Big Data: Building the next business platform for telecoms operators

Julio Puschel, Kris Szaniawski and Paul Lambert

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Copyright
2013 Informa UK Ltd. All rights reserved. The contents of this publication are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa UK Ltd, our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this publication are the trade marks, service marks or trading names of their respective owners, including Informa UK Ltd. This publication may not be:(a) copied or reproduced; or (b) lent, resold, hired out or otherwise circulated in any way or form without the prior permission of Informa UK Ltd. Whilst reasonable efforts have been made to ensure that the information and content of this publication was correct as at the date of first publication, neither Informa UK Ltd nor any person engaged or employed by Informa UK Ltd accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard - readers assume full responsibility and risk accordingly for their use of such information and content. Any views and/or opinions expressed in this publication by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa UK Limited

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Contents
Telco Big Data: Building a future business platform...................................................... 1
Fig. 1: What is the strategic priority at your organization for the following areas? (Top two options)..................1 Fig. 2: How would you characterize your company type?......................................................................................................... 2 Fig. 3: What do you think are the three key main drivers for Big Data in the short and long term?......................3 Fig. 4: Selected early telco Big Data initiatives................................................................................................................................4 Fig. 5: Is your company currently implementing Big Data?..................................................................................................... 5 Fig. 6: What is the % of your total IT budget is being allocated for Big Data solutions currently, and in three and five years?................................................................................................................................................................................................ 5 Fig. 7: What type of companies do you believe to be the key partner for operators in Big Data implementation?............................................................................................................................................................................................6

Telco Big Data: New tools and strategies........................................................................8

Fig. 1: The 3Vs: The underlying properties that define Big Data............................................................................................ 9 Fig. 2: Potential sources of data...........................................................................................................................................................10 Fig. 3: Big Data analytics use cases....................................................................................................................................................11 Fig. 4: Some of the Big Data companies that CSPs claim to be working with currently.........................................14 Fig. 5: Survey question: What type of companies do you believe to be the key partner to operators on Big Data................................................................................................................................................................................................................... 15

Telco Big Data: Strategic commitment required before operators can begin to realize the potential ...................................................................................................................17
Fig. 1: Main approaches to Big Data.................................................................................................................................................18 .............................................................................................................................................................................................................................. 18 Fig. 2: Types of Big Data..........................................................................................................................................................................18 Fig. 3: What is the main barrier to launching services using Big Data to generate new revenues? (Please select the top two options)..................................................................................................................................................................... 20 Fig. 4: When do you believe operators will be ready to generate new business opportunities using Big Data? (Please select one option)........................................................................................................................................................................ 21 Fig. 5: What is the most important element to put in place to generate new revenues from Big Data? (Please select one option)........................................................................................................................................................................................ 22

IT investment: Does it make sense for the CMO to have the power to make the decisions?.........................................................................................................................24
Who is/are the key influencers and the budget holders/decision makers for Big Data?...........................................24

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Telco Big Data: Building a future business platform

02 August 2013 Julio Puschel
Executive summary

The telecoms industry is starting to witness the initial Big Data implementations. Although these first examples are still far from building a solid proposition, they are providing a good opportunity for operators to test new applications that will influence how Big Data will evolve in the future. Most telco Big Data initiatives are focused on specific business applications, but opportunities in future will demand a broader approach of building a platform for several different business needs. There is an emerging dynamic vendor competition landscape. The Big Data framework is not well defined yet and there are analytics to be found in various areas within operators. The expectation is that, as the market evolves, the different vendors will focus on specific capabilities and collaboration.

Market status Telecoms operators finally have a good opportunity to generate new business models beyond traditional connectivity. Internet companies started the concept of Big Data by analyzing an enormous quantity of data in real time to drive business decisions. Telecoms operators already collect thousands of different items of data, including usage, content and location, in their networks and no other industry has its customers interacting with the company 24 hours a day, seven days a week as telecom operators do with their customers connected to their networks. However, telecoms operators are still far behind many other industries (e.g., Internet, retailers, etc.) in being able to monetize this opportunity. This is not only due to the complexity of the operators environment relying on various different data sources (e.g., network, BSS/OSS, CRM, customer care, marketing, etc.), but also to their very siloed organization which presents a challenge for an optimized data organization. According to the survey on telco Big Data that Informa conducted in June 2013, Big Data is still ranked as a low priority by operators (see fig. 1) as most of their focus is still on efficiency, network optimization and customer experience management (CEM). However, these priorities are strongly linked to Big Data: Being able to analyze a large volume of customer data could help operators optimize their processes and improve their margins while at the same time provide a better understanding of the current customer experience, which offers the opportunity to improve the customers overall experience of the service.

Fig. 1: What is the strategic priority at your organization for the following areas? (Top two options)

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Telco Big Data is still at a very early stage and operators dont have a full understanding of the business opportunities that it can generate. They will need to work on creating specific tangible applications based on the data they are constantly collecting but not currently using effectively. These applications will also need to provide concrete business cases for Big Data initiatives to justify any future investment. Survey methodology Informa Telecoms & Media conducted a survey in June 2013. The survey was based on an online questionnaire with approximately 25 multiple-choice questions. Of the329 respondents, 184 provided completed responses: Operators and MVNOs accounted for 47% of the respondents, vendors for 29% (see fig. 2).

Fig. 2: How would you characterize your company type?

Most of survey respondents were from the business development, sales or marketing departments (37% of total), but there were also a significant number of respondents from business strategy & intelligence, board members and operations. This variety of areas provides different relevant perspectives into the drivers and future of telco Big Data. Drivers for telco Big Data The short-term drivers for Big Data are still fairly evenly balanced among operators (see fig. 3), demonstrating that there is still uncertainty regarding the business need for it. There is an initial perception that the main driver for Big Data could be as a way to modernize current data warehousing, but there are only two percentage points between the proportion of respondents that chose that option and those that chose reducing churn and generating new business opportunities. However, operators seem to have a clearer long-term vision for Big Data, indicating that the main driver will be that it will create new business opportunities, followed by creating competitive differentiation.

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Fig. 3: What do you think are the three key main drivers for Big Data in the short and long term?

Big Data seems to be a low priority for operators strategy; most are still concerned about optimizing processes (see fig. 1). However, Big Data could be a key platform for operators to achieve their optimization goals. Being able to analyze an immense amount of structured and unstructured data allow operators to understand their main problems, optimize internal process and even use resources (i.e. network) more efficiently. Although Big Data is a hot topic, it is not expected to be at the top of operators priority list. Big Data is a platform to support several different initiatives within the business. It is different from previous approaches (data warehousing, CRM, etc.) where the technology implementation was the main goal, Big Data initiatives are mostly based on business objectives rather than the technology. Consequently, the priority will be always businessoriented (e.g., to improve the customer experience, to offer better and segmented services, etc.) with no case focusing on Big Data alone as a technology. Market dynamics Current telco Big Data initiatives Informa has identified three major use cases for Big Data:

Process optimization: Using Big Data to centralize customer information into a single source in order to optimize business process. The definition includes all Big Data initiatives to improve customer experience management. Segmentation, loyalty and upsell: Using Big Data to provide a better knowledge of customers in order to optimize loyalty efforts and improve upsell opportunities. Profile brokering: Using Big Data in order to use customer data to generate new revenue opportunities with third parties.

