Business intelligence, or BI, is a business management concept that first gained prominence in the 1980s. It embraces applications and technologies that are used to gather and analyze information about company operations. Business intelligence systems provide companies with a comprehensive knowledge of the factors that impact their business and help them make better business decisions by analyzing data from inside and outside the organization.
Telecom has been reticent to embrace BI but, rapid market changes during the past decade, have radically changed attitudes. A greater shift in focus toward the customer makes BI a prerequisite for all telcos facing competition. So now there is a real push for the technology as operators embrace it as a strategic tool to help them remain competitive as they differentiate themselves through customer service. There is now much more urgency to extract more intelligence out of routine business information.
According to the Yankee Group, telecom carriers worldwide, including wireline, wireless and cable operators, spent $4.4 billion on BI software, services and system integration last year. That figure is expected to rise by 18.2% to $5.2 billion in 2007, as BI plays a bigger role in the telecom industry. While North America and Europe remain the most well established markets for BI, demand for BI in the Asia Pacific region is on the rise.
Bigger role in China
In China, for instance, BI tops the agenda of the four major Chinese telecom operators, China Mobile, China Unicom, China Telecom and China Netcom, as they move to another stage after allocating significant resources installing systems for their BSS and OSS.
China Mobile, the world's largest mobile operator measured by subscribers, leads in the use of BI with more than 70% of the group's subsidiaries building their own data warehouses. The three other operators remain in the early stage of BI implementation, with only a handful of their subsidiaries building the necessary data warehouses.
Kevin Ma, head of marketing at Asia Info Systems, which recently upgraded the BI system for Beijing Mobile, says BI is beginning to play an important role in China as competition in the telecom market intensifies, especially in the mobile sector, where the number of operators is expected to increase from two to four when the Chinese government issues 3G licenses.
'Although the China mobile market is now still experiencing growth of new customers, the market will soon become saturated, and the focus of competition eventually will shift to customer retention,' he says. 'With two more new players set to enter into the market, mobile operators realize that it's vital to extend customer lifecycle value and retain customers, and BI will be crucial to help them to do so.'
Ma says Chinese operators use BI tools mostly to address business-related and customer-facing issues, such as churn management, even though it can be more widely used across different functions ranging from customer care and operational support to network operating centers.
He adds Chinese operators use BI tools to obtain a better understanding of their most important customers and to examine and analyze customer behavior to create successful products. For instance, Ma says, when an operator wants to launch a new pricing package, it could use BI to predict whether or not the package will gain acceptance from the customer segment most likely to buy it.