Intelligence In The Here And Now

To deliver a decisive competitive advantage with CRM, use analytics to predict present -- and future -- customer behavior

Page 2

Epsilon, a leading relationship marketing services firm, chose to gamble on technology from a fairly new kid on the block: Netezza, developer of data warehouse "appliances" that bundle relational database software, storage and server technology into single package. "What if what they're saying is true?" says Mike Coakley, vice president at Epsilon, recalling his team's reaction after its initial look at Netezza Performance Server (NPS). The bundle presents something of a "back-to-the-future" concept of a database machine to knock cost out of the layered technology stacks that most often address data-intensive applications. Epsilon tested NPS on its handling of a heavy load of simultaneous queries from Business Objects, Unica marketing management and other tools.

The company was satisfied with the speed and throughput; production query systems that took hours in batch with Epsilon's older systems could execute in minutes, says Coakley. "Now, our systems can answer multiple questions per day from our clients, which reduces the cycle time and ultimately how long it takes to get campaigns up and running." Coakley likes Netezza's price point: "We may be able to offer services that normally require large, expensive systems to organizations that don't want to spend a lot of money, such as regional banks and midsize firms." Competitive offerings from NCR/Teradata, Oracle and other major database providers will likely join Netezza and draw interest from organizations that currently view customer intelligence as beyond what they can afford.

CDI: CRM With a View

Along with query performance, the data warehousing and integration infrastructure is responsible for delivering that most coveted enterprise resource: the single view of the customer. Beyond multiple CRM and database marketing applications, most organizations have a combination of ERP, order management, call-center management, sales force automation and other systems, each of which owns important data about customers. External data service providers with demographic, credit and other information are also part of the puzzle.

Pulling relevant data together into a 360-degree view of a customer requires overcoming many integration obstacles: duplicate data, mismatching customer codes and attributes and so on. While some organizations pursue the "single view" to focus on products, financial metrics or regulatory compliance, improved customer intelligence is typically the main reason. That interest explains the current market buzz about customer data integration (CDI) and enterprise information integration (EII) as potential solutions to the need for a single view.

CDI covers a range of possible solutions, including centralized semantic stores, which put rules and validation programs to resolve integration problems into an application program or Web service available to all systems; master reference data stores, which consolidate customer information into one source of truth; and even the more well-known enterprise data warehouse (EDW) and operational data store (ODS) systems, which can segment, partition and aggregate customer data. Whereas the EDW traditionally serves the predictable information analysis needs of BI reporting, an ODS offers a subject-oriented integration of more volatile operational data. DWL, Initiate Systems and Siperian are prominent pure-play CDI vendors. IBM, Oracle, SAP and Siebel have CDI solutions in their portfolios. In January, Hyperion announced that it's acquiring Razza Solutions, maker of master data management (MDM) software. MDM is a technology flavor similar to CDI.

A key issue drawing attention to CDI and EII approaches is timeliness. Data warehouses are typically updated in batch, but real-time pressures are changing things. Streaming data is a new option; you can "stream" or "trickle" data into the EDW or ODS to continuously update single rows in the database, for example. Message-oriented middleware (including its Web services-oriented offshoot, enterprise service bus) delivers a stream of updates to "subscribing" data warehouses. With streaming, however, IT's challenge is to bring transaction-oriented management to the warehouse environment.

EII versions of CDI focus on delivering a single view of data, rather than the data itself. Avaki, Composite Software, Group 1 and MetaMatrix are leading pure-play vendors. With EII, you don't stage the data in an EDW or ODW; instead, the EII plays a middleware role to deliver integrated results sets to front-end BI or other user tools. Life Time Fitness, for example, uses Composite Information Server to join information from disparate data sources, including two large databases running with Microsoft SQL Server, another Java-based application and a hosted POS system. Life Time gives business users a consolidated view of each customer, without incurring as much data integration infrastructure complexity.

Harrah's Operational CRM

Harrah's Entertainment establishes its single view through an EDW running on Teradata. "We use the EDW to track customer information and activities so that we can interact with customers more intelligently in the future," says Sam Dillard, Harrah's IT director. "The EDW started out as a marketing idea, but we designed it to support multiple subject areas for better alignment of business units. Also, we can view ourselves in multiple ways. While we see ourselves as a consumer marketing company, we're also a retailer. Many of the performance measurements we take are what retailers use."

The company is renowned for its Total Rewards and Player Contact System loyalty programs. Harrah's provides selected customers with loyalty cards, which they swipe at gambling stations to gain Harrah's points. Meanwhile, Harrah's is collecting valuable data, which it uses to track customer spending and feed algorithms and rules systems that deliver guidance to employees (or self-service applications) about special offers they might provide. "Our analytic systems allow us to make smart decisions and help employees deal with our customers in a way that's rewarding for them. We have happy and more productive team members as well as more satisfied customers."

A key differentiator is an "active" approach to data warehousing, which moves Harrah's beyond analytic to what it calls "operational" CRM. "We take the analytics and tap into them in a real-time manner, instead of as part of a batch process," explains Dillard. "We pull historical data from the warehouse and use it with real-time data coming out of our operating environment." Harrah's uses Tibco business integration software adapters to provide a constant trickle feed of data into and out of the data warehouse. "To guide decision-making, our system looks at historical data for that customer or process and applies a business rule to make a recommendation of what the next step should be," Dillard says. "Our platform also lets our people do analysis on data much sooner than they otherwise would."

Future Foretold: Predictive CRM

With data on almost 29 million guests in its customer database, Harrah's has a prime resource for doing predictive modeling and analytics. "It's fairly easy for us to reach out to a segment in our database to see how a certain group has behaved and then predict how someone new would behave," Dillard explains. With help from Cognos software for predictive modeling, Dillard says Harrah's can "estimate what a customer's enterprise value would be to us."

Email article

Write to editor

Print article