The initial Big Data initiatives are quite diverse, due to the range of their different objectives, but Informa has been able to classify them within those three major use cases (see fig. 4).

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Fig. 4: Selected early telco Big Data initiatives

AT&T has started using Big Data to reduce its spending on online advertising. The operator decided to create its own Demand Side Platform (DSP) to be able to directly negotiate online advertising. With the platform in place, AT&T launched its AdWorks services, which offers an integrated approach (Internet, TV and mobile) for advertising. Therefore, something that started as a way to optimize processes is now a new business area for AT&T. Furthermore, AT&T is not only investing in the technology to support its AdWorks, but is also building a platform that can support other future initiatives within its business. Online advertising is just one of many possible Big Data applications and it makes sense to optimize the investment on a future-proof platform. Other operators, such as Telefonica, Sprint and Telekom Innovation Laboratories (the central R&D unit of Telekom), are much more focused on experimenting; they are trying different business propositions using Big Data. Although these initiatives offer quite relevant examples of how to generate new opportunities via customer data, they are still far from becoming a significant share of operators revenues. However, those operators starting now will have considerable advantage by learning the challenges and pitfalls of such initiatives. Cricket and Telekom Innovation Laboratories are using Big Data to optimize their processes and operations. Telekom Innovation Laboratories is using Big Data to support predictive network capacity modeling while Cricket is using customer usage information to improve the customer experience. Concerns about privacy are present in all the initiatives around the globe, although they can vary from country to country depending on the regulatory environment. It is still too early to say how many of the data privacy challenges will be solved, but operators are finding alternatives to use anonymized data or offering opt in alternatives for some specific campaigns. Overall, 48% of operators on our survey are already implementing Big Data (see fig. 5). Of those, 72% are implementing separate business applications rather than an end-to-end solution. As mentioned previously, while it does make sense to focus Big Data implementations on specific business applications, operators also need to consider how they will evolve these initiatives in the future as the business changes.

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Fig. 5: Is your company currently implementing Big Data?

Of those operators who havent started implementing Big Data yet, 82% are planning to do so within the next five years 60% within the next two years. Therefore, Big Data is not only a hot topic at the moment, but it is a strong trend for operators in evolving their business to stay relevant in the business chain. Market development Big Data investment Operators stated on Informas survey that their investment in Big Data already represents 10% of their IT budget and it is expected to grow to 17% and 23% in the next three and four years, respectively (see fig. 6), which demonstrates how important Big Data is becoming in the operators IT priorities.

Fig. 6: What is the % of your total IT budget is being allocated for Big Data solutions currently, and in three and five years?

Although mobile operators are currently investing more in Big Data initiatives, they will not increase their investment at the same pace in the future as the convergent operators. This is probably a result of the complex IT challenges of integrating and offering multiplay services. Fixed-line operators dont plan to invest as much in Big Data, a possible consequence of an investment legacy culture that has a greater focus on the network than on new business opportunities. However, the expectation that even the fixed-only operators plan to increase their Big Data investment from 2% of total IT spending currently to more than 17% in five years shows the need for these companies to keep evolving their IT strategy to stay relevant in the ecosystem. Big Data vendor landscape In terms of Big Data vendors, operators prefer the traditional big IT vendors like IBM, HP and Oracle to conduct their implementations (see fig. 7). The fact that these vendors already have an extensive experience in analytics, combined with the full integration between software and hardware gives them a strong appeal. However, as the IT vendor landscape in telecoms
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is very fragmented, Big Data will offer an opportunity to quite a variety of vendors not just the traditional IT companies.

Fig. 7: What type of companies do you believe to be the key partner for operators in Big Data implementation?

Specific analytics vendors (e.g., SAS, Microsoft and Teradata) have a significant share of the survey respondents as many operators are already using some of these companies for a number of data analytics initiatives. The competition will increase when traditional telecoms names start to enter the Big Data competition. The new dynamic will be based on:

BSS/OSS vendors: These companies have already a strong presence in the operators IT structure, handling a vast quantity of data generated in billing, CRM, order management, etc. However, although BSS/OSS solutions already encompass some analytical capabilities, they still need to evolve these capabilities to be able to deal with real-time analytics of structured and non-structured data. Network vendors: As a significant amount of customer data is generated from the operators networks, it is arguable that these vendors have a role in Big Data. There is definitely a value coming from network companies as some of them have made continuous investment in evolving the BSS/OSS and network integration. Start-up solution providers: A number of companies with specific expertise areas are proving quite successful at supporting particular business applications. Companies that are working on network intelligence and traffic management will have a relevant role in Big Data due to their expertise in some areas.

Although telco Big Data still has a hazy competitive landscape with many different type of companies, it will become more clear as Big Data initiatives evolve. It will be difficult to have a single company responsible for an entire Big Data platform; it is more likely to be several companies with different specialties and backgrounds that will be involved in a single project. For example, it is difficult to imagine network vendors competing with traditional IT vendors; it will be more the case of these two types of company being part of a broader framework. Conclusions and recommendations Conclusions Telco Big Data initiatives are still in their very early stages, but it is better to start now than later: Most of the operator Big Data examples are based more on experiments than a solid business proposition. However, as Big Data implementations evolve, those players that have discovered what the challenges and pitfalls are will be a step ahead of competition. Big Data is much more than a new trendy IT solution, it is about building a platform to support not only operational optimization, but also new business initiatives: There is no such a thing as a Big Data service, it is more about building a platform that will provide operators with the opportunity to deploy several business applications to meet internal challenges, such as customer experience management, and develop new propositions, such as data/profile brokering. Although privacy concerns are still an important barrier for Big Data, they are not slowing down operators plans: Restrictions in the use of customer data vary from country to country,
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but the first examples will serve as examples to help mould the regulatory framework discussions in many countries. Business applications will drive most Big Data initiatives: Business applications that are more tangible to IT are more likely to get the buy-in from the CEO and CFO rather than just relying on a broad and subjective IT trend. However, operators will need to take into consideration how these business initiatives will evolve within the company and make sure they are investing in future-proof solutions. The competitive vendor landscape for Big Data is still not very well defined: It will take some time to vendors to find their role into Big Data implementations. Various types of company (BSS/OSS and traditional IT companies) are expected to compete with each other at the start but, in the mid to long term, all these different companies will have a role to play, which will require more collaboration. Recommendations Operators should take a long-term approach when implementing Big Data in order to support future business initiatives: Business applications will drive most Big Data implementations, but operators need to work towards building a platform that can handle both the specific applications and also the forthcoming business needs and opportunities. It is about building a platform: Big Data is not a magic solution that is going to solve all operators problems, neither is it a service in itself. Big Data is a platform that will allow operators to use customer data in order to support internal initiatives (CEM, operational efficiency, etc.) as well as new business models (digital services, profile brokering, etc). Dont underestimate the benefits of being an early starter. The experience acquired at this experimental stage will make a difference in the future: These first attempts might not generate scale or significant additional revenue, but they will be critical to the future success of business applications based on Big Data. Vendors should focus on their main areas of expertise rather than trying to address the whole Big Data requirement: Even within analytics, there will be demand for various different players with specific expertise (network, BSS/OSS, policy control, etc). Entering into the more traditional analytics solution could be a distraction to the core business.

