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ROCware’s bird’s eye view on what’s really happening with customers, profitability and the network

19 December 2012

Subex has expanded its concept of the ROC — the revenue operations centre — so that operators can predict when and why customers churn, forecast the impact of new products on profitability, and understand when, where, and why network capital expense should occur. Co-sponsored feature: Subex

Read more: Subex big data telecoms big data revenue operations ROCware analytics


                           
John Brooks: Our goal is to identify situations that will impact
operators and their customers before they become problems, ]
so that operators can get in front of the problems before the
customers even know about it  
                       
There's a CFO that John Brooks, vice president of product management at Subex, knows - he won't say who, because he keeps client details strictly confidential - who has saved his company, a significant operator, about $20 million by identifying under-used network equipment.   
     
There's another one whom he also can't name who lost several million dollars in one month because one of the operator's partners found another way to route content to end users.   
     
"He found out only when he got a bill", because the bilateral agreement that covered the traffic was no longer as balanced as it had been previously. "He had no visibility of what was happening. The operator just didn't see it coming."   
     
Understandably, the CFO was not happy. "Our analytics could have shown him what was happening the same day the deviation started, predicted the impact and automatically issued alerts. The company would have seen what was happening and adjusted their business to avoid or minimise the loss.   
     
"Something could have been done at the time, but weeks later it's not so easy to tackle," says Brooks.   
     
And there's a third operator - again, no names - that invested over $40 million worth of network assets, only to find they were all still stuck in warehouses six months later, unused.   
     
"Operators today are acutely aware of concepts like time to value, and return on assets; without an accurate analytics mechanism to holistically monitor all stages of asset lifecycle, procurement and daily network changes, operators have virtually no accurate visibility into those factors."   
     
In several cases, Subex's programme has identified millions of dollars worth of equipment that seem to have disappeared entirely. "The warehouses think those assets are deployed, yet there is no sign of them on the network," says Brooks. That's something plaguing most operators today - but now they can tighten up management of the supply chain of spare parts.   
       
     
Revenue operations centre   
     
It's a surprising six years since Subex introduced the concept of the revenue operations centre, the ROC, on which - much developed - the systems that Brooks is describing are built.   
     
"Our concept of the ROC has evolved considerably in the past three to four years," he says. It was a revolutionary concept from the start - giving telecoms operator executives the ability to monitor revenue-critical aspects of the network and act on them in real time.   
     
"At first the ROC was focused on metrics - and we used the metrics for applications such as revenue assurance, fraud detection and cost management." It was an excellent system - and still is - for identifying problems that have already happened.   
     
The significant change in the approach took place when Subex started using the data not just to analyse past behaviour in the network but to predict activities and vulnerabilities into the future. This approach is founded on analytics and insights. "What can I predict will be the effect on existing products and customers? What insights can I derive from that prediction and effect?"   
     
Subex took the original unifying platform of the ROC and built it into a suite of products call ROCware, with built-in analytics.
"We have an approach that focuses on outcomes - not just tools. Our advantage is that we understand telecoms. All we've done for the past 20 years is telecoms and the financial aspects that drive operators' businesses every day."   
     
By understanding the industry and its vital data, Subex is able to understand the parameters. "We know what features you're trying to analyse. ROCware includes tailored analytics to answer the problems the telecoms industry wants to know about."   
     
Take churn, for instance, says Brooks. "Everybody has a churn solution. In the past two or three years I've talked to 40 or 50 operators. They have a churn solution, but they haven't figured out how to predict churn. No one is getting them to work."   
       
     
Who's going to churn next?   
     
The problem is, he says, that most of these churn solutions rely on metrics - in other words, historical data - rather than analytics. "They tell you who churned, and what products they stopped using, but they don't tell you who's going to churn next. They offer lots of forecasting and lots of trends - but few, if any of those accurately offer a segmented, intelligent prediction."   
     
Subex takes a different approach. ROCware "extracts features automatically - such as billing and payment history, late payments, overdue balances, calls to the call centre and usage behaviour. These relate to quality-of-service issues, and they go well beyond what a customer relationship management tool does. Someone may have had three wrong bills, and so they are irritated with the company."   
     
