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•     Cognizant Reports




How U.S. Telecoms Can More Effectively
Convert Data to Foresight
   Executive Summary                                      a more programmatic use of advanced analytics
   The business environment has never been more           to provide superior customer service, resulting
   challenging for communication services providers       in improved customer retention. This requires
   (CSPs). Buffeted by a growing threat from non-tra-     the backing of the organization’s leaders and a
   ditional players, pressure to reduce costs, drifting   cultural shift toward fact-based decision-making.
   customer loyalties and a dynamic technological         As part of the due diligence process, CSPs should
   landscape, they must also deal with the perennial      consider working with partners capable of provid-
   issues of billing abnormalities, subscriber churn,     ing analytics as a service, which not only delivers
   revenue leakage and call failures, among other         cost advantages but also leverages experts who
   issues. Above all, intense competition has CSPs        can jump-start the process and accelerate time
   venturing outside their comfort zones to improve       to value.
   customer experience and avoid being outmaneu-
   vered by competitors.
                                                          Driving Forces
   CSPs are banking on the customer data gener-           CSPs operate in an increasingly tough environ-
   ated by operational systems day-in, day-out to         ment. The industry is characterized by intense
   provide valuable insights about their custom-          competition, a growing threat from non-tradi-
   ers’ tastes and preferences. However, this data is     tional competitors, a rapidly changing technologi-
   complex and runs into terabytes, putting intense       cal landscape and increasing customer demands
   pressure on existing systems and processes.            (see Figure 1, next page). Among the challenges:
   The end result: CSPs often have little or no clue         The U.S. market is highly competitive, with
   about their customers’ actual requirements. With          CSPs vying for customer affection by offer-
   increasing customer demands and the availability          ing services at competitive prices, resulting
   of facilities that provide easy movement to the           in reduced margins. Average revenue per
   competition, CSPs need to undertake proactive             user (ARPU) from traditional voice services is
   measures to minimize customer attrition.                  steadily declining, countervailing the increase
                                                             in data ARPU1 (see Figure 2, next page).
   Advanced analytical solutions can help CSPs               The rise of over-the-top (OTT) players such as
   understand and predict customer behavior and              Google, Yahoo and Skype, which use CSP net-
   make quick and effective decisions. Combined              works to provide voice, video, messaging and
   with network analytics, which help in utilizing           other services freely to consumers, directly
   networks more efficiently, CSPs can benefit from          impacts CSP revenues.




   cognizant reports | september 2011
CSP Challenges
                                       Intensifying competition                                                                                                                                                   57%

                                       Efficiency improvements                                                                                                                            40%

                         Growing customer expectations                                                                                                                             37%

                                       Reduced time-to-market                                                                                                   30%

Reducing complexity of the company's structure                                                                                                                  30%

       Keeping pace with new technology trends                                                                                           20%

                                Sustaining profitable growth                                                                             20%

                                               Network congestion                                                     13%

                            Dealing with regulatory issues                                              7%

                                                                                        0%                   10%                    20%                       30%                  40%                   50%      60%
Source: Frost & Sullivan
Figure 1




Average Revenue Per User Deep-Dive
$60


$50


$40


$30


$20                                                                                                                                                                                                     Q2 2013


 $10


 $0
                                                                                                                                                                                   Q310
           Q304


                         Q105
                                Q205
                                       Q305
                                              Q405
                                                     Q106




                                                                          Q406


                                                                                        Q207
                                                                                               Q307
                                                                                                      Q407
                                                                                                             Q108


                                                                                                                           Q308
                                                                                                                                  Q408
                                                                                                                                         Q109
                                                                                                                                                Q209


                                                                                                                                                              Q409
                                                                                                                                                                     Q110
                                                                                                                                                                            Q210


                                                                                                                                                                                          Q410
                                                                                                                                                                                                 Q111
                  Q404




                                                            Q206
                                                                   Q306


                                                                                 Q107




                                                                                                                    Q208




                                                                                                                                                       Q309




                  Data ARPU                                 Voice ARPU                                  Linear Data ARPU                                        Linear Voice ARPU

Source: “U.S. Wireless Data Market, Q1 2011 Update,” Chetan Sharma Consulting
Figure 2



   CSPs must keep pace with growing technol-                                                                                  Following the global downturn, CSPs have
   ogy complexity and equip themselves to meet                                                                                been under immense pressure to improve
   the growing demands of their subscribers.                                                                                  operational efficiencies and cut costs, while
   The convergence of IT, telecom and media has                                                                               ensuring quality of service.
   led to the development of new products (e.g.,
   smartphones, tablets, etc.) that are driving
                                                                                                                       In addition, CSPs must regularly contend with
   demand for both data and personalized ser-
                                                                                                                       maintaining customer loyalty, a challenge made
   vices. For instance, data will account for 51%
                                                                                                                       more difficult with the introduction of portable
   of overall wireless spending by 2014, accord-
                                                                                                                       mobile numbers. Other challenges include billing
   ing to the Telecom Industry Association (see
                                                                                                                       abnormalities, revenue leakage and call failure,
   Figure 3, next page). This requires CSPs to plan
                                                                                                                       among other issues, which need to be addressed to
   and invest in infrastructure to accommodate
                                                                                                                       protect revenues. Under pressure to improve prof-
   increased demand for network bandwidth.
                                                                                                                       itability and quality of service, CSPs have placed


                                                                   cognizant reports                                   2
Traffic Growth
          4,000

          3,500

          3,000
Percent



          2,500

          2,000

          1,500

          1,000

           500

             0
                   2009                 2010               2011               2012                 2013               2014

                  Average Data Growth          Traffic Growth per Site*        Tech-Adjusted Traffic per Site**

Source: “TIA 2011 Playbook,” Telecommunications Industry Association, and “FCC Report – Mobile Broadband: The Benefits of
Additional Spectrum,” October 2010.
* Data demand adjusted for additional cell sites.
** Data demand adjusted for special efficiency improvements.
Figure 3



