This weblog has referred many times to the potential of operators to understand their customers given their role as network provider. In this article I go a little deeper into the technology behind that statement, business intelligence.
Business Intelligence (BI) refers to software techniques used in spotting, extracting, and analyzing business data, such as sales revenue by products or departments or associated costs. BI provides historical, current, and predictive views of business operations. Common functions of BI include: reporting, online analytical processing, analysis, data mining, business performance management, benchmarking, text mining, and predictive analysis.
Business Intelligence supports better business decision-making. Thus a BI system can be called a decision support system (DSS). Though the term business intelligence is often used as a synonym for competitive intelligence, because they both support decision making. BI uses technologies, processes, and applications to analyze mostly internal, structured data and business processes. While competitive intelligence is done by gathering, analyzing and disseminating information with or without support from technology and applications, and focuses on all-source information and data (unstructured or structured), mostly external to, but also internal to a company, to support decision making. So BI and CI need to work in partnership – for operators CI on the web service providers is key as they are setting customers’ expectations.
BI is a well established business for many industries. However, telcos have been slow to adopt business intelligence. For example, an operator can use BI to work out appropriate offers to its customers, or to better plan wireless resources, or to rationalize bundles, offers or products to maximize profitability.
BI is becoming a big business, its the core of most service providers’ businesses, not just the web guys (e.g. Amazon) but also banks, financial services, retailers, automotive, etc. Business intelligence is the core of Google’s business. IBM, HP, Oracle (top three IT solution providers) all have business intelligence as a top strategic priority. The market for BI tools has defied the recession to show revenue growth of 22% in 2009. New figures show that the BI was $8.8 billion in 2009 and expected to reach $11B in 2010, and potentially reaching $20B by 2015. With Telco making up roughly 25% of the 2015 revenue ($5B.)
Oracle and IBM have well developed products and more importantly BI practices. IBM has built the industry’s largest Analytics practice, with 4000 consultants, mathematicians and researchers; as well as software capabilities bolstered by acquisitions such as Cognos and SPSS. The are also open source alternatives to Oracle and IBM, e.g. Jaspersoft and Pentaho.
IBM Analytics practice shows the critical issue, gathering the data isn’t the problem, its drawing meaningful conclusions out of the data is the hard part. Telecoms remains poorly served, not through a lack of start-ups and professional service outfits trying to make a business in telco-focused BI. Rather operators remain overly cautious about looking into their data and acting on it. The tools are there, the analysis still requires work, but there’s no reason for the continued inaction.