In such a case, if they are a good customer, the company may endeavour to keep them. "The user can determine what types of retention offers they want to have available, and ROCware can automatically recommend an appropriate option from that group. It may be a discount, a usage credit, or other options, but based on the insights of why they are at risk, ROCware will recommend the action," says Brooks.   
     
Subex offers ROCware to help operators manage enterprise customers, too. "There is a suite of capabilities around understanding and retaining your customer," says Brooks. Indeed, the key question is: "How does the customer feel they are being treated by the operator? We need to understand the customer's point of view about how the operator has treated them."   
       
     
Bird's eye view of profitability   
     
It's also critically important for CFOs to understand and have visibility into enterprise margin and profitability, he adds. "ROCware allows the operator to see which products that are profitable, and which customers are contributing the highest margin to the business. It provides predictions around how a new product will actually cannibalise from your existing offers, which may have a massive unexpected impact on profitability."   
     
The third leg to this - after the consumer and the product - is the financial relationship with other operators. "This includes the complete range of partners, including interconnect, content, roaming and so on. This solution offers significant insights into overall relationship performance with those partners."   
     
The crucial idea is to know the information immediately. "Most analytical processes use data that is latent, that is five, six or seven weeks old. You can't tell if a product is profitable. You can't measure the impact of a new offer from a competitor. And most importantly, you can't respond to adverse situations in time."   
     
Hence his point - at the beginning of this interview - about the impact of a content partner on an operator. The partner moved traffic onto a rival without the operator knowing.   
     
Subex was called in, after the fact. "We ran a pilot programme and we showed them they could have spotted this in hours," says Brooks. "The CFO had been wanting this level of information from the beginning, but the capabilities through reporting and simple metrics could never support this level of intelligence."   
     
And the CFO must also keep a sharp eye on network capital spend, he adds. "The biggest spend in any operator is on the network. There's massive money being invested every year to support network growth."   
     
Fortunately five years ago Subex bought Syndesis, a Canadian company that had a technology which is complementary to ROCware, as it is capable of automatically discovering network assets, logical and physical, and service topologies, and correcting inventory along the way.   
     
"We call this data integrity management - DIM - and it can give an extremely detailed view of network assets. DIM has the ability to discover assets including switches, routers, cabinets, shelves, cards, ports, channels and so on." The DIM technology has been integrated into ROCware.   
     
The results are startling. "Some companies are using their platforms at only 50% efficiency, and some at 100% without realising it" says Brooks. Most operators have a capacity planning tool already, but those tools are limited in their capabilities, he says. "They look at IP traffic data to guide capacity metrics and planning, yet these metrics consistently lead to flawed planning conclusions, which lead to flawed capital spending."   
       
     
Each box in the network   
     
The Subex tool "can see each box in the network" and it can help operators "calculate the time to exhaustion of any discoverable element in the network", he adds. "We can set alerting thresholds - and predict exhaustion with 30, 60, 90, or even 120 days warning. That gives operators time to tackle the problem before it becomes a problem."   
     
The overall ROCware program around network analytics provides insight into overall network capital asset management. Using ROCware, the operator knows what they have installed and where it is; how much they're using it - and where all the spares and extras are in your procurement chain. This all contributes directly to capital planning, based on analytics and insights founded on network state, not OSS and BSS statistics.   
     
Finally, ROCware will help operators manage the end of life of network equipment. "You may have equipment that cost $500,000 when new. If you manage its retirement efficiently, you may be able to get $200,000 on the grey market." If you leave it de-provisioned and sitting in the central office too long, however, the potential resale value will drop.   
     
And that's what too many operators do, he says - though, maintaining his unblemished record for customer confidentiality, he doesn't give names.   
     
"We've come across cases where equipment has been deprovisioned but it is not turned off. It's powered up, burning electricity and losing value in the market. We can manage all these processes. We can understand the failure rates, and predict what equipment is needed, where it will be needed, and most importantly we can provide insights around when and why it will be needed."   
     
There's no point in keeping 50 spare network cards in a warehouse in Dallas if the network growth, retirement and failure rate indicates that the most you'll need is five from that location. If you need more, the vendor will be able to supply them in the right timeframe.   
     
"That means you can take 70-90% off your storage and procurement levels. Some operators are spending $500 million a year on this equipment - so we can help potentially save them $350 million in capital avoidance. We can predict all of that through ROCware." 
  
     
www.subex.com




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