The data mining process and SAS Enterprise Miner in Elisa Communications Corporation Jaana Järveläinen

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1 The data mining process and SAS Enterprise Miner in Elisa Communications Corporation Jaana Järveläinen SeUGI 19, Florence May 29-June

2 Elisa Communications Corporation International Customer-oriented Communications service provider What is Elisa?

3 Mission Elisa offers its customers communicationsbased services, experiences, information irrespective of time, place and means. What does Elisa do?

4 Elisa s Market Areas Principal market area is Finland From metropolitan expert to strong nationwide operator International activities in Germany in the Baltics globally - through selected products Where does Elisa operate?

International activities in Germany in the Baltics

5 Objective In 2005, Elisa is the leading provider of total communications-based services in Finland. In the Baltic Rim, Elisa has profitable and progressive business units in selected product and customer segments. At the global level, the Group is strong in selected business areas.

In the Baltic Rim, Elisa has profitable and progressive business units

6 Success is Achieved By developing long-term customerships By integrating technology and services By focusing on the reliability of services and operations

7 Elisa Group s Business MOBILE * Radiolinja Oy * Radiolinja Eesti AS GERMAN OPERATIONS * Elisa Kommunikation GmbH * City Carriers * Mobile distribution (Mäkitorppa) * Long-distance and international voice services FIXED NETWORK * Elisa Communications Corporation, parent company * Datatie Oy * FINNETCom Oy OTHERS * Comptel Plc * Mäkitorppa Yhtiöt Oy * Kolumbus Oy * Direktia Ltd * Heltel Oy * Epstar Oy

international voice services FIXED NETWORK * Elisa Communications Corporation, parent company *

8 Meeting the Clients Needs Development of business and services into customized solutions Creation of total solutions together with customers Active, responsible customer care Comprehensive, nationwide distribution network Value - customer orientation

with customers Active, responsible customer care

9 Continuous Progress Business expansion and rapid technological changes create a platform for: individual and team-based learning; upgrading of professional expertise utilizing expertise gained in Finland in international operations. special focus on developing the quality of customer relations Value - responsibility

expertise utilizing expertise gained in Finland in international operations.

10 Enhanced Technology, Products and Services Commoditized products per customer segment Advanced technological applications, e.g. mobile location services, electronic authentication systems, telematics applications Upgradal of networks for future needs broadband, web- and IP-based networking Extensive strategic R&D cooperation, in Finland and abroad Value - pioneering spirit

11 Solid Business Profitable customer relations ensure continuity of operations Flexible, fast reacting to market changes through updateable product and service portfolio Synergy from intra-group cooperation facilitates enhanced operations Cost-effective operations Value - profitability

updateable product and service portfolio Synergy from intra-group

12 Data mining process, background Personal Communications -SBA test used the Enteprise Miner during the last August - September, 2000 The idea was to find out more about Elisa s customers and why they choose to give up their contracts and telephone subscriptions

September, 2000 The idea was to find out more about Elisa s

13 What did we do? We tried to predict these cases as exactly as possible We tried to slice and dice the customer segment to find out the churn (who were those to give up our services in the consumer section) We wanted to see if the tool (Enteprise Miner ) was applicable to our current technology architecture and also if the mining itself shold be applicable to Elisa s DW strategy

segment to find out the churn (who were those to give up our services in the consumer section)

14 How did we do it? Part one: Created a mathematical model using data mining methods to predict our customers - not natural churn Part two: The churn was modeled so that every home customer was generated with the created model and the probability cause was that the client would stay as our customer in the future, too Part three: use the SAS script for new data

- not natural churn Part two: The churn was modeled so that every home customer was

15 What did we learn about the tool? Enteprise Miner tool supported the open access and management to third party databases (e.g. oracle, db2) and we could use our existing databases as sources It is expensive and needs more resources (analysts and IT people) It is a progressive and versatile product It could add our ability to analyze the existing data and information in our operative systems It could also be used in our CRM process

16 or from the process itself? As we think that quality through effective customer management is important key to successful customer service, we need to build the same quality in our data warehousing and data mining processes. To avoid pitfalls of the mining process (as we had not done it before), we used experienced consultant and the leading tool in the data mining market area that is Enteprise Miner -tool.

service, we need to build the same quality in our data warehousing and data mining processes.

17 Key elements in succesful DM project: business knowledge from the business analysts a clear case of where to try the mining process the central IT resources must be available the links to our existing data warehouses and other data sources must be available knowledge in statistics and of the tool itself (in our company or as we did: a consultant) data definitions were made and handled in business terms business people were enthusiastic

and other data sources must be available knowledge in statistics and of the tool itself (in our company or as

18 The future vision: We will use the data mining in our marketing, in analysing network transaction and in click-stream analysis in order to follow the development of our customer base and try to observe the early signs if anything strange happens in our markets

order to follow the development of our customer base and try to

19 Conclusions: Even though data warehousing and data mining architecture and tools are expensive to install and maintain, some investments are required to ensure that the right information and knowledge at the right time are delivered to our business management. We need tools to know our customers better and to serve them in any situations. The mining offers tool to predict and analyze our existing customer base.

at the right time are delivered to our business management.

20 Thank you! Any questions?

Elisa s mission statement Elisa transmits experiences and information based on telecommunications services irrespective of time or place.

Elisa s mission statement Elisa transmits experiences and information based on telecommunications services irrespective of time or place. Elisa s core values Customer orientation Responsibility Innovation