renewed focus on customer retention and, along                    bottlenecks, address capacity concerns and uti-
with it, the tools to improve customer service.                   lize network infrastructure intelligently. Further,
                                                                  by deploying analytics to streamline business
                                                                  operations, CSPs can reap sustainable efficien-
Customer-Centricity Imperative                                    cies, which could prove to be a game-changer.
According to a Bain & Co. study, a 5% increase
in customer retention can improve profitability
by 75% for a company across many industries.                      Analytics for Improved Customer
With traditional communications services being                    Relationship Management
increasingly commoditized by the emergence of                     Building long-term profitable relationships with
IP-based networks, CSPs have put greater empha-                   customers is the key for any organization. Consid-
sis on improving the customer experience in a                     ering CSPs’ huge, diversified customer bases, with
bid to extend customer retention. Achieving this                  their varying service requirements, customer rela-
requires a greater understanding of customer                      tionship management becomes an arduous task.
behavior and needs, as well as superior service.
                                                                  Prohibitively high customer churn rates in the
The good news is that CSPs already possess rich                   early 2000s forced CSPs to invest significantly
and abundant customer data. Leveraging this                       in CRM systems, with the hope of achieving radi-
data through advanced analytics will enable CSPs                  cal improvements in customer relationships and
to develop deeper insights into customer usage                    profitability. However, a majority of these CRM
and preferences, predict their future require-                    initiatives failed to realize their full potential, as
ments and make more effective business deci-                      CSPs struggled to mine the insights contained
sions. CSPs should also ensure that customers                     within these systems.
are connected and have access to persistent ser-
vices around-the-clock, which requires efficient                  Merely collecting customer information through
network capabilities.                                             CRM systems does not aid in decision-making.
                                                                  Consolidating and analyzing data related to sales,
Networks are the key to CSPs’ business strategy,                  marketing and service provides deep insights into
and their performance is vital to customer satis-                 what customers want. Analytics provide CSPs
faction. That’s why CSPs focus on network health                  with the power to analyze enterprise-wide data
as their top priority in order to avoid sudden                    and make effective tactical decisions that can
outages. Network analytics allow CSPs to con-                     improve customer satisfaction at various stages
tinuously monitor network performance, identify                   of the customer relationship, from acquisition,


                                        cognizant reports         3
to improving customer spend and retention. If           Further, marketers can identify prospective cus-
properly configured, CRM systems provide a              tomers, predict customer needs in advance,
360-degree view of customers and enable differ-         design targeted marketing campaigns and pro-
ent groups in an organization to leverage a single      vide customized services, which will improve cus-
version of the truth.                                   tomer experience, ultimately increasing customer
                                                        loyalty and profitability (see Figure 4).



Embedding Analytics Across the Customer Lifecycle

    Prospecting and
                                       Growth                  Manage                      Retain
      Acquisition




        Customer
                                                             Social Media
       Profitability                 Customer
                                                              Analytics
        Analytics                   Segmentation                                       Churn Analysis
                                                            Social Network
         Customer                     Product                                           Customer Risk
                                                               Analysis
      Lifetime Value                   Affinity                                           Analytics
          Analysis                    Analytics
                                                            Tariff Modeling




            Identify                  Uncover
                                                               Develop                    Develop a
           profitable                up-sell and
                                                             personalized              robust customer
           customers                  cross-sell
                                                               offerings              retention strategy
                                    opportunities



Source: Cognizant Research Center
Figure 4



Customer Lifetime Value                                 profitable customers and retaining them is impor-
Customer lifetime value (CLV) is the profit or loss     tant to sustain and also gain referrals.
generated by a customer during a business rela-
tionship. It reveals how much a new customer            Customer profitability analytics allow CSPs to
is worth based on specific inputs — for example,        determine who their most profitable customers
how long the customer will stay with a company          are by comparing the revenues generated from
(estimated value), a customer’s purchase behav-         these customers with the cost of providing ser-
ior and profitability. Based on the CLV, the CSP’s      vices to them during a particular period. This is
marketing departments can decide how much               useful for understanding what causes the lack of
can be spent on acquiring a particular customer         profitability of some customers, as well as how to
type. By calculating segment-wise CLV, CSPs             convert them into more profitable ones by devel-
can understand which segments provide better            oping new products or tweaking existing ones and
opportunities and direct their customer acqui-          developing targeted marketing campaigns.
sition and retention strategies. For instance,
CSPs can focus on providing better services to          Targeted Marketing Campaigns
a few high-value (post-paid) customers vs. many         Competitors’ marketing campaigns are one of the
less-valuable customers, although the latter could      prime factors for customer defection. It is, there-
be targeted later to buy more services.                 fore, important to consistently engage customers
                                                        with timely and relevant marketing campaigns.
Customer Profitability Analytics
Based on the Pareto Principle — which states            The first step is to break down complex customer
that 80% of a company’s revenues is derived             data. By analyzing customer calling patterns —
from 20% of customers — identifying the most            including the operator services they use, their




                                    cognizant reports   4
demographics and other personal information —           in the case of new customers from whom the
the subscriber base can be divided into segments        company is yet to gain return on investment.
based on behavioral patterns. Such segmentation
allows CSPs to understand issues unique to each         Customers depart for a number of reasons, rang-
group and address the group as a whole.                 ing from poor customer service and inappropri-
                                                        ate billing, to lucrative offers from competitors.
Customer segmentation analysis allows CSPs              New offerings such as mobile number portability
to design marketing campaigns tailor-made               have eased defection to a competitor’s service,
to addressing the needs of each segment. For            making it possible to complete the move in a mat-
example, high-value customers who account for           ter of hours. It is, therefore, important for CSPs
a major chunk of revenues or consume higher             to understand the current level of satisfaction of
profit services can be offered special tariffs and      their customers and identify in advance custom-
other services that incent them to stay longer          ers who are most likely to switch loyalties.
without compromising profitability. Further, pre-
dictive analytics can be used to understand which       Churn management solutions, including social
customer segment is most likely to buy a product        network analysis, allow organizations to iden-
and during which period, resulting in better ROI        tify customers who are most likely to defect
for campaigns.                                          based on their behavior. Further, by combin-
                                                        ing and analyzing the data of defected custom-
Campaign Analysis                                       ers, CSPs can understand the factors that influ-
CSPs apply huge amounts of resources to market-         enced these departures and take steps to prevent
ing their offerings across various channels. With       further churn.
the growing cost and complexity of marketing, it
is important that CSPs understand how effective         Social Network Analysis
their marketing campaigns are. Campaign analysis        Customers share varying degrees of relationships
can be used to study the efficacy of a marketing        with other members in a group. Social network
campaign in generating sales against the costs          analytics help in identifying proximities and rela-
incurred, based on key success criteria for a cam-      tionships between people, groups, organizations
paign through a channel. It is also useful for under-   and related systems. It reveals the strength of the
standing the impact on other related products           relationships, how information flows within the
and design efficient future campaigns. Real-time        groups and who the influencers are in the group.
campaign analysis allows marketers to measure           It is observed that influencers can cause mass
each and every aspect of a marketing campaign           churn within four to seven days of their move-
and take immediate corrective actions, resulting        ment to another service provider. By appeasing
in efficient utilization of budget and resources.       group influencers via customized and innovative
                                                        tariffs, CSPs can prevent mass churn and attract
Cross-Selling and Up-Selling                            new customers, including those from competi-
Affinity analytics or market-basket analytics           tors. Further, group influencers can be used to
enable CSPs to understand products that are             quickly spread the news about a new service or
often bought together. It also provides the right       a product.
combination of services for customers. By iden-
tifying customers who have not bought any of            Social Media Analytics
these services, CSPs can offer bundled services         Social networking sites have emerged as a major
(up-selling) or new services (cross-sell). This will    channel for customer engagement. Two out of
not only lead to improved customer spending             three people in the U.S. use social networking
(increased ARPUs), but it will also reduce cam-         sites; about 63.7% (147.8 million) of Internet users
paign costs, as the right customers are targeted.       are members of social networking sites, and that
                                                        number will increase to 67% by 2013, according
Churn Management                                        to eMarketer.
Retaining customers is a challenge, but not as
much as acquiring new ones. According to stud-          Tracking of social media (using tools such as
ies, acquiring new customers is five times more         text analytics) allows CSPs to understand cur-
expensive than retaining existing customers. High       rent customer sentiment and obtain a deeper
customer attrition affects profitability, especially    understanding of their products and services.