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Telco Big Data: New tools and strategies

06 August 2013 Kris Szaniawski
Executive summary

Advanced real-time Big Data processing and analytics tools will deliver real value to operators but these technologies will complement and extend the more traditional relational database-management-system approaches rather than replace them. It is as important to focus on instituting better data-governance practices and better organization, integration and management of existing data sources as it is on investing in new technologies Operators should beware of creating new data silos. Big Data implementations should seek to create a platform that is robust enough to allow future cross-functional and cross-departmental expansion. Early Big Data projects have struggled to demonstrate a clear impact on value or deliver a strong ROI but initial feedback suggests that this may be as much to do with data silos, unclear objectives and the shortage of skilled staff as the actual tools. It is unrealistic to expect each individual Big Data project to have a stand-alone business case. Each project also needs to be viewed as a building block within a larger customer-centric strategy.

Market status Definition Big Data has multiple facets and meanings. At one end of the scale, the term Big Data has suffered from so much overuse that it has at times become synonymous with any type of data processing or analytics, with every operator or vendor claiming to be pursuing a Big Data strategy regardless of the tools or data sources involved. At the other end of the scale, the term Big Data has been linked solely to the processing of huge volumes of semi-structured and unstructured data that is required for social-media analysis, and is specifically associated with the new generation of data processing and analytics technologies such as NoSQL databases, Hadoop and MapReduce. The correct definition falls somewhere between the two and there is a particularly strong logic in the telecoms domain to steering a middle path between these two extremes. Big Data does indeed require the adoption of new approaches to data processing and analytics because the volume, velocity and variety of data have outgrown the ability of existing systems to capture and analyze it. But the telecoms vertical, more than other sectors, requires a Big Data strategy to incorporate existing sources of structured data as well as legacy analytics platforms and data processing tools. For this reason, Informas definition of Big Data in the telecoms domain applies not just to unstructured or semi-structured data derived from Internet data, reports on social-media activity or Web-server logs, but also to transactional and operational data stemming from more traditional telecoms data sources, such as CDRs and network data captured by sensors, and from mediation, CRM or billing systems. Big Data for communication service providers (CSPs) needs to be not just about mining and analyzing new categories of data that have until recently been inaccessible to more traditional business intelligence (BI) and analytics tools but also about identifying links and associations between CSPs more structured transactional and operational data sources. Big Data also needs to be seen in terms of the underlying data properties which are driving a new breed of data storage, processing and analytics systems and strategies:

Volume: This is the primary attribute of Big Data with operators seeing exponential rises in the amount of transactional and operational data they need to process in line with exponential growth in customers use of IP applications. The data volumes
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involved will increasingly involve not just terabytes but petabytes or even exabytes of data. Velocity: The rise of real-time reporting and data streaming is gaining increasing traction and as a consequence operators are no longer just processing batch data uploaded at regular intervals for performance management and other functions. Variety: The overwhelming majority of this new data is unstructured or complex and this is expected to continue to grow faster than structured data. Structured data (e.g., CDRs) increasingly needs to be complemented with analysis of unstructured data (text and human language) and semi-structured data (XML, RSS feeds), although multidimensional data will continue to be drawn from a data warehouse to add context.

Commentators and analysts are busy adding lots of other Vs to these original three in order to enrich our understanding, including value, but ultimately value is the outcome of an effective Big Data strategy rather than one of its underlying properties. It is these original three Vs that are the three key factors that define Big Data and make it different from what came before. Furthermore, it is only the combination of all three factors that ensures new approaches need to be adopted to handle data storage, processing and analytics (see fig. 1). Fig. 1: The 3Vs: The underlying properties that define Big Data

Nevertheless, it is worth stressing that, of the 3Vs, velocity has a particular significance in the telecoms sector. CSPs inevitably place a great deal of importance on real-time and contextual data analysis given their need to apply Big Data to micro-segmentation and realtime marketing analytics as well as to support faster decision-making and more proactive problem-solving on the operational side. Market trends Big Data initiatives in the telecoms sector still typically involve a strong element of traditional business intelligence and analytics. Despite all the hype, large-scale investment in advanced real-time analytics and distributed data processing systems is still rare: What is most prevalent in the telecoms sector is structured data being processed by analytics engines using relational databases. Large platform and BI software vendors such as Oracle, IBM, SAP, SAS and Microsoft continue to play a strong role. However, unstructured data continues to gain traction, for example, with text-mining or textanalytics tools being used to convert facts discovered in textual documents into structured data. Analysis of social-media data based on blogs, tweets and social networks is still at an early stage but is receiving increasing attention as is analysis of Web logs and click streams. At this early stage, page views and likes are probably the most monitored items in social media. The growing importance of unstructured data is one of the reasons all the big BI and data processing companies are creating a Big Data story on top of their existing offerings as well as adding capabilities and integrating them with their existing BI offerings and enterprise data warehouse (EDW) platforms.

