By: Dennis Landscheidt

When it comes to business, sometimes bigger is better. And to get bigger you need better revenues, faster processes, stronger profits, more customers, larger products, or harder working employees… you get the picture. All of this ambitious big thinking results in one thing: Big Data.

Big data doesn’t have to be a burden; it’s an opportunity. Big data can arm companies with individual data points, produced on a daily basis, that can be leveraged by executives to inform decisions that will help them reach their growth goals, whatever they may be. Big data can tell the story of yesterday, last week, last month, last year. Executives can read this and predict what will happen tomorrow, next week, next month and next year. A retailer can see that yoga pants sales increased 5 percent yesterday in the flagship store in Boston, so next year it should cut beachwear firm-wide. An auto company can use its field research data to gauge changing consumer preferences on gas consumption and decide to cut next quarter’s marketing budget for a new gas-guzzling SUV. A manufacturing firm can look at data provided by company sponsored fitness trackers to see that its most productive employees want wellness-related benefits, not annual bonuses.

For telcos the options are endless. However, one way that telcos can use big data is by drilling down from the huge volume of data to individual data points to see which specific customers, plans or promotions are most profitable or unprofitable and – most importantly – why.

Why CSPs Must Leverage Big Data Now

Leveraging big data to increase profits is a critical issue for communication service providers (CSPs), as increased competition in saturated markets coupled with disruption from digital transformation is forcing them to refocus from top-line to bottom-line growth.

Today’s increasingly regulated telecommunications environment has led to declining revenues and margins. In an effort to compete, telcos have introduced a large number of tariffs and services, which of course create even more complexity (and data). It also makes it increasingly difficult to determine which customer and which tariff is contributing positively or negatively to the bottom line and which key factor or element differentiates it from others.

Lost profits and revenue leakage often show up as the misuse of tariffs, stacking of customer discounts, and lack of understanding of the profitability of individual customers and tariffs. In order to tackle these challenges, the drivers behind them need to be understood in a timely manner.

Understand Profitability 

Telcos need the ability to understand profitability at the level of the individual customer and by specific offers so that they can focus on high value plans and customers in order to drive revenue and eliminate unprofitable products. We recently rolled out a product called SAP Big Data Margin Assurance, a solution powered by SAP HANA. Co-innovated with Vodafone, the solution is designed to help telcos optimize overall revenue by combining big data with traditional financial processes.

A central component of the SAP Big Data Margin Assurance solution is a standardized data model based on TM Forum industry standards. TM Forum, the global industry association for digital business, provides a suite of best practices, digital tool-kits and standards that are widely adopted by digital and communications service providers and global enterprises. Stakeholders from SAP, TM Forum and the telecom industry are actively collaborating to define a Big Data model for the telecom industry that will be based in part on Big Data solutions from SAP.