Enterprise Performance Management:

Transcription

1 Enterprise Performance Management: Analytics to Measure the Performance of the Telecom Sector Sivaprakasam S.R. In the evolving telecommunications landscape, Communication Service Providers (CSPs) must address challenges such as order fallout, billing disputes, call failures, revenue leakage, churn of existing customers and new technologies, even as they compete with aggressive start-ups. CSPs are struggling to achieve better performance and better profitability. They need to undertake performance measurement of different operational parameters that are tightly linked with business metrics such as revenue stream and profitability. The business intelligence system enables the decision maker by providing information about the enterprise s progress in a selective area of business. To enable such analysis, the data has to be consolidated, cleansed and integrated into a single instance. Our view point focuses on the list of analytics based on our project experience. For more information, contact askus@infosys.com Aug 2009

2 Executive Summary In the current environment, CSPs are compelled to closely monitor enterprise performance to improve profitability rather than business expansion. Competition and evolving technology results in a new combination of products, services and price plans. New products and services make it imperative for new analytics (performance measures). Due to market pressure, CSPs try to generate metric reports such as the subscriber base, price plan switches, number of activations, number of deactivations, number of reactivations, switching services, switching devices, switching bundles and products, etc. Enterprises are spending most of their time to reconcile and validate the analysis since the information originates from disparate source systems. The trust factor of such metrics is very low because of data inconsistencies. Data consistency is mandatory for making effective business decisions to cope up with the competitive market. Why Performance Management? CSPs need performance management in two scenarios: Deciding the critical control measures while making a huge investment Analyzing the current progress and improvement in the progress Since the last decade, the communications industry has been evolving dramatically. To meet the growing customer demands, CSPs have made significant investments. In the present market situation, service providers are expected to reduce service costs without downgrading the service quality, innovate on service delivery, drive shareholder value and revenue growth and reduce time-to-market. CSPs should focus on increasing ARPU, meeting SLAs and reducing CAPEX and OPEX. They need to monitor the performance of various business parameters including order management, service provisioning, mediation and billing, etc. Typically, performance is measured with analytics that are directly linked to the progress of the enterprise: Cost of Customer Service and Support Pre-paid and Post-paid ARPU Pre-paid and Post-paid Minutes Of Usage (MOU) Churn percentage Subscriber acquisition costs Pre-paid and Post-paid Call Volume Customer Satisfaction Index Revenue through Cross-selling/Up-selling Revenue loss due to churn Overview of Enterprise Performance Management Enterprise Performance Management (EPM) is not the quality of the enterprise strategy, but how the strategy is being implemented and governed. The monitoring of enterprise strategies with the help of key performance indices, integrated reporting and metrics is termed as Enterprise Performance Management (EPM). An effective EPM results in active participation and bottom-line responsibility of all the stakeholders of a particular strategy, explicitly informs the management about the goals, initiatives and the periodical status. It provides a closed loop mechanism to understand whether the endto-end process flow improves the performance and enables the management to take necessary measures to meet the target. Based on our experience with various global service providers, we found that CSPs have dashboard reports, balanced scorecards, key performance indicators to monitor their performance. The EPM displays up-to-minute snapshots and alerts the decision maker to take necessary corrective measures. 2 Infosys View Point