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Multiple data sources One of the key characteristics of the telecoms sector is the multiplicity of data sources. The potential sources/types of data include structured and unstructured as well as internal and external data (see fig. 2). All of these types of data can be used in combination or matched with data from other sources in order to microsegment or make inferences about behavior patterns. Fig. 2: Potential sources of data

Many of the early use cases revolve around making better use of Big Data to support more focused marketing, targeted advertising, customer segmentation and personalization as well as improving customer experience, reducing customer churn and improving operational efficiency. Operational-efficiency use cases tend to attract less attention than marketing ones in operator conversations or on the conference circuit. Nevertheless, Big Data and real-time analytics can play an important role in improving operational efficiencies by providing a detailed context for decisions about network and service quality as well as faster decision-making and being more proactive in problem solving; for example, by using predictive analytics to identify where services may be degrading. More advanced use cases include targeted real-time marketing analytics and operators using Big Data analytics to create competitive differentiation and generate new business opportunities with OTT players and in other sectors. There will also be opportunities in data brokerage if the regulatory and privacy issues can be addressed. Big Data provides CSPs with the opportunity to use customer information as part of a twosided business model, where fresh revenue streams are created with new partners such as retailers, advertisers, enterprise verticals or public administrations. However, at the moment, most of these initiatives are still at a very early stage. Some CSPs, such as AT&T, Sprint-Nextel, Telefonica and Verizon, have either set up Big Data marketing units or claim to have had early success with sharing customer insights, but such partnerships are still relatively rare. For more detail on use cases and CSP attitudes to Big Data see this analysis piece by Julio Puschel. Big Data use cases are plentiful (see fig. 3) but references that demonstrate clear impact on value are still thin on the ground. Demonstrating the value or ROI of a Big Data project remains an issue as the business case for stand-alone Big Data projects is rarely clear.

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Fig. 3: Big Data analytics use cases

Market dynamics Business drivers and processing trends From a technology perspective, the two biggest factors driving the BI and data processing landscape in the telecoms space are the advent of Big Data processing and the move towards advanced, real-time analytics. In response to these demands, vendors have been launching a range of new analytics platforms and database systems. An important question facing operators is whether the current or planned enterprise data warehouse (EDW) can scale to handle the mixed workloads of Big Data and advanced analytics processing without degrading the performance of other workloads for reporting and online analytic processing (OLAP). The options are, therefore, to:

manage Big Data analytics in a shared, centralized EDW manage Big Data analytics in a separate but related database take a hybrid approach with some elements of big data processing and real-time analytics being handled by both platforms.

Currently, most operators perform their Big Data processing in the EDW and employ a traditional relational database management system (RDBMS). However, this approach is increasingly being supplemented with complex event-processing tools that stream data either into the data warehouse or direct into an analytics engine to provide real-time monitoring and analysis capabilities. In terms of database solutions sitting outside the EDW, there is much talk, although largescale deployments of distributed file systems, such as Apache Hadoop, are as yet limited. This growing interest is reflected in the fact that all the big database vendors are integrating Hadoop into their BI platforms.
The Apache Hadoop platform

Although deployments are rare, there is currently a lot of interest in the Hadoop Distributed File System (HDFS) as an enabler of Big Data analytics. Because Big Data tends to be diverse in terms of the data types processed, a data-type-agnostic file system represents a good fit to address that diversity. Transforming the complex data types associated with Big Data into data structures suited to storage via a traditional database management system (DBMS) is a problem when dealing with Big Data because of time-consuming processes for data modeling, data integration and loading data in bulk. The distributed nature of HDFS allows analysis to be conducted in parallel and so avoids the potential bottlenecks created by monolithic storage systems. Plus,
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transforming data into structures suitable for storage via traditional DBMS could potentially lose the data details and anomalies that fuel some forms of analytics. Nevertheless, a number of deployment models are currently being considered. One involves using Hadoop as a separate database from the EDW to process and run analytics on unstructured data from social media and Web logs while the EDW is used to process structured data from traditional mediation platforms. The issue here is that this approach creates silos of data with multiple versions of the truth. Another approach is to use Hadoop as a staging layer where it performs preprocessing, filtering and transforming of semi-structured and unstructured data for loading into a data warehouse. Although Hadoop can be used on both structured and unstructured data, at the moment it is not typically being used for analyzing conventional structured data such as transaction data, customer information and call records, where traditional RDBMS tools are still better adapted. Instead, Hadoop currently appears to be used mainly for storage or as a staging layer; for example, being used as Hadoop ETL (Extract, Transform and Load) to preprocess, filter and transform vast quantities of semi-structured and unstructured data for loading into a data warehouse. Distributed file systems such as Hadoop should not be viewed as a substitute but rather as a complement to traditional RDBMS platforms as they are particularly suited to processing the unstructured data required in social-media analysis. HDFS is particularly valuable in that it is scalable and fault-tolerant. In a distributed file system, if one node goes down, then other nodes in the cluster can be used. The scalability and resilience comes from the combination of the clustered storage capabilities of HDFS and the fault-tolerant distributed processing of MapReduce, a programming model closely associated with distributed file systems like Hadoop and designed to process large datasets stored in clusters. Operator challenges and Big Data inhibitors Depending on their existing infrastructure, operators are faced with either optimizing and upgrading their current architecture or investing in new technology such as the Hadoopbased systems mentioned above. There are potential drawbacks to either approach. Legacy BI and EDW assets have the advantage of scalability and processing speed, but in many organizations these technologies have been designed and optimized for reporting, performance management and OLAP. This optimization is invaluable for big-picture or enterprise-wide reports but is often less well-suited to advanced analytics and Big Data processes. New technologies that are based on distributed file systems and which sit outside of the EDW are better-suited for processing unstructured or semi-structured data. But they also have potential drawbacks not just the lack of a compelling business case (as mentioned earlier), but also:

human/organizational issues time and cost concerns integration issues.

Other concerns, such as those around security, privacy and regulatory issues, straddle both approaches.
Human/organizational issues

People and process are typically quoted as contributors when major data projects have failed to deliver. Big Data, and the value around it, is not just about technology. If projects focus only on new technology, they are unlikely to deliver significant change. CSPs that have undergone Big Data projects stress the importance of the human aspect of the projects and the need to reorganize and restructure the business, IT, customer care and marketing teams. New processes and structures are as important as the technology. A lack of sufficiently skilled IT and analytics staff is also an issue given the novel nature of Big Data and the fact that so many disparate sectors suddenly want to hire people with
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data analytics expertise. Skills shortages have been an issue with regards to data scientists, programmers, modelers and analysts. However, some of this pressure may ease as more automation and simpler user interfaces are introduced.
Time and cost concerns

Setting up Hadoop can be complex and time-consuming. Although this is not always the case, the length of time it takes to implement an individual Hadoop project can vary from a few weeks to several months or more, depending on the complexity of the project. There here have been implementation failures and as is the case with all new technologies there is the potential a backlash. Big Data projects are also rarely a one-off investment with a fixed start and end point. Given the nature of such projects, involving multiple data sources and cross-organizational groups, it is inevitable that such projects proceed on a step-by-step basis. However, such an incremental approach, using a Big Data platform to support multiple initiatives, can make it difficult to convince senior management given that they typically demand a clear and immediate business case.
Integration issues

