increased demand for analytics the Indian Telcos would look at outsourcing analytics much more than they are doing today. However, they may be reluctant to pay the global rates which Indian analytics vendors are used to. The solution would be to look at fixed plus gain share pricing models. The telecom companies on its part should be willing to share some of the gains with the vendors, while vendors offer their services on a Cost plus basis. The telecom sector provides lucrative opportunities in terms of churn prevention, improvement of Average Revenue per User (ARPU), penetration of VAS with the help of Analytics.
4. Standardizing tools and technologies
Analytics firms should try and build analytics applications on top of existing systems and standardize and leverage common tools and technology. The telecom sector is in a competitive space with relatively high possibilities of acquisitions; hence the technical architecture should be flexible in adopting new tools, and technology integration must be seamless for easy assimilation from different systems. Integration becomes a nightmare when each component of the Analytics architecture/stack is sourced from multiple vendors. This augmented by more demanding and involved business users as well as increasing competition among Telcos has created a need for unified approach to business intelligence and analytics in telecom space. By disaggregating, and standardizing processes to scalable delivery teams, a clear roadmap of future developments can be laid. Telcos can also consider integrating analytics with legacy systems and tools to save costs. Standardization of analytics tools and technologies can enable information democracy across organizational hierarchy by providing relevant decision models for better decision making.
5. Setting up cross functional analytics teams
Analytics initiatives need to go beyond the designated “analytics teams” and need to include business groups for getting the true value from analytics initiatives. It is very important for the business and the technology team to be part of the initiatives, as there is more likelihood of acceptance of Analytics initiatives and drive business results. From the vendor perspective, stronger partnerships must be built with the clients, right through various stages of the analytics value chain, starting from data collection or audits, through data organization and data engineering, to advanced analytics and its business applications.
6. Getting C-level buy in, to drive industrialization of analytics in India
There is a high level of awareness and buy-in of analytics among the C-level executives in the telecom sector in India. However, what is lacking is a greater involvement and commitment of CXO’s which is essential for organization level adoption. Prime focus must be laid on analytics as the company’s core strategy, and must not just be driven by individual departments/IT.
(The authors: Ajith Srinivasan is Senior Vice President, Market Intelligence and Durjoy Patranabish is Senior Vice President, Analytics at Blueocean Market Intelligence)