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 enterprises 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
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 provisi oning, 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 end-
to-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
Evolution of Performance Analysis
Analysis
Maturity /
Complexity /
Cost Involved
Proactive Notification
Monitoring
What might happen?
Event Driven Alerts
Real-time Reporting
Whats happening now?
Dashboard, Balanced Scorecard and KPI Metrics
Analysis
Analytical Reporting
Why it happened?
Dimensional Analysis Drill Up / Down, Slice and Dice
Report
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 real -
time 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 e-mail. 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.
CSPs Performance Analytics
Product / Service Analytics
Promotion and Competition
Analytics
Wireline
Wireless Subscriber Analytics
Broadband
Usage Analytics
QoS Analytics
Revenue Analytics
Infosys View Point | 3
In todays 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 existi ng
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 / up-
sell 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 100 group VIP customers, Top 100 individual customers, and Top 100 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 customers 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
Total Number of Billable Customers
Call Type Description
Inbound Calls
Outbound Calls
Total Number of Calls
Number of Calls
6,157
6,850
13,007
Tuesday, 30 August 2005
1,233
Minutes of Usage
20,941.50
33,463.90
54,405.40
4 | Infosys View Point
Revenue Analytics:
Monthly Analysis
MRC
NRC
Taxes
USAGE
July 2005
$20,337.20
$4,216.90
$1,053.47
$1,497.42
August 2005
$30,564.72
$4,978.85
$1,486.66
$2,281.19
September 2005
$20,810.52
$2,631.20
$966.28
$1,681.03
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 100 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 KPIs 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
competitors product.
Infosys View Point | 5
The subscribers 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
05:00 PM 11:59 PM
06:01 AM 11:59 AM
12:00 AM 06:00 AM
12:00 PM 04:59 PM
TOTAL
74.00
508.00
21.10
21.10
8.00
79.00
International Calls
248.00
186.00
LD Calls Canada LD Calls - Carribean
2.00
69.00
LD Calls Inter-state
47.80
13.00
8.00
28.60
97.40
LD Calls Intra-state
72.60
150.30
1.00
113.70
337.60
CALL VOLUME
05:00 PM 11:59 PM
06:01 AM 11:59 AM
12:00 AM 06:00 AM
12:00 PM 04:59 PM
TOTAL
International Calls
24.00
10
LD Calls Canada LD Calls - Carribean
1
2
LD Calls Inter-state
14
7
3
LD Calls Intra-state
14
24
1
33
72
6
40
1
1
1
4
12
36
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
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
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 100 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

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 high-
performing 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.