Data quality and integration issues are also a key concern. As a consequence data integration is one of the big challenges when it comes to achieving success with Big Data and analytics implementations. The data integration capabilities of vendors are typically cited as important criteria when deciding who to go with for an implementation. CSPs typically have a legacy of multiple systems and databases serving different departments and functions and supporting multiple products and services. Addressing these fragmented data sources and structures is far from easy. As a consequence it is not just the integration tools that large IT providers offer that are attractive but also their data integration and management skills. There may be low-hanging fruit that can be targeted with a Big Data implementation but to gain maximum value from Big Data it is better to deal with data in an integrated and holistic manner rather than risk creating yet more data silos. A single view of the customer is crucial. For more on this, see this analysis piece on CEM. Market development As mentioned earlier, the adoption of Big Data processing and advanced real-time analytics in the telecoms sector is still not that common. For example, at Big Data conferences and events focused on the telecoms sector, the case studies and projects discussed by delegates typically focus on more traditional BI or analytics approaches rather than on Apache Hadoop implementation. A global Telco Big Data survey that Informa conducted in June 2013 also reinforces this message. Just under half of the 159 operator respondents claimed to be implementing a Big Data solution currently. Furthermore, the types of companies survey respondents claimed to be working with currently (see fig. 4) suggests that what operators label as Big Data implementations are as often as not variations on traditional BI and data-warehousing strategies rather than a full-on adoption of a Big Data strategy based on distributed file systems and advanced real-time analytics.

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Fig. 4: Some of the Big Data companies that CSPs claim to be working with currently

The new generation of Big Data companies such as Cloudera, Hortonworks or Splunk is notable for their absence from fig. 4, although Guavus was one that was mentioned by several respondents. It is worth bearing in mind that the survey question wording asked operators which companies were leading their Big Data implementations, so the fact that some of these Big Data companies have relationships with large SQL vendors like Oracle may have influenced the result. Nevertheless, the survey result is clearly a reflection of the relative immaturity of this market and suggests that new Big Data technologies in the telecoms sector at least are more likely to be implemented as an add-on to other BI or customer-centric initiatives rather than on a stand-alone basis with their own distinct business case. Ironically, one factor that has had an impact on the slow adoption of new Big Data technologies by CSPs is the fact that in the past the telecoms sector has invested heavily in EDW infrastructure and was an early adopter of analytics. Such legacy investment decisions will continue to have an impact, especially in Tier-1 operators. Tier-2 operators are likely to be less conservative, as are the operators in fast-growing and highly-competitive markets such as APAC and MEA. Operators are likely to continue to need tools that can query multiple data sources, if only because for the foreseeable future legacy platforms are not going away. For CSPs, there is considerable value to being able to join up data from multiple sources, and, although new technologies such as Hadoop are good at handling different categories of data, there is nevertheless a lot that can be achieved with relational database management systems and more traditional approaches. Throwing everything away and replacing it solely with a Hadoop cluster is not necessarily the most obvious choice in a telecom context. As a consequence, vendors that can provide end-to-end offerings that span established EDW platforms and advanced real-time analytics will be in a strong position. Furthermore, a Big Data strategy gains value when it is a component of a broader customercentric or transformational initiative. For example, where network-optimization or customerexperience management projects are already ongoing, there will likely be a strong case for a CSP to add a Big Data component in order to add more customer information to the mix. Another thing that needs to be factored in is that full-on Big Data strategies can have a high entrance cost and uncertain TCO. Implementing Hadoop can require a lot of servers. Clearly new technology developments could potentially change this or disrupt the market, but, given the strong market position of the traditional relational database vendors such as Oracle, IBM or Microsoft, it is more likely that price structures will not change dramatically. Vendor positioning Big Data players are typically positioning themselves as product companies first and foremost, given the level of hype there is currently surrounding Big Data technologies. However, this is only half the picture. A successful Big Data project depends as much on the business and IT consulting and integration skills as the technologies involved.
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It is on the services side that much of the business value and cost will reside, as is often the case when complex software is involved. Given the importance of the data-integration issues mentioned earlier, as well as the incremental and ongoing nature of Big Data projects, it is inevitable that strong consulting, business process and integration capabilities, as well as the ability to provide different types of data-related services and support, will all be important differentiators for vendors. For this reason, big IT solution providers such as IBM, Microsoft and Oracle are well-positioned to maintain a strong position in this space, as are any companies that can combine IT and analytics expertise with strong consulting and transformational skills. This message is driven home by the answer to a partnership question asked in the Telco Big Data survey (see fig. 5).

Fig. 5: Survey question: What type of companies do you believe to be the key partner to operators on Big Data

When asked which companies they believed were the strongest partners for a Big Data implementation, the largest number of CSP respondents (37%) chose big IT solution providers, such as IBM, HP, Microsoft or Oracle. The second most popular category (24%) was specific analytics providers, such as SAS, Microsoft or Teradata. The third most popular category (17%) was start up solution providers such as Guavus or Hadapt. Network and support system vendors scored lower. However, it is worth pointing out that the survey question was a broad-brush one as it asked respondents what single category of company would play the key role in a Big Data engagement. In the real world, the picture will be a more complicated one with CSPs working with multiple suppliers and opportunities for companies from different parts of the ecosystem to work with each other. One example of this type of arrangement is the recently-announced relationship between IBM and China-based telecom IT provider AsiaInfo-Linkage. The latters Big Data offering, Veris Convergent Context-awareness Center (C), has IBMs Netezza-powered PureData for Analytics technology embedded in it and is already being deployed by China Mobile for targeted marketing and customer insight purposes. Conclusions and recommendations Conclusions
The telecoms Big Data market is still relatively immature and CSP goals need to reflect this

The telecoms Big Data market is still relatively immature and, although everyone is talking about Big Data, the typical reality on the ground is structured data being processed by analytics engines using more traditional relational databases rather than Big Data technologies such as Hadoop. Hence, the initial steps need to be as much around instituting better data-governance practices and better organization, integration and management of existing data sources. In the medium to long term, advanced Big Data processing and analytics tools will be required if operators are to get to grips with disparate data sources and use them fully but Big Data technologies will complement and extend more traditional relational database management system (RDMS) approaches rather than replace them.
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Beware of creating new silos

In an ideal world, Big Data projects would be implemented as one component within a broader transformational or customer-centric project because there are clear synergies with any strategies that seek to improve agility, optimization or customer experience management. But the reality is that the majority of Big Data project implementations are and will continue to be driven by specific business needs and applications. Stand-alone Big Data implementations may predominate initially but that should be no excuse for creating yet another set of data silos. Big Data implementations should seek to create a platform that is scalable, extensible and future-proofed as much as possible as well as robust enough to allow future cross-functional and cross-departmental expansion.
Big Data is as much about processes and organizational issues as it is about technology