3 Proactive Notification Monitoring What might happen? Event Driven Alerts Real-time Reporting What s happening now? Dashboard, Balanced Scorecard and KPI Metrics Analytical Reporting Analysis Report Analysis Maturity / Complexity / Cost Involved Evolution of Performance Analysis Why it happened? Dimensional Analysis Drill Up / Down, Slice and Dice Operational Reporting What happened? Query, Canned Reports and Search Tools Analysis Maturity / Business Value / Data Latency Over the past four decades, enterprise performance was analyzed with the help of Online Transactional Processing database (OLTP), Online Analytical Processing database (OLAP), and has evolved into instant data warehouse (real-time) as part of business intelligence initiatives. Continuous change and a competitive market compel service providers to move towards realtime performance measurement. Over time, organizations have realized that they need a wide range of Business Intelligence (BI) capabilities for reporting, analysis and monitoring. EPM empowers the CSPs to sense the trends (report), expose the root cause for a business incident (analysis), and continuous monitoring of alerts and business exceptions. A business user can refer the operational reports to analyze data and root causes with the help of analytical reports and receive alerts for critical changes via dashboards, scorecards and . At any step, end users can drill down or drill up or drill across to analyze different views of the data, explore anywhere in the database, and change their focus to monitor other Key Performance Indicators (KPIs) for continuous performance improvement. Reporting Operational Report provides information needed by the end user to find out what happened and decide accordingly. Analysis Analytical Report enables the end user to analyze why it happened, addresses the root cause in multiple dimensions, and assesses the enterprise performance. Monitor and Action The operational database is monitored continuously for business exceptions and keeps track of the key performance metrics. These alerts enable decision makers to take proactive corrective measures. CSP s Performance Analytics Product / Service Analytics Promotion and Competition Analytics Wireline Wireless Subscriber Analytics Broadband Usage Analytics QoS Analytics Revenue Analytics Infosys View Point 3

4 In today s telecom convergence and competitive market, CSPs have to focus on scientific and accurate analysis of their terabytes of data. The diagram highlights the critical business factors that impact the CSP business. In the following sub sections, we will discuss subscribers, revenue, QoS, network utilization, marketing and usage analytics. Subscriber Analytics: CSPs will be interested in monitoring the following performance metrics - total number of customers, number of active activations, number of customers by segment, number of customers with nil usage, number of deactivations, and number of reactivations with respect to time, geography, products, service, customer segment, sales channel, and price plan. CSPs may also be interested in analyzing customer profitability, loyalty, churn and retention to improve their revenue from existing customers. The figure depicts the number of new registrations vs. number of disconnections of VoIP customers, by date, for an U.S.- based Internet service provider. Using the above chart, the CSP can monitor the customer base KPI. Customer cross-sell / upsell analysis helps CSPs to identify the selling opportunities in complementary products, and determine the appropriate terms and conditions for converting these sales opportunities. Service providers need to analyze customer price plan / product / service switching behavior, VIP customer, Top 00 group VIP customers, Top 00 individual customers, and Top 00 high usage customers to know their customers behavior and take proactive measures to increase revenue. Usage Analytics: Typically, CSPs analyze their Call Data Records (CDR) to understand their customer s network usage behavior, content usage, inbound / outbound roaming, data service usage, wireless data and usage, wireline usage and data, etc. CDR analysis provides key metrics such as average call duration, frequently called numbers, number of calls, type of calls, number of inbound calls, number of outbound calls, Minutes-Of-Usage (MOU). Analyzing call detail records provides insight into call origin and destination points, how and when the network is used. It can also help to roll out new services and price plans that will increase the call volume and MOU. Network usage and service usage analysis help the service providers understand whether their networks are optimally utilized. Over-utilization of network will deteriorate the QoS, in turn impacting customer satisfaction, revenue and new acquisitions. The table below depicts the call traffic and MOU on a given day for a U.S.-based CSP. Analysis Date Tuesday, 30 August 2005 Total Number of Billable Customers,233 Call Type Description Number of Calls Minutes of Usage Inbound Calls 6,57 20,94.50 Outbound Calls 6,850 33, Total Number of Calls 3,007 54, Infosys View Point

