Carphone Warehouse

Carphone Warehouse recoups £30 million (about US$59 million) in lost revenue

Published on 14-Mar-2012

Validated on 07 Oct 2013

"IBM PureData System for Analytics has enabled us to develop an end-to-end revenue assurance model that has led to the recovery of £30 million (about US$59 million) to date." - Jason McCreight, Business Intelligence Manager, Carphone Warehouse

Customer:
Carphone Warehouse

Industry:
Telecommunications

Deployment country:
United Kingdom

Solution:
PureData System for Analytics (powered by Netezza technology), PureSystems, Big Data, Big Data & Analytics, Big Data & Analytics: Improve IT, Data Warehouse

IBM Business Partner:
Informatica

Overview

Carphone Warehouse, which started in 1989 with a £6,000 (about US$11,500) investment, grew quickly to become the largest retailer of mobile phones in Europe, with over 2,000 stores in 10 countries.

Business need:
A scalable, flexible data warehousing and analytic platform to accommodate rapid business growth

Solution:
A purpose-built, high-performance data warehouse solution that makes advanced analytics on very large data volumes simpler, faster and more accessible

Benefits:
£30 million (about US$59 million) in recovered revenue; Scalability during rapid growth and acquisitions; More dynamic response to shifting market needs; Restored confidence from business users and management; Call detail record queries down from 35 hours to 35 minutes

Case Study

Carphone Warehouse has always led change in the phone retail industry, but today the company finds itself in a more dynamic stage of its development than ever before. It faced considerable growing pains with its existing data warehousing system until the company put IBM® PureDataSystem for Analytics, powered by Netezza® technology at the heart of its business intelligence strategy.

Carphone Warehouse, which started in 1989 with a £6,000 (about US$11,500) investment, grew quickly to become the largest retailer of mobile phones in Europe, with over 2,000 stores in 10 countries. Now, it is rapidly expanding into the telecommunications operator space, both as a mobile virtual network operator (MVNO) and a fixed-line broadband and telephony provider. The company has succeeded in using a high- volume, low-margin model that lets it pass economies of scale onto its customer base. Its existing businesses were growing, and the company achieved £3 billion (about US$5.9 billion) in revenue for the first time in fiscal 2006. Today, Carphone Warehouse Group PLC comprises a 50 percent interest in the Best Buy Europe Group and a 47 percent interest in Virgin Mobile France.

Growing pains
The danger of a high-volume, revenue-driven model is that any revenue loss has a high impact. Because it operates in a volatile, quickly moving sector, the company must react rapidly to changes in market conditions. For Carphone Warehouse to maintain and grow its revenues, it needed a high level of data visibility, along with rapid, accurate reporting.

The company faced two challenges. First, it had to cope with the increasing data workload that comes from a rapidly growing, high- volume business. Secondly, it had to become adept at using that data to gain new insights into a business that deals in highly complex products and services that are heavily reliant on information for their success.

An example of such a product is the company’s TalkTalk consumer telephone service, launched in February 2003. The service has grown quickly, thanks to the ability of Carphone Warehouse to react quickly to shifting market needs by deploying and adjusting complex operational processes. Acquisitions such as Onetel, which Carphone Warehouse purchased in December 2005, doubled the service’s subscriber base overnight, again highlighting the volatility of data levels in a growth- focused company. And all of this data has to be made available to managers in a ‘retail-friendly’ way, so they can find out average revenue per user (ARPU) and churn rates by channel or branch.

By the end of 2006, the company was regularly dealing with queries containing over nine billion call detail records (CDRs). This growing number had contributed to poor data warehouse availability and performance, which was beginning to have an operational impact on the company’s business. Business intelligence and ad-hoc query performance were falling as data levels rose. Managers had to settle for service level agreements (SLAs) that promised data by 2 p.m. This meant that in the mornings, they were left uninformed about the current state
of the business.

Under pressure
Carphone Warehouse’s existing Oracle database was four years old, and had been designed as a financial analysis tool. The company found itself in a perpetual upgrade cycle with Oracle as it tried to improve the performance of its database.

Business users and senior managers were quickly losing confidence in the data warehouse, which meant they were confronted with inaccurate, unreliable methods or creating their own manual solutions. This led to a lack of cohesion in analytical methods. The company’s data reporting function was facing failure and it needed a path back to productivity. Carphone Warehouse decided to improve the SLA to make data available by 10:30 a.m. and take steps to improve overall performance.
The question was: how?

All change
Following numerous acquisitions, Carphone Warehouse had a wide variety of business intelligence tools in its portfolio that needed to be integrated onto a single platform. The company wanted to meet the challenge head on, and began an enterprise-wide back office transformation program. The program, which covers finance, human resources and information management, would deliver an integrated system giving Carphone Warehouse a holistic view of its business and smoothing the merger and acquisition process.

It considered several options for its data warehousing strategy, including staying with an Oracle database or moving to Teradata or IBM. It chose IBM for its price/performance ratio as well as its speed of deployment. IBM PureData System for Analytics, powered by Netezza technology, architecturally combines hardware, database software and data storage to optimize performance and analyze terabytes of data. Carphone Warehouse uses Informatica to extract, transform and load the data into IBM PureData System for Analytics, while Business Objects is used as Carphone Warehouse’s reporting layer.

It took just 12 weeks from Carphone Warehouse’s initial purchase decision until the PureData System for Analytics went live. When the first system was switched on, it began processing initial data volumes of
1.5 TB, handling enhanced analysis and customer relationship management (CRM) extracts, in addition to revenue assurance.

Once up and running, the appliance began delivering business value immediately. Previously, under the Oracle system, 150 million rows of unbilled CDR data would have taken 3.5 hours to process. PureData System for Analytics finished the task in 35 minutes. Managers can now collect data for analysis at the desired 10:30 a.m. deadline, rather than having to wait until mid-afternoon.

Carphone Warehouse found that PureData System for Analytics was at least three times faster to load than Oracle and 50 times faster at running business intelligence queries, according to Simon Post, CIO at the company. “Netezza does what it says on the tin,” he said.

About IBM PureData System for Analytics The IBM PureData System for Analytics, powered by Netezza technology, integrates database, server and storage into a single, easy-to-manage appliance that requires minimal setup and ongoing administration while producing faster and more consistent analytic performance. The IBM PureData System for Analytics simplifies business analytics dramatically by consolidating all analytic activity in the appliance, right where the data resides, for industry-leading performance. Visit: ibm.com/PureData to see how our family of expert integrated systems eliminates complexity at every step and helps you drive true business value for your organization.

About IBM Data Warehousing and Analytics Solutions
IBM provides the broadest and most comprehensive portfolio of data warehousing, information management and business analytic software, hardware and solutions to help customers maximize the value of their information assets and discover new insights to make better and faster decisions and optimize their business outcomes.

For more information
Help IT make the shift to the strategic center of your business, and leverage proven expertise to take the lead. To learn more about the PureSystemsfamily and the PureData System for Analytics, contact your IBM representative or IBM Business Partner, or visit the following websites: ibm.com/PureSystems/PureData or
ibm.com/software/data/puredata/analytics

Products and services used

IBM products and services that were used in this case study.

Software:
IBM Netezza 100, IBM Netezza Performance Server, PureData System for Analytics (powered by Netezza technology)

Legal Information

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