Big Data is as much about people and processes as it is about technology and it is these organizational issues that need to be sorted out in the first instance. Some of the early Big Data projects have struggled to demonstrate a clear impact on value or deliver a strong return on investment (ROI) but initial feedback suggests that this may be as much to do with data silos and the shortage of skilled staff as the actual tools. With this in mind, CSPs need to put their own house in order before pushing ahead with more sophisticated business models involving third parties. Recommendations
CSPs should not get too hung up about quantifying the value of stand-alone projects

It can be counterproductive to focus exclusively on the ROI on individual Big Data projects without taking into account the bigger picture. An incremental approach to Big Data clearly still requires each individual project to deliver a measurable outcome, however small, otherwise no project would ever get approved. But it is unrealistic to expect each individual Big Data project to have a stand-alone business case. Each individual project needs to be seen as a building block within a larger customer-centric strategy and it is this which will ultimately deliver ROI.
Start with simple analysis and get that right first before moving on

To achieve success, CSPs need to keep their project goals focused on relatively straightforward business requirements. CSPs should take an incremental approach both to projects and implementation and also to what they are seeking to achieve. It makes sense to start with simple analysis to investigate key usage trends or understand critical demographic segments before moving on to advanced modelling or predictive analytics. Given most CSPs relatively low starting-point, a lot can be achieved by applying simple experiments to customer care, revenue management or segmentation. It makes more sense for CSPs to refine and build on such achievements gradually rather than experiment blindly.
Technology can only provide a temporary competitive advantage for vendors

Vendors need to focus on creating strong professional services, integration and process capabilities if they wish to succeed in the Big Data space. Much of the revenue opportunity in this space is around services rather than just products and this is also where a lot of the differentiation will reside. Collaboration and partnership or acquisition can deliver additional components of a BI and data-analytics offering, whereas strong professional services, integration and process capabilities are more difficult to match. Further reading

Telco Big Data: Building a future business platform Why operators need CEM, customer intelligence and analytics

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Telco Big Data: Strategic commitment required before operators can begin to realize the potential
09 August 2013 Paul Lambert
Executive summary

A handful of operators are in the early stages of exploring the business opportunities around Big Data, in particular high-velocity, real-time data use. The market is not near a tipping point, but when an operator sees tangible benefit from an initiative that uses Big Data, the market will follow. Operators need a genuine C-level commitment to Big Data if they want to begin to explore the opportunity in a coherent manner. Vendors are pitching the maturity of the technologies that will enable Big Data projects, but operators in general are not yet ready to commit to make the necessary investments in the absence of proven ROI. Because the business case has yet to be proven, the vast majority of operators have a wait-and-see approach to Big Data, despite the fact that operators are under pressure to create new revenue from other sources. The main questions for an operator committed to monetizing Big Data are: what are the main areas ripe for investment and strategic commitment; and who will maximize opportunities around it? Operators lack vertical-industry knowledge. So they need to form partnerships to gain access to the specific vertical-industry expertise that they need to build the necessary infrastructure to use their Big Data assets. In creating partnerships, operators need to prove that they are effective partners and that their Big Data assets will create new value to companies in other sectors as they will often be new to partnering with telecoms companies. Regulation covering Big Data is hampering operators in two ways: regulation on a market-by-market basis is often out of step with the operators technical capability and strategic intent; and inconsistent regulation between countries and within regions. Regulation needs to evolve to meet consumers expectations on privacy and use of data, and also provide operators with a clearly defined framework within which they can explore the Big Data opportunity.

Market status Its a widely held view that operators have more information about their subscribers than Internet companies do but Internet companies are better placed to monetize this information than operators. While Internet companies are not necessarily uniquely positioned in the area of Big Data, they are 100% focused on creating value from its data. Although this is certainly the case at the moment, operators are now beginning to explore ways they can use the data their subscribers generate in conjunction with their direct-billing relationships as an asset to create new revenues away from their core voice and data-access revenues. But as operators eye this new metric, average revenue from other sources (AROS), the challenges they face touch the core strategic challenges they face in general: identifying new business opportunities with an entrepreneurial mindset and positioning themselves to take advantage of them, often through partnerships. While there are clearly defined opportunities in the area of Big Data, how these opportunities can be realized in practice remains unclear. Regulatory hurdles, questions over end-user acceptance of allowing their data to be used in new ways, and the current lack of a clear vision of the concrete business opportunities available to operators in this area mean that Big Data is very much uncharted territory. However, some operators are focused on exploring these opportunities, despite these uncertainties, and are exploring different emerging business models to begin to capitalize on the potential of Big Data. A growing number of operators, in particular the large multinational players, are looking at their data assets in the following ways:

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How can we investigate the value of it? How can we use it to improve customer experience and to optimize customer interactions? How can we use Big Data to drive AROS?

An analysis of the technical-strategic considerations related to these finds that Big Data implementations should seek to create a platform that is scalable, extensible and futureproofed as much as possible as well as robust enough to allow future cross-functional and cross-departmental expansion. How can Big Data generate revenue from other sources? In the telecoms world, Big Data refers to two distinct opportunities, on the one hand, internal, on the other, external (see fig. 1). Fig. 1: Main approaches to Big Data

This piece focuses on the way operators can and are beginning to look into how they can generate revenue from other sources. This covers the following areas:

Using Big Data to help operators internal processes. Using Big Data to generate new revenues (e.g., new revenues from advertising). Selling Big Data in an aggregated form.

Market dynamics Approaches to Big Data

Fig. 2: Types of Big Data

The opportunity operators have to generate new revenues around advertising is a good example of how the data an operator owns can be used to generate revenues from other sources. The data an operator has on a mobile subscriber can be used to compile social and demographic details that can be tailored to specific campaigns and within these to specific user segments. Anonymized Web click information in conjunction with subscriber
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data can create targeted segmentation information about, for instance, a typical car owner that advertisers can use to target an ad-insertion campaign more effectively. While Big Data initiatives are very much in their infancy, some operators are taking early leads on experimenting with initiatives that use Big Data assets. We cover a few in the following sections.
AT&T AdWorks

AT&T AdWorks is a unit within AT&T covering its mobile, fixed and TV assets that offers advertising based on AT&T subscribers usage patterns and identity data. AdWorks aims to place adverts on PC, mobile and TV devices that are targeted to individual users based on the information it has on subscriber usage patterns that are mapped onto sociodemographic information. This is a good example of an operators Big Data initiative at this stage of the market because it encompasses both technical and organizational commitments to realize the Big Data opportunity. In terms of technical capability, AT&T is implementing a new Demand Side Platform (DSP) for advertising, and, on the organizational side, it is implementing a centralized Big Data approach.
Telefonica Smartsteps

The Telefonica Digital unit of Telefonica has launched Telefonica Smartsteps to offer anonymized customer traffic information to high-street retailers. Smartsteps represents a clear organizational commitment to positioning for the Big Data opportunity. Not only has Telefonica created a separate unit within Telefonica Digital with the specific aim of generating revenues from new sources, the operator has also partnered with a company in an adjacent sector, market research company GFK, to explore this opportunity.
Telekom Innovation Laboratories