5 Revenue Analytics: Monthly Analysis July 2005 August 2005 September 2005 MRC $20, $30, $20,80.52 NRC $4,26.90 $4, $2,63.20 Taxes $, $, $ USAGE $, $2,28.9 $,68.03 CSPs want to maximize their revenue with minimal investment, which compels monitoring and analysis of Profit and Loss (P&L), activity-based costing, Revenue Assurance billing to CDR reconciliation, uncovering billable interconnect, billing analytics with B2B counterparts and sales channel partners, credit and collections management, total revenue, Average Revenue Per User (ARPU), customer payment, outstanding balance, Customer Credit Risk Profile, detecting improper switch behavior early and tightening switch-to-billing management. With the help of close auditing and revenue analytics, CSPs can detect deceptive activities by validating business rules and profiles and finding new patterns quickly to prevent revenue leakage. Monthly revenue analysis of a U.S.-based ISP is shown below. Using the table and chart below, the CSP can analyze the revenue contribution between MRC, NRC, tax amount and usage across the last three months. This KPI illustrates revenue growth. QoS Analytics: Enterprise data is transformed into valuable information to help decision makers understand customer satisfaction, call behavior, network usage, and network quality. QoS is measured by customer satisfaction, which in turn depends on the quality of service as perceived by the subscriber. The gap between expectation and perception of service is an indicator of the dissatisfaction level. The customer satisfaction indicator is influenced by KPIs such as customer service, elapsed time to service, missing SLA, number of complaints, complaint types, complaint status, uncompleted Voice Traffic, fault incident rate, mean time to repair, network availability, call setup success rate, service access delay, signal strength and voice quality, call drop rate, billing complaints per 00 bills issued, and period of refund to customers. The statistics below represent the order provisioning performance of a U.S.-based CSP. The chart shows the trend between the KPI s number of new orders and orders that are booked for local number portability. Number portability is the result of bad quality of calls. Product / Service Analytics: CSPs used to combine their existing products and services to create or suspend a wide range of bundles to meet subscriber needs and keep them satisfied. To maximize the benefit of such a strategy, CSPs have to effectively analyze their products and services, usage behavior, payment behavior, network capacity, price plans, promotions and comparison against the competitor s product. Infosys View Point 5

6 The subscriber s demographics, statistics, billing history, usage patterns of a particular customer segment are taken into consideration to create new services in the product development cycle. The tables below enable the CSP to understand the subscribers call behavior such as call type, calling time and how many calls exceeded the call volume prescribed by the price plans to which they have subscribed. The analysis helps in rolling out new price plans for better subscriber service. MINUTES OF USAGE International Calls LD Calls Canada LD Calls - Carribean LD Calls Inter-state LD Calls Intra-state 05:00 PM :59 PM :0 AM :59 AM :00 AM 06:00 AM :00 PM 04:59 PM TOTAL CALL VOLUME International Calls LD Calls Canada LD Calls - Carribean LD Calls Inter-state LD Calls Intra-state 05:00 PM :59 PM :0 AM :59 AM :00 AM 06:00 AM 3 2:00 PM 04:59 PM TOTAL Marketing Analytics: In a competitive market, CSPs have to perform an intensive analysis of customer and market behavior to retain existing profitable customers and customers who are most likely to defect through promotions, offers or personalized VIP services provided by competitors. To implement this strategy, CSPs need to analyze the sales and marketing data to segment the customers by demographics, price plans, usage patterns, billing payments and other factors. They should also analyze their information to identify the list of customers to be targeted for campaigns, channel to contact, product / service, promotion to be offered and customer profiles. Apart from the above analysis, KPIs such as the number of customers activated by the sales channel, average number of calls, minutes of usage, call duration, percentage of income, product bundling, promotional pricing, cross-selling, up-selling, etc., may be of significant interest to CSPs. The figure below shows the sales comparison between various ordering channels for a U.S.-based ISP. Using this KPI analysis, the CSP can monitor which channel is performing well. 6 Infosys View Point

7 Network Utilization Analytics: In the present convergence market, service providers have to closely monitor their network traffic for better customer satisfaction and optimum utilization, since it is shared between GSM, GPRS, 3G, ATM, VoIP, Internet, IP-based media including Internet TV, video chatting and multimedia. Network administrators require a sophisticated alerting mechanism and advanced performance management tools for proactive decision making and rapid changes to prevent degradation in QoS and to assure optimum network utilization. Analysis such as network traffic analysis, network planning analysis, exchange load analysis, peak and busy hour analysis, service-based analysis (GSM, VoIP, Broadband, ADSL, VoIP, ATM, etc.), QoS analysis, time series analysis, network utilization analysis and metrics such as switch operations, call routing, call volume, calls failed, delayed calls, threshold crossing volume, and threshold crossing severity allow CSPs to analyze the network operations, generate dashboard reports and alerts and take rapid decisions. The trend chart displayed is a classic example of such analysis to understand the network behavior between total call volume and completed call volume. The analysis helps in understanding the volume of calls dropped on a particular day. The KPI analysis helps CSPs to understand infrastructure utilization, and how many successful calls, how many total number of calls occurred on a hourly basis. Conclusion Over the last four decades, CSPs are evolving in analyzing and utilizing their terabytes of valuable business data to increase their ability to react instantly to market trends, to make rapid decisions, optimize product and service bundling, minimize the elapsed service time, maximize customer satisfaction and understand customer choice and behavior. EPM effectiveness completely depends on the underlying data warehouse, which has to provide a competitive advantage through rapid and dynamic solutions to decision makers. Infosys View Point 7

