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What Your Competitors Are Already Doing with Big Data



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What Your Competitors Are Already Doing with Big Data

  1. 1. State of the industry Insight into what your competitors are already doing with Big Data
  2. 2. 2 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. BCG: Thought leader on data and information
  3. 3. 3 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Your speaker: BCG expert for information management, business intelligence & big data Work experience • The Boston Consulting Group GmbH (current) Principal, European IT Office • Kabel Deutschland GmbH (06–12) Head of Management Information, before: Head of Business Intelligence • Solon Management Consulting GmbH (01–06) Manager • Roland Berger & Partner (94-95): Freelancer Background and education • Diploma in Business computer science • PhD in economics Dr. Erik Lenhard Source: The Boston Consulting Group
  4. 4. 4 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Agenda Big data The big data opportunity for telco operators Big data challenges for telco operators
  5. 5. 5 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. What is Big Data? Structured Unstructured Volume Amount of data Giga ZetaTera Peta Exa Variety Range of data types/ sources Single ManyFew Velocity Speed of data, I/O Static Real-timeBatch "Big data is the ability to process and analyze large amounts of varied data and data sources together to generate actionable business insights" "Data that surpass the size that can be stored/managed/ analyzed with general database SW" "Big Data is a next-generation technology and architecture designed to support rapid collection, discovery and analysis to enable value creation with low cost from multiple, massive data sources" Big data attributes Big data definition BCG definition of big data
  6. 6. 6 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Big data enabled by five 'Digital Economy' drivers Mobile Social Cloud Internet of things Internet Five 'Digital Economy' drivers... ...Causing important shifts in digital ecosystem... ...And enabling a world with truly Big Data • ~80% Internet penetration in developed markets • ~2B Internet users globally by 2015 • 1.3B mobile phones shipped globally in 2010, 250M smart phones • 17.7B app store downloads, >$15B app store revenue in 2011 • 6.5B mobile connections, 90% mobile penetration rate by 2015 • >1 billion Facebook users with avg. 130 friends • 7B pieces of content (links, news, posts, etc.) shared each week • It would take 1,000 years to watch every video on YouTube • By 2013, 60% of server workloads will be virtualized • Amazon cloud houses >260B objects, handles 200K req/sec. • Netflix takes ~ 20% of total US web bandwidth from 8-10 p.m. • Over one trillion connected devices by 2015 • 1,200% increase in scanning of QR codes from July- Dec 2010 • 30% of mobile data subs. to use augmented reality weekly by 2012 Personal data (contents) Location data Social data Behavioral data Contextual data Transaction data facebook twitter YouTube iPhone
  7. 7. 7 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Big data management The key is to turn Big Data into actionable information Mining Analytics Search Enrichment Big data consumption Big data production RDBMS Analytical DB NoSQL DB ERP/CRM SaaS Social media Web analytics Log files RFID Call data records Sensors Machine - Generated Big data integration Big data quality Storage Processing Filtering Source: BCG Analysis Generation UsageOperational IT Analytics Infrastructure Processes People Information
  8. 8. 8 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Agenda Big data The big data opportunity for telco operators Big data challenges for telco operators
  9. 9. 9 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Telcos possess more valuable user data Telcos with more complete user data than OTT players Telcos in better position to trace users than OTT players Few pieces of digital information on characteristics, attributes and preferences Digital identity covers a wide range of characteristics, attributes and preferences Person is just a number, no addressing possible Person can be addressed in some way (e.g. through snail mail) Person can be addressed immediately (e.g. Google ads) Traceability ? Source: BCG Analysis Telcos Telcos YouTube Google Mail twitter Linked in facebook Google Mail facebook
  10. 10. 10 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Framework for structuring the value of big data helps to identify four distinct data business cases ARPU ACPU 1 2 3 4 1 2 3 4 Generate new revenue streams by new business models Manage costs by process optimizations Optimize subscriber base by base management Lift ARPU by up- and cross-sell #customers Total revenue Total costs Basic Telco revenue / cost framework Data business cases