Telekom Innovation Laboratories, the central R&D unit of Telekom, launched a series of realtime insurance services based on demographic and location-based data this year. Telekom Innovation Laboratories says it positions itself as a secure and a trusted service provider and believes that it can generate new revenues from real-time insurance by being a business enabler for insurers. The first product Telekom Innovation Laboratories launched was a third-party-branded realtime insurance product targeted at young skiers. The service uses a mix of data: CRM; locationbased; third-party and insurer; and behavioral. Telekom Innovation Laboratories carried out the platform development, front-end and back-end operations and provided the billing and accounting capability. It shares responsibilities for marketing and communication with the insurance third party while the app is also promoted using other Telekom channels, the Telekom brand and the Telekom customer-support capability. Telekom Innovation Laboratories offered a range of services: insurance price comparison products; multiple payment offers; context-enriched insurance offers; and opt-in based prefilling of customer information. The opt-in service is delivered via a smartphone app that identifies when someone fitting a particular profile arrives at a relevant airport or ski resort and targets them with personalized alerts and reminders to pitch tailored insurance offers to them. Telekom and its insurance partner agreed a revenue-share model based on usage: Telekom acts as an agent for the insurance company, but takes a higher revenue share. The insurance premium is paid for via Telekom users monthly bills rather than direct to the insurer. Again, this initiative shows the importance of:

identifying the opportunity targeting clearly-defined segments enabling the technical capability partnering with the right company to augment core capability, Telekom is also open to partnering with other operators to launch the service.

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Sprint

US operator Sprint has partnered with a market research company for access to insights derived from anonymized user data to understand consumer behavior and movements. Sprint uses a mix of structured (call records and logs) and unstructured data (Web browsing, app usage) to create Big Data insights centered on anonymized consumer profiles. Sprint sees retailers, financial services, healthcare, entertainment, transport, hospitality and market research as potential industries that would benefit from its Big Data insights. Sprints Big Data initiative is in an early experimental phase. It believes there are technical and institutional challenges to monetizing Big Data effectively, ranging from a top-level strategic commitment to realizing the Big Data opportunity to ensuring that the data insights it can offer third parties is reliable and valuable to them in the specific ways that they will want to use the data. Sprint is understood to generate single-digit millions of dollars from its Big Data partnerships at present. Barriers to Big Data Vendors and operators no longer see technical capabilities as the major barrier to exploring the Big Data opportunity it is more a question of how and if to deploy the technology available, both from vendors and in-house development. The main barriers to deploying the necessary technology to explore Big Data initiatives are strategic particularly the absence of a clear business case. Of the main operator initiatives around Big Data, Telefonica, AT&T and Telekoms are underpinned by the strongest strategic commitment. In the case of Telefonica, it has set up a whole new unit to explore opportunities for revenue from other sources. The decisions these operators have taken to address the Big Data opportunity have resulted in distinct teams or units within companies to integrate the separate components that need to be in place to approach Big Data. A strategic barrier to launching Big Data initiatives is the lack of expertise within operators. Using Big Data to generate new revenues requires expertise about other sectors, such as advertising and insurance. This means that operators need to partner with companies that can bring this expertise to the project, something that can only be done if there is C-level strategic commitment to Big Data in the first place. This gives rise to a vicious circle: operators need to commit to Big Data in the absence of clear ROI but a clear ROI is absent without the expertise to identify it. According to Informa Telecoms & Medias Telco Big Data survey, the major barriers to launching services using Big Data to generate new revenues are the lack of a clear business case and that the organizational barriers are too high (see fig. 3).

Fig. 3: What is the main barrier to launching services using Big Data to generate new revenues? (Please select the top two options)

End users willingness to accept the use of their data is also a barrier to operator commitment to Big Data. If an operator uses subscriber data, will it fall foul of regulation? What are the regulatory limits to using Big Data? Are there any best-practice guidelines to using subscriber data, both internally and in partnership? Operators dont yet know the answer to these
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questions with a sufficient degree of certainty to feel comfortable committing to Big Data, especially given the often punitive, and retroactive, fines that regulators impose for perceived breaches of consumer privacy. A working approach that operators are relying on to avoid regulatory censure is anonymizing subscriber data, as in the case of Sprints profile-brokering initiative. However, regulation around anonymization of subscriber data is also still uncertain, as is regulation between countries and regions. For instance, in the European Union, consent to using subscriber data has to be opt-in on the basis of informed consent. In the US, by contrast, the requirements are that there is only some consent, either opt-in or opt-out. Market development While advertising and insurance are two of the main examples of using Big Data to generate new revenues, there are innumerable areas where Big Data could potentially be used. However, in the near term at least, the extent of operator commitment to using Big Data as a way to generate revenue from new sources will largely be determined by the success of the initial deployments. Operators will look to these early deployments to gauge if and how they pursue Big Data strategies. Gauging the success of these deployments is challenging to assess reliably because they are in such uncharted territory. Although there are more questions than reliable answers about the development of the market, the questions do point to some of the areas where the future of the market will be played out. Can mobile operators offer better end-user insights than established mobile-advertising players? Can advertisers and operators charge more for adverts in this way? How big can the premium be? Can operators demonstrate any improvement on insights provided by established players? Can operators catch up with established players in other sectors (e.g., insurance, advertising)? If the early-running operators prove the potential of Big Data to generate new revenues, how will competition in this space among operators play out? While Big Data is a clear opportunity for operators to generate new revenues from other sources, the progress of the early Big Data deployments over the next 12 months will be crucial in determining the extent and speed at which other operators commit. It is likely that the majority of operators will adopt a wait-and-see approach and look to deploy key findings from the Big Data front-runners. According to Informas Telco Big Data survey, almost half (48.3%) expect to generate new business opportunities using Big Data in the next 1-2 years, while 42.% expect to generate new business opportunities using Big Data in the next 3-4 years (see fig. 4).

Fig. 4: When do you believe operators will be ready to generate new business opportunities using Big Data? (Please select one option)

The most important elements to put in place to generate new revenues from Big Data according to the survey are partnerships, C-level commitment and a proven market (see fig. 5).