8 Appendix Real-Time KPI Subscriber Analytics Number of subscribers Number of activations Number of deactivations Number of customers by segment Number of customers with nil usage Number of reactivations Churns due to lack of network Churns due to unaffordable price Churns due to billing disputes Usage Analytics Inbound call volume Inbound MOU Outbound call volume Outbound MOU Average call duration Number of calls during peak hours Total number of successful calls. Total number of dropped calls Revenue Analytics Profit & Loss Activity-based costing Billing to CDR reconciliation Uncovering billing interconnect Total revenue ARPU Customer payments Outstanding balance Total MRC / NRC / Tax QoS Analytics Average Customer Satisfaction Index (CSI) Elapsed time to service customer Number of services missing SLA Number of complaints by type Number of open complaints Fault incident rate Average network failure Call drop rate Billing complaint per 00 bills issued Business Significance To monitor the customer base growth and perform trend analysis. Helps to know the new connection trend by time, geography, etc Alerts the management to take corrective measures. Management can campaign the low customer segment group. CSR can approach those customers to understand issues. Management can know the customers and why they join back. CSP can monitor this KPI and improve the network coverage. CSP on monitoring this KPI, introduces a new plan or halts the price plan. Alerts the CSP to modify the billing policy, etc. Helps to monitor and know the trend of inbound call traffic. To monitor the ratio between inbound and outbound MOU. To monitor and know the trend of outbound call traffic. To monitor the ratio between inbound and outbound MOU. Helps to monitor the call duration by time slots. Helps CSP to improve the infrastructure or roll out new price plan. Informs the CSP about successful call trend by time, geography, etc. CSP can monitor successful call trend by time, geography, etc. CSP can monitor the profit and loss incurred. Identifies activities and assigns the cost of each activity. Helps the CSP to know about revenue leakage. Helps the CSP to know about revenue leakage. Displays the revenue growth and trend to the management. Monitors the ARPU trends and takes steps to increase the same. Informs the trend of payments by billing cycle, segment, etc. Analyzes the outstanding payment by segment, customer type, etc. Displays the MRC, NRC, tax contribution in the total revenue. Alerts the CSP whenever CSI goes below expectations. Impacts the CSI, informs the CSP about KPI progress. Impact on customer service due to failure in meeting SLAs. Helps the CSP to know about the complaints distribution by type. CSP can monitor the status of complaints to meet the SLA. Fault incidents directly impact the CSI so that CSP can monitor it. CSP can analyze the network failure by switch, site, time slot, etc. Number of calls dropped related to total call volume should be less. More billing complaints induce churn so that CSP can monitor it. 8 Infosys View Point

9 Real-Time KPI Marketing Analytics Number of activations by channel Number of calls by partner Average MOU by partner Revenue percentage by partner Cross-selling Up-selling Promotional pricing Business Significance Helps to know the contribution of channels and reward highperforming channels. Partner can be rewarded to improve the business performance. MOU distribution among partners helps to rate the partner. Informs the CSP about the revenue growth earned from partner. Helps to analyze any additional products that can be sold to customers Helps to inform customers about profitable products and services. Activations / deactivations by promotions display trends. About the Author Sivaprakasam S.R. is a Principal Architect and mentors the Database and Business Intelligence track in the Communication, Media and Entertainment business unit. His interests include Enterprise Data Modeling, Enterprise Data Integration, Enterprise Data Warehousing, Enterprise Data Quality Management and Semantic Data Integration. He can be reached at sivaprakasam_s@infosys.com.