                                 cognizant reports      5
For example, by analyzing the chatter created on        traffic routing, free capacity can be identified and
social media about a new advertising campaign           used elsewhere, driving down Op-Ex.
or special offer, CSPs can know which features
the customers liked or disliked and, based on this      Network Monitoring
information, make adjustments to their offering.        In a hypercompetitive arena, providing uninter-
                                                        rupted connectivity is of paramount importance
                                                        to CSPs, and doing so requires providers to
Analytics for Efficient Network                         maintain network health, identify glitches that
Management                                              impact network performance and proactively
Network operating costs account for 45% of              address them.
CSPs’ total Op-Ex, which itself is about 50% of
revenues. But networks are utilized only at 30%         Network monitoring tools track network behavior
of their capacity, as traditional solutions employed    and help in identifying stress points before they
by CSPs provide limited insights into network uti-      impact the network and connectivity. Further,
lization, hindering their ability to utilize capacity   by conducting root cause analysis of past net-
optimally, according to Yankee Group. With the          work breakdowns using correlation techniques,
proliferation of smart devices driving the demand       future disturbances can be averted, resulting in
for more network bandwidth, CSPs need to not            improved quality of service.
only utilize their current network capacities more
efficiently but also predict future capacity addi-
tions accurately. Network analytics help address        Analytics for Revenue Assurance
capacity utilization issues and predict future          Fraud Management
requirements accurately, allowing CSPs to provi-        Global communications fraud — the practice
sion bandwidth more efficiently.                        of using telecommunications products or ser-
                                                        vices with no intention of paying, according to
Capacity Planning                                       the Communications Fraud Control Association2
The emergence of new technologies (3G, LTE,             — results in the loss of $72 billion to $80 billion
etc.) is driving the demand for more bandwidth,         (about 4.5% of revenues) annually. Fraud analyt-
as CSPs have to support wireless, VoIP, video,          ics tools use customer bill payment schedules,
high-speed data, a host of digital media applica-       demographic details, calling patterns and other
tions and other services across numerous con-           information to proactively identify customers
sumer and business devices. This requires CSPs          who are likely to exhibit fraudulent behavior. For
to invest in building new capacities. However, they     example, the tools generate alerts upon finding
must ensure not to overbuild, which would lead          a sudden abnormality in the usage or payment
to increased Cap-Ex and Op-Ex, nor under-build,         patterns of customers, which can be used to plan
which often leads to poor quality of service. CSPs      remedial measures.
should first understand their current network uti-
lization and then plan capacity expansion.              Customer Risk Management
                                                        Some customers may not be able to pay their bills,
Real-time network analytics allow CSPs to under-        resulting in bad debt. An increase in the number
stand current network usage — capacity utilized at      of such customers puts pressure on revenues and
various locations at different time periods — and       margins. CSPs need to be careful when imposing
identify regions where network usage is expected        credit limits, in order to minimize the impact on
to grow vis-à-vis others due to a new marketing         customers in good standing. Blanket policies can
campaign or a change in tariffs, among other            and often do negatively impact satisfaction levels.
influences. This allows CSPs to plan in advance         Analytics help identify risky accounts proactively
and provision the right amount of bandwidth at          and design less expensive tariffs, which lessen the
the right place and at the right time, leading to       burden on such customers without affecting CSP
cost savings. By combining this with dynamic            profitability. This will not only reduce potential
                                                        revenue loss but also improve customer retention.




                                 cognizant reports      6
Revenue Leakage

CSPs globally lose about $100 billion annually in revenue leakage, primarily due to inter-carrier settle-
ments, which is among the major revenue sources for some CSPs. According to Frost and Sullivan, inter-
carrier revenue leakage accounts for 3% to 5% of total costs for traditional voice products and 7% to
11% for broadband services.

Moreover, the increase in traffic, combined with the huge variety of services that CSPs provide, has
resulted in increased billing complexity. This, in turn, puts pressure on legacy systems when analyz-
ing huge volumes of call detail records (CDRs), hindering the accurate capture of relevant data that is
required to charge customers for their network usage.

Advanced analytics can be used to filter billions of CDRs quickly and efficiently, identify and plug
revenue leakage sources across the revenue chain and enable more accurate billing and inter-carrier
settlements.

Lastly, the benefits of customer and network analytics cannot be fully realized if internal processes
are not efficient. Often, there is a huge time lag between data capture, analysis and action, which costs
CSPs dearly. By measuring operational performance against key business drivers, process optimization
analytics help CSPs identify areas where capacity is unused or underutilized, or where changes in staff-
ing and budget can yield better results, etc. For instance, the sales department can check whether the
sales force assigned to a particular area is sufficient to handle the volumes and make changes to the
team if necessary.




Roadblocks                                             ment that can effectively deal with data overflow.
CSPs need to analyze huge volumes of data that         Efficient data management, combined with pow-
is generated continuously, such as CDR, SNMP           erful predictive and real-time analytics that con-
(Simple Network Management Protocol) and               sider customer, network and other critical aspects
IPDR (Internet Protocol Detail Record) data. With      of the business, can result in just-in-time under-
millions of subscribers utilizing a range of voice,    standing of operational issues, effective forecast-
video and data services, there has been an expo-       ing and more meaningful and timely decisions.
nential growth in such data. However, very little
has been done on the database management
front to handle such an explosion, putting pres-       Analytics for Competitive Advantage
sure on existing systems.                              Through the mid-2000s, analytics was synony-
                                                       mous with reporting. This has changed as data
Data at many CSPs typically resides in disparate       proliferated and competition grew, which is forc-
databases running on numerous independent              ing CSPs to adopt data-driven decision-making.
legacy systems, which often results in data incon-     Further, the rapid development of IT and the avail-
sistency. In this situation, even advanced analyt-     ability of industry-specific analytics are enabling
ics cannot aid in identifying problem areas or the     organizations to embrace analytics to make tacti-
root cause of a problem. It is, therefore, important   cal, operational and strategic decisions.
that data structures across the organization be
standardized and data issues resolved. Resolving       CSPs acknowledge the benefits of analytics. In
data issues forms 70% to 80% of the effort in          fact, the telecom industry leads many others in
implementing an analytics project, according to        the adoption of analytics (see Figure 5). CSPs are
research firm IDC.                                     in an enviable position when it comes to know-
                                                       ing their customers when compared with many
To leverage the benefits of analytics, CSPs need       other industries. However, the information is
to focus on new approaches to data manage-             not typically harnessed or used to inform more




                                 cognizant reports     7
proactive decision-making the way it should be.                     an inability to cope with today’s dynamic market
The existing analytics infrastructure (legacy sys-                  conditions. In an ultra-competitive era, future
tems) at a number of CSPs has resulted in huge                      success will depend on how effectively CSPs
storage and related infrastructure costs, long lead                 leverage analytics to exploit data and build sus-
times for loading data and running queries and                      tainable competitive advantage.


