Improving expense management, cost effectiveness and profit margins with telecom analytics

Financial Services Writer

Telecommunications analytics provides firms with critical insights that help them improve intelligent expense management and find the best revenue and profit opportunities.

"Analytical solutions using [the Internet of Things] give the telecom industry new tools to go far beyond and offer very advanced management capabilities," analyst Jeff Kagan said in a recent interview. "As telecom analytics continues to mature, I see this solution migrating to every wireless and wire line network ... This will continue to help networks manage and decrease their costs and increase their profits."

Analytics leads to intelligent cost cutting and expense management

According to, telecommunications companies can use analytics in a few expense management areas:

  • Operations and budget analysis: To monitor budgets, customer satisfaction and sales using in-house data.
  • Capacity management analysis: To identify capacity usage on available infrastructure, thereby providing accurate information on current usage and potential cost savings.

Analytics designed for expense management enable companies to look at costs by vendors, type, department and employee. This allows the company to identify employees or departments that have higher-than-necessary expenditures or expense types that are out of line. However, the analytics system must be comprehensive enough to provide granular detail, department-specific insights and enterprise-wide information if it is going to contribute meaningful information.

This type of expense data can help companies identify spending trends, compare actual and projected spending, and negotiate volume-based discounts and controlling costs.

Ensuring accurate data input

According to Dixon Hughes Goodman, expense management analytics can help companies make strategic cost reductions, rather than across-the-board cuts that can hurt ongoing capabilities and eliminate growth possibilities. However, to be effective, comprehensive analytics tools must have appropriate controls to ensure the accuracy of input. While the company's financial reports can provide the basic data input, more granular detail from different internal and external sources can uncover areas where the company can cut wasteful expenses and areas where spending cuts should not be made so as not to hurt the company in the future.

Analytics unveils best revenue, profit opportunities

From the profit side, analytics can show telecommunications which customers, products and services have the most potential. According to McKinsey & Company, enterprises employing customer analytics enjoy 126 percent profit improvement over competitors who do not.

As The Telegraph points out, analytics enables telecommunications companies to uncover increasing demand for services, anticipate and proactively respond to customer behavior, enhance quality of service (QoS) and preempt complaints. QoS and customer satisfaction are crucial in customer retention, which, in return, is crucial in profitability.

By employing analytics to uncover customers' needs and having a single and comprehensive view of this data, telecommunications firms can identify the most profitable customers and target them with relevant sales offers and actions. For example, Cablevision Argentina uses analytics to uncover causes of customer dissatisfaction, allowing the company to target improvements and boost customer loyalty.

The more experienced telecommunications companies become with utilizing analytics, the more advantages they will find. As telecommunications companies expand the use and depth of their analytics, they will uncover additional expense management and revenue opportunities. Learn how proactive customer care could help you save millions annually by reducing customer service calls by as much as 20% in a service provider case study.