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March 13, 2000

Telcos Turn To Analytical Tools To Stay In Touch
Business-intelligence capabilities provide a customer-service edge in a changing industry

By Candee Wilde

Related links:

The Drive To Analyze (2/14/00)

Business Intelligence: IBM And SAS Team Up (1/31/00)
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he telecommunications industry is in disarray. Mergers and acquisitions among major providers, the entrance of scores of upstart competitors, and potentially lucrative markets have telcos deploying new services and battling for new customers while protecting the ones they already have. Efforts to target the best customers with the right services can make the difference between success and failure--and in the newly competitive market, information is the most powerful tool around.

Telcos are using business-intelligence and customer-relationship management tools to ensure that they get the right products to the right customers at the right time. "Delivering products to customers becomes more complicated all the time," says Bill Comeau, senior director of database marketing services for Bell Canada International Inc. in Toronto. "This software can help."

Analysts agree. "The opportunities are the greatest in history, but service providers need very specific information to be able to compete effectively," says Richard Winter, president of the Winter Corp. consulting firm. That means developing a complete picture of customers based on their usage history--and potential.

And while telcos have culled enormous amounts of customer data from the Internet, as well as from billing, order-management, and customer-service systems, the information becomes a powerful decision-making tool only when it's combined with demographic information, Winter says. To that end, telcos are investing heavily in data warehouses, business-intelligence systems, and data mining tools.

Because carriers have found that customer loyalty is hard to come by, steps to personalize customer care, target marketing efforts, and tailor bundles of services can help them stand out in a crowded market. For example, a company evaluating the addition of broadband as a new service might use business-intelligence tools to analyze the market for potential customers, to learn about access to the network facilities required to provide broadband, and to consider metrics such as income and interest in new, higher-value services. Then the carrier can turn to CRM software to develop targeted marketing campaigns using direct mail, E-mail, call centers, or the Web, depending who the target customer is.

Mike Dykstra Photo of Dykstra by Ray Ng "The future is in the marriage of business-intelligence and CRM software," Comeau says. As telcos strive to become customer-focused, the entire company must focus on the customer. Linking CRM and business-intelligence systems will let managers evaluate consolidated, uniform information as they make decisions that affect customers--such as resource allocation, market segmentation, and service bundling.

Storing telephone call-detail records--as many as 100 million per day for a major provider--and Internet clickstream data requires massive amounts of storage, sometimes multiple terabytes. Transforming that much data into useful information is no trivial task. But the results make the effort worthwhile.

"We realize the most important thing is to organize our information by customer," Comeau says. Business-intelligence tools must be easy for employees to use, he says, whether they're information analysts, systems analysts, or nontechnical users. The goal is to create a unified system that can discover patterns in information and support development and marketing of products to customers.

"The key factors I consider in a business-intelligence solution are whether it can be deployed fairly universally to a wide set of databases and user communities," Comeau says. "It should have the ability to support power analysts and laymen. And the tools must fit into a process flow as seamlessly as possible." In other words, users should not have to spend much time inputting data or be limited by the amount of data the system can handle. Once the system has transformed the data into usable information, it should feed easily into other applications.

Bell Canada recently implemented NCR Corp.'s Worldmark Server and Teradata Relational Database Management System, a decision-support parallel relational database capable of supporting databases of more than 500 Gbytes. Comeau says he hopes the system will help Bell Canada build better customer profiles, based on call-detail records and customer and billing history stored in the database, to improve service to existing customers and prospects, retain customers, and improve its direct-marketing capabilities. Bell Canada can also reduce churn by building accurate predictive models to determine which customers are most likely to switch to a competitor.

Bell Canada also uses Angoss Software Corp.'s KnowledgeStudio, a data-mining tool that identifies significant relationships within data; Seagate Software Inc.'s Holos, which includes tools for customer profiling, planning, budgeting, forecasting, and performance-management; and SAS Institute Inc.'s Enterprise Miner, to identify patterns and group customers with similar characteristics, and create predictive target models that help determine which customers should receive a particular offer. "This helps us uncover possible product combinations that will appeal to customers," Comeau says. "We also use predictive models to help guide us in determining where we should place our network facilities."

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