Analytics: An Industry Scorecard
Q: Has your organization implemented a business intelligence/analytics solution?

 Securities and investment                                                                                        87%
    Process manufacturing                                                                                     84%
                 Insurance                                                                                   83%
              Life sciences                                                                                  83%
Communication and media                                                                                     82%
            Transportation                                                                                  81%
              Government                                                                               79%
                   Banking                                                                             79%
   Discrete manufacturing                                                                              79%
                   Utilities                                                                           78%
                Oil and gas                                                                           77%
                Healthcare                                                                      70%
                     Retail                                                                     70%
      Professional services                                                                    68%
       Consumer products                                                                      66%
                 Education                                                         52%
                               0%              20%                40%                60%              80%               100%
                                                                         (% of respondents)
Source: IDC’s Vertical Research Survey, 2010
Base: 2,771 respondents
Figure 5



It is often debated whether analytics can provide                   Embracing Analytics as a Service
sustainable competitive advantage when the                          Telecom data is complex. Analytics, with its
technology can be easily replicated by the com-                     wide application and the ability to meet the
petition. While competitors can duplicate the data                  increasingly complex decision-making needs of
collection process and the kind of data collected,                  telecoms, will play a crucial role in address-
the key lies in how much more quickly and effec-                    ing the issues. However, handling such huge
tively the organization can gain unique insights                    volumes of data poses a significant chal-
into its subscriber base vis-à-vis the competition.                 lenge for telecommunications providers and
Further, applying analytics to improve operational                  requires them to invest in people, process,
efficiencies is unique to each CSP.                                 IT tools and infrastructure.

It is, therefore, important that analytics adop-                    A partner with the ability to handle complex ana-
tion be driven by top management and defined                        lytics tasks can help CSPs more quickly leverage
by specific goals, such as improving profitability                  the promise of advanced analytics. With virtual-
or reducing errors by a certain percentage. Top                     ization and cloud computing, opportunities now
management must focus on creating a strong                          exist for cost-cutting through an emerging ser-
organizational culture that emphasizes data-                        vice delivery model called business process as
driven decision-making. This can be achieved by                     a service (BPaaS).3 This approach makes avail-
closely aligning the business units with the teams                  able on-demand telecom analytics applications,
handling analytics, which creates a collaborative                   such as revenue assurance, fraud management
environment that can have a ripple effect across                    and customer experience management, which
the enterprise.                                                     can save critical Cap-Ex by eliminating the cost


                                        cognizant reports           8
of acquiring expensive hardware, software and                 that CSPs stand to benefit greatly by associating
key talent. Moreover, enterprises pay only for                with partners that have mature cloud computing
results achieved through outcomes-based and/or                capabilities.
pay-for-use fee models.
                                                              To realize the full potential of analytics services,
In this context, analytics are delivered as a knowl-          CSPs need to do the following:
edge process outsourcing (KPO) service, eliminat-
ing key technology barriers (continuous applica-                  Develop an enterprise-wide data architecture.
tion development, deployment and maintenance                      Identify key areas for deploying analytics.
issues), as well as talent-related obstacles that                 Design a comprehensive strategy for adoption
can often hinder performance. KPO allows CSPs                     and implementation of analytics, including
to deploy resources tailored to their needs that                  information technology.
can be increased or decreased as business                         Develop a fact-based decision-making culture
requirements dictate, providing Op-Ex flexibility.                focusing on achieving specific goals.
                                                                  Formulate customized strategies to capital-
When delivered as a service, analytics KPO                        ize on unique data, instead of copying the
presents options that are more extensive than                     competition.
traditional business process outsourcing (BPO),                   Continuously renovate and renew analytics
which focuses primarily on labor, cost arbi-                      implementation.
trage and continuous process improvement                          Enter into relationships with partners that are
to elevate business performance. As analyt-                       capable of providing mature analytics services
ics processes become standardized and can                         to aid in their attempts to gain competitive
be uniformly delivered via the cloud, we believe                  advantage.



Footnotes
1
    Wireless ARPU decreased $0.46 in 2010. While data ARPU increased by $2.37, voice ARPU fell by $2.86 per user.

2
    The Communications Fraud Control Association (CFCA), headquartered in Roseland, N.J., is a not-for-profit
    global educational association that is working to combat communications fraud. The global fraud loss figures cited
    are based on the initial results of a CFCA survey conducted in 2009. The figures represent a 34% increase over
    2005 survey results.

3
    BPaaS refers to the provision of business services encompassing underlying IT infrastructure, platform and skilled
    manpower to run specific business processes in a virtual, globalized and distributed operating model.




References
Swati Sinha, “Improve Customer Retention with CRM Analytics,” The Decision Factor, June 28, 2011.

Kalyan Hariharan, “Revenue Assurance – Why This is a Critical Function in a Telecommunication
Industry,” India Telecom Online, May 12, 2011.

Eric Chan, “Five Ways to Win Back the Voice Market,” Wireless Week, April 26, 2011.

“Decision Analytics for Operational Excellence,” TM Forum, March 31, 2011.

Ari Banerjee, “BI Critical for Network Planning,” Telecomasia.net, March 21, 2011.

Michael S. Hopkins, “Interview: What’s IT’s Role in Analytics Adoption?” MIT Sloan Management Review,
Jan. 12, 2011.

“Big Data Integration Solutions: Turbocharge Analytics with Data Virtualization,” Composite
Software, 2011.




                                     cognizant reports        9
“TIA 2011 Playbook,” Telecommunications Industry Association, 2011.

“Using Data as a Hidden Asset,” Bain & Co., August 16, 2010.

R. Venkateswaran, “Innovative uses of Analytics in Telecom,” B-eyeNetwork, September 28, 2010.

Henry D. Morris, “Business Analytics and the Path to Better Decisions,” IDC, September 2010.

“Exploiting Analytics,” TM Forum Research Insights, September 2010.

Olivier Serrat, “Social Network Analysis,” Asian Development Bank, February 2009.

Arindam Banerjee, “Communication Service Providers Must Adopt a Customer-Centric Service
Assurance Strategy,” Yankee Group, May 2009.

“Business Intelligence for the Telecommunications Industry: Improving the Bottom Line and Controlling
Expenses,” Ingress.com, 2008.

“Business Analytics: Six Questions to Ask About Information and Competition,” nGenera Corp., 2008.

