When CSPs think of big data their first thoughts are of the network and the challenges associated with managing it. However, big data isn’t just about CSPs’ network management issues, it provides an opportunity to redefine how they interact with customers, partners and across internal departments. Here, Monica Ricci argues that CSPs should lose their fear and embrace the potential of big data.
Big data is the natural consequence of the exponential growth in communications-enabled devices interconnecting across ever-more powerful and ubiquitous data networks. With Ericsson and other network equipment manufacturers predicting many billions devices of devices connecting with the network over coming years, generating more frequent and more complex interactions, the number of anticipated data transactions is truly staggering.
It is only natural that when Communications Service Providers (CSPs) think about big data, their first thoughts, stemming from a traditionally network-centric viewpoint, are of the network. They see a need to manage extreme growth in subscriber data usage, carefully manage investments in capacity, and process network records more efficiently to ensure that revenue leaks are plugged and profits maximised.
But it’s not all about threats and challenges, and it’s not all about network management. Big data is a topic that applies to many industries, including manufacturing, utilities, retail and healthcare; verticals that are seeing great opportunity in the increasing capability to share data across advanced networks.
Industry analysts, trade and general media have made big data a topic of the day, and not without cause; CSPs are facing strategic decisions concerning the management both of data volumes and of the opportunities and insights that may derive from advanced data analysis.
How big is big data?
To get a feel for the ballooning growth of big data challenges – and solutions – it may be helpful to try to put some definitions and metrics around the phenomenon.
Starting with what big actually means, the framework used by many analysts, including Forrester and Frost & Sullivan, seems to work well. This describes data as big if it demonstrates exceptional growth in dimensions referred to as the ‘Three Vs’ of big data – data record volumes must be growing rapidly, they need to be collected and processed with increasing speed (or velocity), and they often represent a rapidly growing number (variety) of transaction types.
In reality, most big data scenarios are large in more than one dimension. So broadly, big data is about managing rapidly growing volumes of increasingly complex transactions at accelerating speeds. And while there is no specific benchmark that determines whether data should be considered big, it seems to be widely accepted that big data sets are those that are growing at a rate of at least 40-60% annually.
Taking a more general view, McKinsey Global Institute described big data in mid-2011 as “anything that is outside of the operating parameters of the typical dataset”.
Think about any data sets or operational processes that are well managed in your business today. Project your data volumes doubling year on year, and complexity increasing substantially due to additional service information, location data or customer parameters. Imagine processes need to be executed in half the time, just to get through the volumes of transactions. If this vision of the future highlights a point where your systems, your operations or your ability to use customer data starts to buckle, then you’ve identified a big data challenge.
Importantly for the software industry, and another indicator of growth in interest, IDC predicts that the market for big data solutions – which includes servers, storage, systems and services – across all global industries is growing at almost 40% annually. They forecast this market to reach nearly US$17 billion in spend by the year 2015, at a growth rate seven times that of the overall IT industry.
How big are the benefits?
We know that big data is a processing challenge, but CSPs can gain encouragement from the way that transmission and analysis of large amounts of service and customer data has greatly benefited other industries.
In the healthcare industry, the term big data is associated with the growing digitisation of medical records, x-rays and scans that can now be easily transported and shared among networks of providers, practitioners, insurance carriers and patients. The end result everywhere is faster and better-informed decisions about treatment, resulting in better quality healthcare for the individual at lower cost.
In utilities, big data is largely associated with the rollout of smart grid infrastructure that enables detailed meter data to be constantly polled, providing insight into energy utilisation, and enhanced monitoring and control, ultimately down to the appliance level.
CSPs across the globe have long been grappling with burgeoning network traffic, and the issues and implications are well understood, if not necessarily well managed. But the opportunities that extend from big data reach well beyond efficient management of network traffic. Analysys Mason recently commented that mobile operators stand to gain particular advantage from the size of their subscriber base, the amount of data that they hold about their subscribers and the diversity of that data, including usage records, financial history, payment options and preferences, mobile commerce activity, and location-based data from their movements throughout the network.
Service providers can derive considerable actionable intelligence from these sources. In particular, aggregating raw data into comprehensive customer records, and applying sophisticated analytical tools, will empower CSPs to tailor content and services much more closely to customer preferences and improve their overall service experience.
What’s big for the CSP?
Within a CSP environment, there are numerous processes that are both critical to, and derive benefit from, better data analysis. Improved understanding of operational processes related to customer service and financial management – including aged debt and churn – help the CSP to further automate and drive efficiencies out of common tasks. But big data is also about better understanding how and when a customer uses which services, enabling the CSP to better serve the customer and gain greater value from an ecosystem where more and more content and services are coming from third parties. Customer records, usage records and billing records are now used not only by the CSP, but are often by external parties and partners – generally in aggregate fashion. Data-driven insights can lead to value-based price plans, high-performing advertising models, an enhanced customer experience, and data-driven decisions that improve operations across the board in a CSP environment.
Just as we struggle to quantify how big is big, the potential benefits of deploying a big data strategy are not always easy to define. To take one example, however, McKinsey Global Institute, in that same 2011 report, estimates that the application of location-based data alone will generate US$100bn of value to CSPs in the next ten years. Such location data-driven services already exist today, of course, but will greatly improve in the future as the data that fuels them is better processed, better analysed and better understood.
Head in the right big direction
The good news is that CSPs are already moving. Judging by the increasing frequency and urgency of planning sessions and project launches by our CSP customers, CSG has observed big data strategies becoming a greater priority for every service provider. But don’t feel alone if you don’t think your organisation has taken steps to manage big, or even growing, data; many discussions are exploratory, looking for best practice examples from industry peers and vendors – these still feel like early days.
Ultimately, while processing and management of very large volumes of data is a technical challenge, the insights that stand to be derived from that data offer great potential to increase a CSP’s knowledge of its business, enabling the CSP to better direct its network investment, improve the efficiency and lower the cost of operational processes, deepen its knowledge of customers’ behaviours and needs and enhance the customer experience, increasing both loyalty and lifetime value.
The author, Monica Ricci, is director of product marketing at CSG International