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Fig. 5: What is the most important element to put in place to generate new revenues from Big Data? (Please select one option)

Conclusions and recommendations Conclusions

Using Big Data to generate revenue from other sources is very much at its early stage of development

Even the most strategically-committed operators are just beginning to experiment with ways they can use the insights they have on subscriber identity, usage and real-time location. There are areas where revenues may be generated but this has yet to be proven or reliably quantified. For more operators to commit to using Big Data to pursue new revenues, the early-runners need to show proven results.
The barriers to implementing a Big Data strategy are more strategic than technical

Operators have technical solutions to manage Big Data, with the Apache Hadoop platform emerging as a major player. The most significant challenge to pursuing the Big Data opportunity is the high-level strategic commitment that is required to pursue the necessary partnerships with companies in sectors where operators have little or no experience. This represents something of a chicken-and-egg problem for operators: without the platforms in place they cant develop a Big Data strategy, and without the platforms in place, commitment from potential partners to explore new revenue opportunities will be difficult to achieve. Recommendations
Operators should begin discussions with vendors and potential partners in adjacent sectors to determine the Big Data opportunity

Although the market for telco Big Data is in the initial stages of development, operators looking to generate new revenues from Big Data should begin exploring this opportunity to be in a position to strike the most beneficial deals in the most profitable sectors before competition starts. Operators still need to understand where the largest Big Data opportunities are, who they need to partner with to get there, and what investments they need to make to be able to capitalize on them. They will be entering new verticals with incumbent data providers and will need to understand how they can best compete with experienced players in these markets.
Operators should be prepared to reorganize existing internal structures to capitalize on Big Data

Using telco Big Data to effectively pursue opportunities to generate new revenues from other sources means operators would need to create a new business unit, either within their existing structure or, like Telefonica, create a new stand-alone entity with a distinct mind-set and range of business goals. To realize this, operators need to make a C-level decision about using Big Data to generate revenues from other sources because the demands that potential partners will make on operators over their Big Data assets will best be met if there is highlevel strategic commitment to effectively engage with partners on Big Data.
Operators should look to set the agenda over privacy concerns on data usage

The telco industry should engage with regulatory bodies in a coordinated way to open a dialog on the way consumers privacy concerns can best be met in the context of evolving technical capabilities, while also providing a framework for operators to use their data in ways that meet these concerns. To have no regulation, or regulation that is patchy or inconsistent, is a lose-lose situation for both operators and consumers. In the absence of clear regulation governing end-user data in the context of technology innovation, operators have the opportunity to set the agenda with end-user concerns on privacy by engaging over them in a transparent and open way. Given that consumer concerns over data use seem to center most
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on unwarranted use of their data, then operators should explore ways to effectively inform them about how their data will be used and provide a simple way to opt out. Further reading

Telco Big Data: New tools and strategies Telco Big Data: Building a future business platform

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IT investment: Does it make sense for the CMO to have the power to make the decisions?
10 July 2013 Julio Puschel
Whats happened? The telecoms industry has been arguing about whether or not IT decisions are being shifted away from the CIO to the CMO. Most of this perception is based on the way that, in many cases, technology is not able to keep up with marketing needs due to the market dynamics. The CMO still faces limitations in the IT even for simple tasks such as creating a new product or changing a plan price. Ordinary tasks like this can take weeks or even months in some cases. Informa Telecoms & Media conducted a survey in June 2013 that had approximately 128 respondents (including operators, vendors and consultants). Almost half of the respondents said that, in their company, the budget and decisions for Big Data investment are still largely managed by the CIO (see fig.). A little over half said that the IT area is also a key influencer in these decisions, followed by the CEO and CMO (45% and 37% respectively).

Who is/are the key influencers and the budget holders/decision makers for Big Data?

Big Data is just one example, but other IT decisions (i.e., BSS/OSS) are also still believed to be handled by the CIO. There does appear to be a trend emerging of CMOs having an increasing influence, even, in some extreme cases, having the power to make decisions about the budget. CMOs are definitely important participants in operators decision process as they are able to generate tangible business cases and applications for technologies. However, the scope of the CMOs role and their lack of technological knowledge do place significant limitations on them having any more power to make decisions about IT. Why does it matter? The shift in terms of influence and decision power can have a significant impact on the way operators invest in IT. More and more IT vendors are changing their pitch from focusing on technology features to promoting the business benefits. From an operator perspective, the decisions will start to focus more on the business needs and (hopefully) on clients needs rather than on the cost saving of IT optimization. There are some examples of the CMO becoming responsible for the entire IT budget to coordinate several projects focusing on the companys central objectives, while working closely with the CIO to make the IT decisions. One example is Dialog Axiata, where the Chief Customer Officer manages the IT budget, giving direction on what areas to invest in, but it is still the CIO that makes the decisions about the solution and vendor.
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Of course, with power comes responsibility. Although the CMO definitely plays a key role in decisions about IT, it is questionable whether the final say should move entirely to the marketing area. IT still demands significant technical knowledge to understand how technologies are evolving in order to make the decision that will optimize the companys investment in the long term. Otherwise technical solutions that make sense to the CMO today might be siloed if they do not evolve in the same way as the other IT solutions the operator relies on. Additionally, the CIO is in a position to plan for solutions that can support not only one business need but several other applications across the business. Some CMOs may argue that they need to start hiring technical people so they have more support to make the right decisions. But if there is already an entire area just looking at IT, is there a case for creating redundant positions? Marketings attempt to have bigger role in IT decision-making is not just about strategic priorities, but much more to do with the frustration of not having most of its demands fulfilled. In the CTOs defense, the complexity of modernizing immense legacy systems and the pressure to optimize technologies and processes has resulted in priority being given to specific issues within one area before they are able to have more effective collaboration with other areas. Whats next? Marketings IT requirements are becoming much more complex and are demanding significant integration and collaboration. As customer experience management (CEM) and Big Data are becoming a top priority in operators agenda, IT decisions will need to be in line with the business cases and applications. Those areas demand integration and collaboration to allow decisions to be made based on real-time analytics of customer data (structured and unstructured) generated in different parts in the organization. This is different from the old CRM approach, where operators invested a significant amount of money in solutions without having a clear business case use for them CEM and Big Data investment are being driven by specific business applications. Therefore, investment is now not focused on buying a solution and then finding an application for it, but on finding a solution that will support a range of business demands. What should you do? Operators should to start allocating their budget by business proposition rather than by the area of the organization. The investment needs to be driven by strategic projects that involve different areas across the organization. The decision-making process needs to be orchestrated by the CEO, so all the initiatives are in line with the companys strategic goals. The business investment priorities should be decided by a committee formed of all the C-level executives in the organization (CEO, CMO, CIO, CTO, CFO, etc). The CIO should still be the main decision-maker for IT investment. The CIO has the requisite expertise to choose the right solution and vendors to have a future-proof IT roadmap and optimize the investment in the long term. However, this decision should be driven by a broader strategy, which aims to support the overall strategic goals of the company rather than the goals of one department. Related analysis

CEM 2.0: Evolution path for the ultimate customer experience CEM will enable operators to differentiate their offerings and innovate better Why operators need CEM, customer intelligence and analytics

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