“Beyond Commoditization: The Way Forward for Traditional Telecom Operators,” www.booz.com,
August 27, 2007.

 “Telecom – Marketing Analytics,” dnbtransunion.com.




Author                                                                             Subject Matter Expert
Vinaya Kumar Mylavarapu                                                            Jayendra Ramesan
Cognizant Research Center                                                          Director and Practice Leader
                                                                                   Cognizant Enterprise Analytics Practice




About Cognizant

Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-
sourcing services. Cognizant’s single-minded passion is to dedicate our global technology and innovation know-how,
our industry expertise and worldwide resources to working together with clients to make their businesses stronger.
With over 50 global delivery centers and more than 118,000 employees as of June 30, 2011, we combine a unique
global delivery model infused with a distinct culture of customer satisfaction. A member of the NASDAQ-100 Index
and S&P 500 Index, Cognizant is a Forbes Global 2000 company and a member of the Fortune 1000 and is ranked
among the top information technology companies in BusinessWeek’s Hot Growth and Top 50 Performers listings.

Visit us online at www.cognizant.com for more information.


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                                         Teaneck, NJ 07666 USA               28-29 Haymarket                       Okkiyam Pettai, Thoraipakkam
                                         Phone: +1 201 801 0233              London SW1Y 4SP UK                    Chennai, 600 096 India
                                         Fax: +1 201 801 0243                Phone: +44 (0) 20 7321 4888           Phone: +91 (0) 44 4209 6000
                                         Toll Free: +1 888 937 3277          Fax: +44 (0) 20 7321 4890             Fax: +91 (0) 44 4209 6060
                                         Email: inquiry@cognizant.com        Email: infouk@cognizant.com           Email: inquiryindia@cognizant.com


© Copyright 2011, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is
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How U.S. Telecoms Can More Effectively Convert Data to Foresight

