Monday, February 18, 2013

[Guest Post]: Transforming Subscriber Data into Business Opportunities – Part 1

By Stephane Honore*, Chief Technologist, Openwave Mobility

As mobile operators shift from network- to subscriber-oriented models, analysts keep predicting subscriber data management (SDM) market revenue growth for SDM software and services. During the past five years as mobile data growth went through the long-expected hockey stick pattern, a number of services or applications were touted to become the key drivers for SDM implementations: mobile advertising, data-as-a-service, privacy management, policy and charging, Wi-Fi offload and VoIP to name a few. Recently convergence, LTE network modernization and the rise of the identity economy are re-igniting SDM market growth expectations.

SDM objectives and benefits are often looked at only from a technical and operating angle, reflecting the immediate operator need to reduce the cost of managing and maintaining multiple subscriber databases, as well as their desire to create a consolidated view of the subscriber across those data sources. 
Nevertheless as discussed in the first part of this guest post, SDM has the potential to shake the carrier political and organizational structure around user data management, a necessary step for unveiling monetization opportunities beyond the existing SDM use cases.

Organizational shake-up 
Figure 1 - Some of the 4G elements reliant on user data

Operators are well aware that user data is spread across their mobile broadband network: CRM information, billing details, subscription plans, web portal authentication, authorization for 3G or WiFi access, policy and charging user profiles, IMS-related service definition and personalization for VoIP features such as presence-based call forwarding. The list grows as new services are launched as all subscriber-related information and functions in IT, core and value-added service (VAS) networks fall under the scope of SDM.

SDM typically summarizes the problem of the distributed nature of data in multiple parts of the network as information islands. While this is true, it wouldn’t constitute a fundamental issue if this data were not to be used by an increasing number of components relying on the user information in an interdependent fashion. The core challenge lies in the fact that as subscriber-driven business models transform how carriers operate, more network elements will rely and interact with subscriber information in real-time. In a 4G network for instance, more than a dozen 3GPP components can easily be identified as interacting with user data information to perform their task (Figure 1). Add IT and CRM components and this number doubles. Obviously this is an unsustainable situation that leads to increased costs, complexity and lengthy network implementations which ultimately results in missed opportunities for the operator.

But even when the benefits of SDM are well understood and accepted by the operator, the cost of initiating a data consolidation initiative often appears as a major road-block. Ironically this cost is not measured in financial terms, but in human or organizational costs. Because user data is spread across the entire operator organization and because ownership of data is synonymous with organizational power, breaking silo implementations in favor of centralization often ends up as a political battle within the operator entity. 

However, avoiding or postponing consolidation comes at the expense of the network infrastructure becoming more cluttered, degrading further the relationships between organizations. What then happens is the marketing or services department finds out the policy and charging infrastructure (PCC) is out of sync with the IT user data, or federated implementations no longer meet throughput growth requirements, or the core network and IT departments suddenly realize their service and marketing counterpart incorrectly specified which user data should be considered as an information asset and which is just digital noise.
By addressing the user data management architectural challenges, SDM actually becomes a catalyst and vector to improve both human and political management around user data leading to positive organizational outcomes.
Extracting the financial value
Cost-reduction and network simplification are important aspects of SDM, but the real goal is to transform user data into a financial asset. Use cases touted by SDM constitute today’s low-hanging fruit generated by the effect of user data consolidation. For instance: 
  • Improving operators’ understanding of subscribers increases operator accuracy in targeting markets and reinforces the operator’s role in the value chain
  • Delivering real-time engagement in the Internet era of immediacy leads to improved end-user experience and reduced churn
  • As data consolidation progressively grows in scope and in the nature of user data, so will the value towards 3rd parties for operators looking at exposing their user data assets through open APIs
However, this is just the beginning. If we take a more holistic view on how subscriber data is being managed and leveraged across different industries like the Internet, insurance or others, we realize that mobile broadband operators are just in their infancy in the way they deal with user data.
Over the past decade, major Internet players have grown their value by extracting increasingly precise user information through various profiling techniques. It has been used to improve their online merchandizing efficiency under the form of advertising or social recommendations. Recently more refined and subtle approaches, such as “A/B testing”, have appeared. This has rapidly become a standard (but seldom advertised) means through which some Internet companies improve their online products.

A/B Testing can be summarized as a framework for managing focus-groups being tested in real time. Without notice, a set of users are presented a slightly different version of a given web page or content and their behavior compared against the remaining users. If the new version gives better results in terms of clicks, longer visits, or more purchases, it will displace the original; if the new version is not leading to positive outcomes, it is quietly phased out.
A/B methodology is just an example of how the dynamic use of user data for defining and validating relationship between user segmentation can translate into potential monetization opportunities. If mobile broadband operators believe user data will be at the heart of their business decisions in the near future, they should look at SDM solutions that can yield high impact on their new services launches. Rethinking user service engagement and life-cycle campaign management is a first step in the right direction. In a context where market campaigns are traditionally rolled out through lengthy projects and massive launch cycles, having the ability, technically and organizationally, to pick and choose a limited set of real users based on their subscriber profile, launch the service in a targeted manner, measure the outcome and reiterate quickly is a great way to transform user data knowledge into business opportunities.
In Part 2 of this guest blog we will examine how the principles of Subscriber Data Management discussed above play out in technology decisions, standards development, and actual operator deployments.

*Stephane Honore is Chief Technologist for Openwave Mobility with over 15 years’ experience in the telecommunication industry, responsible for contributing to the technology and product strategy of Openwave Mobility’s mobile internet products. He is also responsible for the SDM product management. Prior to his current role, Stephane held a wide range of leadership roles within the Sales, Engineering and Product Management organizations

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