  11. 11. 11 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Each business case with own characteristics on how to extract data value Up- and cross- sell Use micro-segmented sales and marketing approaches based on internal and external data • e.g. micro-targeted up-selling, pattern- based offerings, pre- paid billing reminders Base management Analyze and predict customer behavior and align customer management • e.g. preventive churn management and winbacks Process optimizations Use real-time data and advanced analytics to improve decision making and optimize processes • e.g. real-time fraud detection, preventive netw. fault management New business models Leverage differentiation potential to escape commoditization • e.g. move from standard offerings / products to targeted services Tap new revenue streams • e.g. data brokerage, real-time advertising, mobile insurance 1 2 3 4 Traditional focus of marketing-driven BI Best-practice benchmarks provide guidance Multitude of proven and calculated measures in many business units Explorative search for opportunities cross- enterprise
  12. 12. 12 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Agenda Big data The big data opportunity for telco operators Big data challenges for telco operators
  13. 13. 13 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Currently, most individuals are concerned about privacy, but neither fully aware nor able to manage their digital identity Source: BCG digital identity survey (n = 3,107, August 2012) Concern Awareness Control Individuals' privacy stage Share of EU online population 70–90% Regard at least one sector as privacy threat 15–30% Aware that > 50% of sectors collect personal data 0–10% Ever done > 3/4 of activities to manage their privacy How does this impact their behavior?
  14. 14. 14 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Stated concerns by individuals do not result in behavioral change Source: BCG digital identity survey (n = 3,107, August 2012) Concern Awareness Control Individuals' privacy stage High Low Lowest HighestExpressed concern Value of personal data =
  15. 15. 15 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Individuals with higher-than-average awareness of data uses require 26% more benefit in return for sharing their data Source: BCG digital identity survey (n = 3,107, August 2012) Concern Awareness Control Individuals' privacy stage -20% -34%-53% -32%-25%-23%-13% -9% -30% -20% -24% Car manufacturers Cable network providers RetailersLoyalty cards Health insurances Mobile phone operators BanksPublic agencies Online shopsOnline search engines Social networks High awareness of sector data collection Low awareness of sector data collection Impact of data collection awareness on willingness to share per sector (%)
  16. 16. 16 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Consumers who are able to manage their privacy are up to 52% more willing to share data than those who aren't Source: BCG digital identity survey (n = 3,107, August 2012) Concern Awareness Control Individuals' privacy stage +52% 56% 62%60%61% 56%55% 49% 63% 41% 60 50 0 Lowest HighestPrivacy protection proficiency Willingness to share, standardized (%)
  17. 17. 17 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Guiding principles for organizations Source: BCG analysis Control Transparency Responsibility Benefits Provide consumers options and controls to adjust sharing to their preferences Take accountability for a trusted flow of data Increase data security in order to safeguard digital identity Communicate benefits and engage customers for sustainable data usage
  18. 18. 18 Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved. Telcos in position to straightforwardly test the big data opportunity 1. Specify business case Detail calculation with company specific data • Key assumptions • Current infrastructure • Current cost structure Detail infrastructure transition case Identify realized and untapped potential Calculate opportunities and costs 2. Big data health check Health check on • Business ownership and data governance • Information management processes • BI organization • IT architecture Assess maturity driving factors for • Up- and cross- selling • Base management • Process optimizations • New business models 3. Develop and start POC Rank business opportunities • EBITDA impact • Time-to-market • Risk • Pre-requisites Identify case for quick- win proof-of-concept (POC) Define POC • Pre-requisites • Team • Project plan Ramp-up 4. Transform the organization Define data-centric vision Detail blueprint • Structure, roles and processes • Infrastructure Prepare strategic roadmap • Organizational roadmap • Technical roadmap Establish change agency and transformation program Avoid heavy upfront investment, follow broad, iterative approach – with a clear vision