  • 1. Cognizant Reports How U.S. Telecoms Can More Effectively Convert Data to Foresight Executive Summary a more programmatic use of advanced analytics The business environment has never been more to provide superior customer service, resulting challenging for communication services providers in improved customer retention. This requires (CSPs). Buffeted by a growing threat from non-tra- the backing of the organization’s leaders and a ditional players, pressure to reduce costs, drifting cultural shift toward fact-based decision-making. customer loyalties and a dynamic technological As part of the due diligence process, CSPs should landscape, they must also deal with the perennial consider working with partners capable of provid- issues of billing abnormalities, subscriber churn, ing analytics as a service, which not only delivers revenue leakage and call failures, among other cost advantages but also leverages experts who issues. Above all, intense competition has CSPs can jump-start the process and accelerate time venturing outside their comfort zones to improve to value. customer experience and avoid being outmaneu- vered by competitors. Driving Forces CSPs are banking on the customer data gener- CSPs operate in an increasingly tough environ- ated by operational systems day-in, day-out to ment. The industry is characterized by intense provide valuable insights about their custom- competition, a growing threat from non-tradi- ers’ tastes and preferences. However, this data is tional competitors, a rapidly changing technologi- complex and runs into terabytes, putting intense cal landscape and increasing customer demands pressure on existing systems and processes. (see Figure 1, next page). Among the challenges: The end result: CSPs often have little or no clue The U.S. market is highly competitive, with about their customers’ actual requirements. With CSPs vying for customer affection by offer- increasing customer demands and the availability ing services at competitive prices, resulting of facilities that provide easy movement to the in reduced margins. Average revenue per competition, CSPs need to undertake proactive user (ARPU) from traditional voice services is measures to minimize customer attrition. steadily declining, countervailing the increase in data ARPU1 (see Figure 2, next page). Advanced analytical solutions can help CSPs The rise of over-the-top (OTT) players such as understand and predict customer behavior and Google, Yahoo and Skype, which use CSP net- make quick and effective decisions. Combined works to provide voice, video, messaging and with network analytics, which help in utilizing other services freely to consumers, directly networks more efficiently, CSPs can benefit from impacts CSP revenues. cognizant reports | september 2011
  • 2. CSP Challenges Intensifying competition 57% Efficiency improvements 40% Growing customer expectations 37% Reduced time-to-market 30% Reducing complexity of the company's structure 30% Keeping pace with new technology trends 20% Sustaining profitable growth 20% Network congestion 13% Dealing with regulatory issues 7% 0% 10% 20% 30% 40% 50% 60% Source: Frost & Sullivan Figure 1 Average Revenue Per User Deep-Dive $60 $50 $40 $30 $20 Q2 2013 $10 $0 Q310 Q304 Q105 Q205 Q305 Q405 Q106 Q406 Q207 Q307 Q407 Q108 Q308 Q408 Q109 Q209 Q409 Q110 Q210 Q410 Q111 Q404 Q206 Q306 Q107 Q208 Q309 Data ARPU Voice ARPU Linear Data ARPU Linear Voice ARPU Source: “U.S. Wireless Data Market, Q1 2011 Update,” Chetan Sharma Consulting Figure 2 CSPs must keep pace with growing technol- Following the global downturn, CSPs have ogy complexity and equip themselves to meet been under immense pressure to improve the growing demands of their subscribers. operational efficiencies and cut costs, while The convergence of IT, telecom and media has ensuring quality of service. led to the development of new products (e.g., smartphones, tablets, etc.) that are driving In addition, CSPs must regularly contend with demand for both data and personalized ser- maintaining customer loyalty, a challenge made vices. For instance, data will account for 51% more difficult with the introduction of portable of overall wireless spending by 2014, accord- mobile numbers. Other challenges include billing ing to the Telecom Industry Association (see abnormalities, revenue leakage and call failure, Figure 3, next page). This requires CSPs to plan among other issues, which need to be addressed to and invest in infrastructure to accommodate protect revenues. Under pressure to improve prof- increased demand for network bandwidth. itability and quality of service, CSPs have placed cognizant reports 2
  • 3. Traffic Growth 4,000 3,500 3,000 Percent 2,500 2,000 1,500 1,000 500 0 2009 2010 2011 2012 2013 2014 Average Data Growth Traffic Growth per Site* Tech-Adjusted Traffic per Site** Source: “TIA 2011 Playbook,” Telecommunications Industry Association, and “FCC Report – Mobile Broadband: The Benefits of Additional Spectrum,” October 2010. * Data demand adjusted for additional cell sites. ** Data demand adjusted for special efficiency improvements. Figure 3 renewed focus on customer retention and, along bottlenecks, address capacity concerns and uti- with it, the tools to improve customer service. lize network infrastructure intelligently. Further, by deploying analytics to streamline business operations, CSPs can reap sustainable efficien- Customer-Centricity Imperative cies, which could prove to be a game-changer. According to a Bain & Co. study, a 5% increase in customer retention can improve profitability by 75% for a company across many industries. Analytics for Improved Customer With traditional communications services being Relationship Management increasingly commoditized by the emergence of Building long-term profitable relationships with IP-based networks, CSPs have put greater empha- customers is the key for any organization. Consid- sis on improving the customer experience in a ering CSPs’ huge, diversified customer bases, with bid to extend customer retention. Achieving this their varying service requirements, customer rela- requires a greater understanding of customer tionship management becomes an arduous task. behavior and needs, as well as superior service. Prohibitively high customer churn rates in the The good news is that CSPs already possess rich early 2000s forced CSPs to invest significantly and abundant customer data. Leveraging this in CRM systems, with the hope of achieving radi- data through advanced analytics will enable CSPs cal improvements in customer relationships and to develop deeper insights into customer usage profitability. However, a majority of these CRM and preferences, predict their future require- initiatives failed to realize their full potential, as ments and make more effective business deci- CSPs struggled to mine the insights contained sions. CSPs should also ensure that customers within these systems. are connected and have access to persistent ser- vices around-the-clock, which requires efficient Merely collecting customer information through network capabilities. CRM systems does not aid in decision-making. Consolidating and analyzing data related to sales, Networks are the key to CSPs’ business strategy, marketing and service provides deep insights into and their performance is vital to customer satis- what customers want. Analytics provide CSPs faction. That’s why CSPs focus on network health with the power to analyze enterprise-wide data as their top priority in order to avoid sudden and make effective tactical decisions that can outages. Network analytics allow CSPs to con- improve customer satisfaction at various stages tinuously monitor network performance, identify of the customer relationship, from acquisition, cognizant reports 3
  • 4. to improving customer spend and retention. If Further, marketers can identify prospective cus- properly configured, CRM systems provide a tomers, predict customer needs in advance, 360-degree view of customers and enable differ- design targeted marketing campaigns and pro- ent groups in an organization to leverage a single vide customized services, which will improve cus- version of the truth. tomer experience, ultimately increasing customer loyalty and profitability (see Figure 4). Embedding Analytics Across the Customer Lifecycle Prospecting and Growth Manage Retain Acquisition Customer Social Media Profitability Customer Analytics Analytics Segmentation Churn Analysis Social Network Customer Product Customer Risk Analysis Lifetime Value Affinity Analytics Analysis Analytics Tariff Modeling Identify Uncover Develop Develop a profitable up-sell and personalized robust customer customers cross-sell offerings retention strategy opportunities Source: Cognizant Research Center Figure 4 Customer Lifetime Value profitable customers and retaining them is impor- Customer lifetime value (CLV) is the profit or loss tant to sustain and also gain referrals. generated by a customer during a business rela- tionship. It reveals how much a new customer Customer profitability analytics allow CSPs to is worth based on specific inputs — for example, determine who their most profitable customers how long the customer will stay with a company are by comparing the revenues generated from (estimated value), a customer’s purchase behav- these customers with the cost of providing ser- ior and profitability. Based on the CLV, the CSP’s vices to them during a particular period. This is marketing departments can decide how much useful for understanding what causes the lack of can be spent on acquiring a particular customer profitability of some customers, as well as how to type. By calculating segment-wise CLV, CSPs convert them into more profitable ones by devel- can understand which segments provide better oping new products or tweaking existing ones and opportunities and direct their customer acqui- developing targeted marketing campaigns. sition and retention strategies. For instance, CSPs can focus on providing better services to Targeted Marketing Campaigns a few high-value (post-paid) customers vs. many Competitors’ marketing campaigns are one of the less-valuable customers, although the latter could prime factors for customer defection. It is, there- be targeted later to buy more services. fore, important to consistently engage customers with timely and relevant marketing campaigns. Customer Profitability Analytics Based on the Pareto Principle — which states The first step is to break down complex customer that 80% of a company’s revenues is derived data. By analyzing customer calling patterns — from 20% of customers — identifying the most including the operator services they use, their cognizant reports 4
