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May 15, 2013
Explore the opportunities and challenges inherent in the utilization of Big Data through an analysis of the telco sector.
State of the industryInsight into what your competitorsare already doing with Big Data
2Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.BCG: Thought leader on data and information
3Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.Your speaker: BCG expert for information management,business intelligence & big dataWork 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):FreelancerBackground and education• Diploma in Business computer science• PhD in economicsDr. Erik LenhardSource: The Boston Consulting Grouplenhard.firstname.lastname@example.org
4Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.AgendaBig dataThe big data opportunity for telco operatorsBig data challenges for telco operators
5Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.What is Big Data?Structured UnstructuredVolumeAmount of dataGiga ZetaTera Peta ExaVarietyRange of datatypes/ sourcesSingle ManyFewVelocitySpeed of data, I/OStatic Real-timeBatch"Big data is the ability to process andanalyze large amounts of varied dataand data sources together to generateactionable business insights""Data that surpassthe size that can bestored/managed/analyzed withgeneral databaseSW""Big Data is a next-generationtechnology and architecturedesigned to support rapidcollection, discovery andanalysis to enable valuecreation with low cost frommultiple, massive datasources"Big data attributes Big data definitionBCG definition of big data
6Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.Big data enabled by five Digital Economy driversMobileSocialCloudInternet ofthingsInternetFive Digital Economydrivers... ...Causing important shifts in digital ecosystem......And enabling aworld with trulyBig Data• ~80% Internet penetration in developed markets• ~2B Internet users globally by 2015• 1.3B mobile phones shipped globally in 2010, 250M smartphones• 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 by2012Personaldata(contents)LocationdataSocialdataBehavioraldataContextualdataTransactiondatafacebooktwitterYouTubeiPhone
7Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.Big data managementThe key is to turn Big Data into actionable informationMiningAnalyticsSearchEnrichmentBig dataconsumptionBig dataproductionRDBMSAnalytical DBNoSQL DBERP/CRMSaaSSocial mediaWeb analyticsLog filesRFIDCall data recordsSensorsMachine - GeneratedBig dataintegrationBig dataqualityStorageProcessingFilteringSource: BCG AnalysisGeneration UsageOperational IT AnalyticsInfrastructureProcessesPeopleInformation
8Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.AgendaBig dataThe big data opportunity for telco operatorsBig data challenges for telco operators
9Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.Telcos possess more valuable user dataTelcos with more completeuser data than OTT playersTelcos in better position totrace users than OTT playersFew pieces ofdigital informationon characteristics,attributes andpreferencesDigital identitycovers a widerange ofcharacteristics,attributes andpreferencesPerson is just a number, no addressing possiblePerson can be addressed in some way(e.g. through snail mail)Person can be addressed immediately(e.g. Google ads)Traceability?Source: BCG AnalysisTelcosTelcosamazon.comYouTubeGoogleMailtwitterLinked infacebookGoogleMail facebook
10Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.Framework for structuring the value of big data helps toidentify four distinct data business casesARPUACPU1234 1234 Generate new revenuestreams by newbusiness modelsManage costs byprocess optimizationsOptimize subscriberbase by basemanagementLift ARPU byup- and cross-sell#customersTotal revenueTotal costsBasic Telco revenue / cost framework Data business cases
11Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.Each business case with own characteristics on how toextract data valueUp- and cross-sellUse micro-segmentedsales and marketingapproaches based oninternal and externaldata• e.g. micro-targetedup-selling, pattern-based offerings, pre-paid billingremindersBasemanagementAnalyze and predictcustomer behavior andalign customermanagement• e.g. preventivechurn managementand winbacksProcessoptimizationsUse real-time data andadvanced analytics toimprove decisionmaking and optimizeprocesses• e.g. real-time frauddetection, preventivenetw. faultmanagementNew businessmodelsLeveragedifferentiation potentialto escapecommoditization• e.g. move fromstandard offerings /products to targetedservicesTap new revenuestreams• e.g. data brokerage,real-time advertising,mobile insurance1 2 3 4Traditional focus of marketing-driven BIBest-practice benchmarks provide guidanceMultitude of proven andcalculated measures inmany business unitsExplorative search foropportunities cross-enterprise
12Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.AgendaBig dataThe big data opportunity for telco operatorsBig data challenges for telco operators
13Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.Currently, most individuals are concerned about privacy, but neitherfully aware nor able to manage their digital identitySource: BCG digital identity survey (n = 3,107, August 2012)Concern Awareness ControlIndividualsprivacy stageShare ofEU onlinepopulation70–90%Regard at least onesector as privacythreat15–30%Aware that > 50% ofsectors collectpersonal data0–10%Ever done > 3/4 ofactivities to managetheir privacyHow does this impact their behavior?
14Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.Stated concerns by individuals do not result inbehavioral changeSource: BCG digital identity survey (n = 3,107, August 2012)Concern Awareness ControlIndividualsprivacy stageHighLowLowest HighestExpressed concernValue ofpersonal data =
15Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.Individuals with higher-than-average awareness of data usesrequire 26% more benefit in return for sharing their dataSource: BCG digital identity survey (n = 3,107, August 2012)Concern Awareness ControlIndividualsprivacy stage-20%-34%-53%-32%-25%-23%-13%-9%-30%-20%-24%CarmanufacturersCablenetworkprovidersRetailersLoyaltycardsHealthinsurancesMobilephoneoperatorsBanksPublicagenciesOnline shopsOnlinesearchenginesSocialnetworksHigh awareness of sector data collectionLow awareness of sector data collectionImpact of data collection awareness on willingness to share persector (%)
16Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.Consumers who are able to manage their privacy are upto 52% more willing to share data than those who arentSource: BCG digital identity survey (n = 3,107, August 2012)Concern Awareness ControlIndividualsprivacy stage+52%56%62%60%61%56%55%49%63%41%60500Lowest HighestPrivacy protection proficiencyWillingness to share, standardized (%)
17Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.Guiding principles for organizationsSource: BCG analysisControlTransparencyResponsibilityBenefitsProvide consumers optionsand controls to adjust sharingto their preferencesTake accountability for atrusted flow of dataIncrease data security in orderto safeguard digital identityCommunicate benefits andengage customers forsustainable data usage
18Copyright©2012byTheBostonConsultingGroup,Inc.Allrightsreserved.Telcos in position to straightforwardly test the big dataopportunity1. Specifybusiness caseDetail calculation withcompany specific data• Key assumptions• Currentinfrastructure• Current coststructureDetail infrastructuretransition caseIdentify realized anduntapped potentialCalculate opportunitiesand costs2. Big datahealth checkHealth check on• Business ownershipand datagovernance• Informationmanagementprocesses• BI organization• IT architectureAssess maturitydriving factors for• Up- and cross-selling• Base management• Processoptimizations• New businessmodels3. Developandstart POCRank businessopportunities• EBITDA impact• Time-to-market• Risk• Pre-requisitesIdentify case for quick-win proof-of-concept(POC)Define POC• Pre-requisites• Team• Project planRamp-up4. TransformtheorganizationDefine data-centricvisionDetail blueprint• Structure, roles andprocesses• InfrastructurePrepare strategicroadmap• Organizationalroadmap• Technical roadmapEstablish changeagency andtransformationprogramAvoid heavy upfront investment, follow broad,iterative approach – with a clear vision