Few industries collect as much data about their services and customers as the telecommunications industry. But effective data collection doesn't always translate into using data strategically.
To learn more about how telecom companies are leveraging their massive amounts of data, Satori contacted Al Moreno, partner and principal at Sincecon LLC. For more than 30 years, Moreno has worked as an IT consultant specializing in data warehousing and business intelligence. His experience with telecommunications companies began in the 1980s, when deregulation was just beginning. He advised Telefonica, Spain's national phone company, when it was deregulating and trying to enter the mobile phone business. He's also consulted for AT&T and Verizon.
Q: Telecommunications companies have some of the largest databases in the world. How do they use that data to improve their businesses?
A: They use it in several ways. They use it to retain customers and sell them new services. For example, they have tried to take information from consumer complaints and match it up with information on which customers are coming up for renewal of mobile phone service plans. In that way they can build a model that predicts which customers are likely to drop their service and why. [Telecoms] can also track what kind of services individual customers use. Then they can populate their call centers with pre-emptive strikes. When they see that a customer's contract is about to expire, they approach those customers with special deals customized to their needs and preferences. They can also combine their data with data from other sources to look for demographic trends and spot opportunities for new customers. For example, if the company knows that a household has an 18-year-old teenager, they could approach that customer with a cell-phone plan tailored to a kid going away to college. Also, many of the telecoms are now offering triple-play services. Their data can help them know which customers are good targets for bundled services of phone, Internet and TV.
In operations, telecom companies use data to identify peak calling times. They can see which parts of their network are handling the most traffic. And that helps them plan how to expand their network and/or build alternative routes.
Q: Can you give us an example of a telecom company that uses data really well?
A: Honestly, they all are struggling. The problem is that the amount of data they collect is so massive. To do these predictive databases, you need more and more data: the more data you have, the more accurate your predictions are likely to be. But it's a real challenge to process it in a timely fashion and come up with answers, like putting relevant information up on a screen for customer service reps so they can do cross-selling.
Q: Do you have any examples of companies in any industry that are managing their data in new and innovative ways?
A: I know of one consumer-electronics company that is using information from customer complaints and returns to fine-tune its manufacturing. The company tracks product returns, and if the return was due to product failure, it collects details on what component caused the failure. That information is then used to adjust procedures during manufacturing to reduce the failure rates of those components.
Q: What advice would you offer companies that are trying to manage their data better?
A: You need to categorize and prioritize information in a manner that the information is usable. A recommended solution is to create more data marts that are subject specific rather than creating one huge warehouse with all of the information in it. Also, you need to plan and build data models that are dynamic enough to grow with the business and that are extendible. The goal is being able to create sources of information rich enough to be useful but also manageable, so you can get answers from it in a reasonable amount of time while at the same time managing expenses. Enterprises need to look at all possible solutions to determine what the best fit is for their business goals.
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