  • 5. demographics and other personal information — in the case of new customers from whom the the subscriber base can be divided into segments company is yet to gain return on investment. based on behavioral patterns. Such segmentation allows CSPs to understand issues unique to each Customers depart for a number of reasons, rang- group and address the group as a whole. ing from poor customer service and inappropri- ate billing, to lucrative offers from competitors. Customer segmentation analysis allows CSPs New offerings such as mobile number portability to design marketing campaigns tailor-made have eased defection to a competitor’s service, to addressing the needs of each segment. For making it possible to complete the move in a mat- example, high-value customers who account for ter of hours. It is, therefore, important for CSPs a major chunk of revenues or consume higher to understand the current level of satisfaction of profit services can be offered special tariffs and their customers and identify in advance custom- other services that incent them to stay longer ers who are most likely to switch loyalties. without compromising profitability. Further, pre- dictive analytics can be used to understand which Churn management solutions, including social customer segment is most likely to buy a product network analysis, allow organizations to iden- and during which period, resulting in better ROI tify customers who are most likely to defect for campaigns. based on their behavior. Further, by combin- ing and analyzing the data of defected custom- Campaign Analysis ers, CSPs can understand the factors that influ- CSPs apply huge amounts of resources to market- enced these departures and take steps to prevent ing their offerings across various channels. With further churn. the growing cost and complexity of marketing, it is important that CSPs understand how effective Social Network Analysis their marketing campaigns are. Campaign analysis Customers share varying degrees of relationships can be used to study the efficacy of a marketing with other members in a group. Social network campaign in generating sales against the costs analytics help in identifying proximities and rela- incurred, based on key success criteria for a cam- tionships between people, groups, organizations paign through a channel. It is also useful for under- and related systems. It reveals the strength of the standing the impact on other related products relationships, how information flows within the and design efficient future campaigns. Real-time groups and who the influencers are in the group. campaign analysis allows marketers to measure It is observed that influencers can cause mass each and every aspect of a marketing campaign churn within four to seven days of their move- and take immediate corrective actions, resulting ment to another service provider. By appeasing in efficient utilization of budget and resources. group influencers via customized and innovative tariffs, CSPs can prevent mass churn and attract Cross-Selling and Up-Selling new customers, including those from competi- Affinity analytics or market-basket analytics tors. Further, group influencers can be used to enable CSPs to understand products that are quickly spread the news about a new service or often bought together. It also provides the right a product. combination of services for customers. By iden- tifying customers who have not bought any of Social Media Analytics these services, CSPs can offer bundled services Social networking sites have emerged as a major (up-selling) or new services (cross-sell). This will channel for customer engagement. Two out of not only lead to improved customer spending three people in the U.S. use social networking (increased ARPUs), but it will also reduce cam- sites; about 63.7% (147.8 million) of Internet users paign costs, as the right customers are targeted. are members of social networking sites, and that number will increase to 67% by 2013, according Churn Management to eMarketer. Retaining customers is a challenge, but not as much as acquiring new ones. According to stud- Tracking of social media (using tools such as ies, acquiring new customers is five times more text analytics) allows CSPs to understand cur- expensive than retaining existing customers. High rent customer sentiment and obtain a deeper customer attrition affects profitability, especially understanding of their products and services. cognizant reports 5
  • 6. For example, by analyzing the chatter created on traffic routing, free capacity can be identified and social media about a new advertising campaign used elsewhere, driving down Op-Ex. or special offer, CSPs can know which features the customers liked or disliked and, based on this Network Monitoring information, make adjustments to their offering. In a hypercompetitive arena, providing uninter- rupted connectivity is of paramount importance to CSPs, and doing so requires providers to Analytics for Efficient Network maintain network health, identify glitches that Management impact network performance and proactively Network operating costs account for 45% of address them. CSPs’ total Op-Ex, which itself is about 50% of revenues. But networks are utilized only at 30% Network monitoring tools track network behavior of their capacity, as traditional solutions employed and help in identifying stress points before they by CSPs provide limited insights into network uti- impact the network and connectivity. Further, lization, hindering their ability to utilize capacity by conducting root cause analysis of past net- optimally, according to Yankee Group. With the work breakdowns using correlation techniques, proliferation of smart devices driving the demand future disturbances can be averted, resulting in for more network bandwidth, CSPs need to not improved quality of service. only utilize their current network capacities more efficiently but also predict future capacity addi- tions accurately. Network analytics help address Analytics for Revenue Assurance capacity utilization issues and predict future Fraud Management requirements accurately, allowing CSPs to provi- Global communications fraud — the practice sion bandwidth more efficiently. of using telecommunications products or ser- vices with no intention of paying, according to Capacity Planning the Communications Fraud Control Association2 The emergence of new technologies (3G, LTE, — results in the loss of $72 billion to $80 billion etc.) is driving the demand for more bandwidth, (about 4.5% of revenues) annually. Fraud analyt- as CSPs have to support wireless, VoIP, video, ics tools use customer bill payment schedules, high-speed data, a host of digital media applica- demographic details, calling patterns and other tions and other services across numerous con- information to proactively identify customers sumer and business devices. This requires CSPs who are likely to exhibit fraudulent behavior. For to invest in building new capacities. However, they example, the tools generate alerts upon finding must ensure not to overbuild, which would lead a sudden abnormality in the usage or payment to increased Cap-Ex and Op-Ex, nor under-build, patterns of customers, which can be used to plan which often leads to poor quality of service. CSPs remedial measures. should first understand their current network uti- lization and then plan capacity expansion. Customer Risk Management Some customers may not be able to pay their bills, Real-time network analytics allow CSPs to under- resulting in bad debt. An increase in the number stand current network usage — capacity utilized at of such customers puts pressure on revenues and various locations at different time periods — and margins. CSPs need to be careful when imposing identify regions where network usage is expected credit limits, in order to minimize the impact on to grow vis-à-vis others due to a new marketing customers in good standing. Blanket policies can campaign or a change in tariffs, among other and often do negatively impact satisfaction levels. influences. This allows CSPs to plan in advance Analytics help identify risky accounts proactively and provision the right amount of bandwidth at and design less expensive tariffs, which lessen the the right place and at the right time, leading to burden on such customers without affecting CSP cost savings. By combining this with dynamic profitability. This will not only reduce potential revenue loss but also improve customer retention. cognizant reports 6
  • 7. Revenue Leakage CSPs globally lose about $100 billion annually in revenue leakage, primarily due to inter-carrier settle- ments, which is among the major revenue sources for some CSPs. According to Frost and Sullivan, inter- carrier revenue leakage accounts for 3% to 5% of total costs for traditional voice products and 7% to 11% for broadband services. Moreover, the increase in traffic, combined with the huge variety of services that CSPs provide, has resulted in increased billing complexity. This, in turn, puts pressure on legacy systems when analyz- ing huge volumes of call detail records (CDRs), hindering the accurate capture of relevant data that is required to charge customers for their network usage. Advanced analytics can be used to filter billions of CDRs quickly and efficiently, identify and plug revenue leakage sources across the revenue chain and enable more accurate billing and inter-carrier settlements. Lastly, the benefits of customer and network analytics cannot be fully realized if internal processes are not efficient. Often, there is a huge time lag between data capture, analysis and action, which costs CSPs dearly. By measuring operational performance against key business drivers, process optimization analytics help CSPs identify areas where capacity is unused or underutilized, or where changes in staff- ing and budget can yield better results, etc. For instance, the sales department can check whether the sales force assigned to a particular area is sufficient to handle the volumes and make changes to the team if necessary. Roadblocks ment that can effectively deal with data overflow. CSPs need to analyze huge volumes of data that Efficient data management, combined with pow- is generated continuously, such as CDR, SNMP erful predictive and real-time analytics that con- (Simple Network Management Protocol) and sider customer, network and other critical aspects IPDR (Internet Protocol Detail Record) data. With of the business, can result in just-in-time under- millions of subscribers utilizing a range of voice, standing of operational issues, effective forecast- video and data services, there has been an expo- ing and more meaningful and timely decisions. nential growth in such data. However, very little has been done on the database management front to handle such an explosion, putting pres- Analytics for Competitive Advantage sure on existing systems. Through the mid-2000s, analytics was synony- mous with reporting. This has changed as data Data at many CSPs typically resides in disparate proliferated and competition grew, which is forc- databases running on numerous independent ing CSPs to adopt data-driven decision-making. legacy systems, which often results in data incon- Further, the rapid development of IT and the avail- sistency. In this situation, even advanced analyt- ability of industry-specific analytics are enabling ics cannot aid in identifying problem areas or the organizations to embrace analytics to make tacti- root cause of a problem. It is, therefore, important cal, operational and strategic decisions. that data structures across the organization be standardized and data issues resolved. Resolving CSPs acknowledge the benefits of analytics. In data issues forms 70% to 80% of the effort in fact, the telecom industry leads many others in implementing an analytics project, according to the adoption of analytics (see Figure 5). CSPs are research firm IDC. in an enviable position when it comes to know- ing their customers when compared with many To leverage the benefits of analytics, CSPs need other industries. However, the information is to focus on new approaches to data manage- not typically harnessed or used to inform more cognizant reports 7
  • 8. proactive decision-making the way it should be. an inability to cope with today’s dynamic market The existing analytics infrastructure (legacy sys- conditions. In an ultra-competitive era, future tems) at a number of CSPs has resulted in huge success will depend on how effectively CSPs storage and related infrastructure costs, long lead leverage analytics to exploit data and build sus- times for loading data and running queries and tainable competitive advantage. Analytics: An Industry Scorecard Q: Has your organization implemented a business intelligence/analytics solution? Securities and investment 87% Process manufacturing 84% Insurance 83% Life sciences 83% Communication and media 82% Transportation 81% Government 79% Banking 79% Discrete manufacturing 79% Utilities 78% Oil and gas 77% Healthcare 70% Retail 70% Professional services 68% Consumer products 66% Education 52% 0% 20% 40% 60% 80% 100% (% of respondents) Source: IDC’s Vertical Research Survey, 2010 Base: 2,771 respondents Figure 5 It is often debated whether analytics can provide Embracing Analytics as a Service sustainable competitive advantage when the Telecom data is complex. Analytics, with its technology can be easily replicated by the com- wide application and the ability to meet the petition. While competitors can duplicate the data increasingly complex decision-making needs of collection process and the kind of data collected, telecoms, will play a crucial role in address- the key lies in how much more quickly and effec- ing the issues. However, handling such huge tively the organization can gain unique insights volumes of data poses a significant chal- into its subscriber base vis-à-vis the competition. lenge for telecommunications providers and Further, applying analytics to improve operational requires them to invest in people, process, efficiencies is unique to each CSP. IT tools and infrastructure. It is, therefore, important that analytics adop- A partner with the ability to handle complex ana- tion be driven by top management and defined lytics tasks can help CSPs more quickly leverage by specific goals, such as improving profitability the promise of advanced analytics. With virtual- or reducing errors by a certain percentage. Top ization and cloud computing, opportunities now management must focus on creating a strong exist for cost-cutting through an emerging ser- organizational culture that emphasizes data- vice delivery model called business process as driven decision-making. This can be achieved by a service (BPaaS).3 This approach makes avail- closely aligning the business units with the teams able on-demand telecom analytics applications, handling analytics, which creates a collaborative such as revenue assurance, fraud management environment that can have a ripple effect across and customer experience management, which the enterprise. can save critical Cap-Ex by eliminating the cost cognizant reports 8
  • 9. of acquiring expensive hardware, software and that CSPs stand to benefit greatly by associating key talent. Moreover, enterprises pay only for with partners that have mature cloud computing results achieved through outcomes-based and/or capabilities. pay-for-use fee models. To realize the full potential of analytics services, In this context, analytics are delivered as a knowl- CSPs need to do the following: edge process outsourcing (KPO) service, eliminat- ing key technology barriers (continuous applica- Develop an enterprise-wide data architecture. tion development, deployment and maintenance Identify key areas for deploying analytics. issues), as well as talent-related obstacles that Design a comprehensive strategy for adoption can often hinder performance. KPO allows CSPs and implementation of analytics, including to deploy resources tailored to their needs that information technology. can be increased or decreased as business Develop a fact-based decision-making culture requirements dictate, providing Op-Ex flexibility. focusing on achieving specific goals. Formulate customized strategies to capital- When delivered as a service, analytics KPO ize on unique data, instead of copying the presents options that are more extensive than competition. traditional business process outsourcing (BPO), Continuously renovate and renew analytics which focuses primarily on labor, cost arbi- implementation. trage and continuous process improvement Enter into relationships with partners that are to elevate business performance. As analyt- capable of providing mature analytics services ics processes become standardized and can to aid in their attempts to gain competitive be uniformly delivered via the cloud, we believe advantage. Footnotes 1 Wireless ARPU decreased $0.46 in 2010. While data ARPU increased by $2.37, voice ARPU fell by $2.86 per user. 2 The Communications Fraud Control Association (CFCA), headquartered in Roseland, N.J., is a not-for-profit global educational association that is working to combat communications fraud. The global fraud loss figures cited are based on the initial results of a CFCA survey conducted in 2009. The figures represent a 34% increase over 2005 survey results. 3 BPaaS refers to the provision of business services encompassing underlying IT infrastructure, platform and skilled manpower to run specific business processes in a virtual, globalized and distributed operating model. References Swati Sinha, “Improve Customer Retention with CRM Analytics,” The Decision Factor, June 28, 2011. Kalyan Hariharan, “Revenue Assurance – Why This is a Critical Function in a Telecommunication Industry,” India Telecom Online, May 12, 2011. Eric Chan, “Five Ways to Win Back the Voice Market,” Wireless Week, April 26, 2011. “Decision Analytics for Operational Excellence,” TM Forum, March 31, 2011. Ari Banerjee, “BI Critical for Network Planning,” Telecomasia.net, March 21, 2011. Michael S. Hopkins, “Interview: What’s IT’s Role in Analytics Adoption?” MIT Sloan Management Review, Jan. 12, 2011. “Big Data Integration Solutions: Turbocharge Analytics with Data Virtualization,” Composite Software, 2011. cognizant reports 9
  • 10. “TIA 2011 Playbook,” Telecommunications Industry Association, 2011. “Using Data as a Hidden Asset,” Bain & Co., August 16, 2010. R. Venkateswaran, “Innovative uses of Analytics in Telecom,” B-eyeNetwork, September 28, 2010. Henry D. Morris, “Business Analytics and the Path to Better Decisions,” IDC, September 2010. “Exploiting Analytics,” TM Forum Research Insights, September 2010. Olivier Serrat, “Social Network Analysis,” Asian Development Bank, February 2009. Arindam Banerjee, “Communication Service Providers Must Adopt a Customer-Centric Service Assurance Strategy,” Yankee Group, May 2009. “Business Intelligence for the Telecommunications Industry: Improving the Bottom Line and Controlling Expenses,” Ingress.com, 2008. “Business Analytics: Six Questions to Ask About Information and Competition,” nGenera Corp., 2008. “Beyond Commoditization: The Way Forward for Traditional Telecom Operators,” www.booz.com, August 27, 2007. “Telecom – Marketing Analytics,” dnbtransunion.com. Author Subject Matter Expert Vinaya Kumar Mylavarapu Jayendra Ramesan Cognizant Research Center Director and Practice Leader Cognizant Enterprise Analytics Practice About Cognizant Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out- sourcing services. Cognizant’s single-minded passion is to dedicate our global technology and innovation know-how, our industry expertise and worldwide resources to working together with clients to make their businesses stronger. With over 50 global delivery centers and more than 118,000 employees as of June 30, 2011, we combine a unique global delivery model infused with a distinct culture of customer satisfaction. A member of the NASDAQ-100 Index and S&P 500 Index, Cognizant is a Forbes Global 2000 company and a member of the Fortune 1000 and is ranked among the top information technology companies in BusinessWeek’s Hot Growth and Top 50 Performers listings. Visit us online at www.cognizant.com for more information. World Headquarters European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. Haymarket House #5/535, Old Mahabalipuram Road Teaneck, NJ 07666 USA 28-29 Haymarket Okkiyam Pettai, Thoraipakkam Phone: +1 201 801 0233 London SW1Y 4SP UK Chennai, 600 096 India Fax: +1 201 801 0243 Phone: +44 (0) 20 7321 4888 Phone: +91 (0) 44 4209 6000 Toll Free: +1 888 937 3277 Fax: +44 (0) 20 7321 4890 Fax: +91 (0) 44 4209 6060 Email: inquiry@cognizant.com Email: infouk@cognizant.com Email: inquiryindia@cognizant.com © Copyright 2011, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.