DECEMBER 2014, VOLUME 2, NUMBER 6 Business...

New Hires Get Softer Landing at Inova

What’s So Great About Java 8? Celso Mello: Stop! In the Name of TCO

Rules of Engagement

DECEMBER 2014, VOLUME 2, NUMBER 6

Business InformationINSIGHT ON MANAGING AND USING DATA

Deep Trouble Organizations that ignore customer data management risk straying into a quagmire of murky information. And without proper data quality efforts, there’s nowhere to go but down.

PLUS: Analytics Spins Gold From Customer Data Floss

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NEW HIRES GET SOFTER LANDING AT INOVA

WHAT’S SO GREAT ABOUT JAVA 8?

COUCHBASE 3.0’S SPEED LIES IN TUNABLE MEMORY

DON’T LET POOR-QUALITY DATA KILL CUSTOMER RELATIONSHIPS

ANALYTICS MAKES CUSTOMER DATA MEAN SOMETHING

CELSO MELLO: STOP! IN THE NAME OF TCO

RULES OF ENGAGEMENT

2 BUSINESS INFORMATION • DECEMBER 2014

AS RECENTLY AS two years ago, when checking in at my fa-vorite business hotel, I still would be asked the question, “Have you stayed with us before?” Of course I have—I even participate in the rewards program there. Now when I check in, the front-desk clerk knows where and when I last stayed, and what I ordered from room ser-vice. An improvement? Yes and no, but at least the hotel knows I’m a repeat customer.

The problems confronting businesses trying to make sense of customer data are myriad, as you will read in this issue of Business Information. Knowing what data to collect, how to collect it and what to do with it is vitally important. So is making sure that the data you have on customers is correct, up-to-date and readily available. The cost of insufficient or bad-quality data can be as high as not collecting the information at all.

Take WBGH. The public media organization had ac-cumulated masses of dirty data over 60 years, and it was affecting interactions with donors.

“If the systems aren’t smart enough to know that a record coming in is from a donor we’ve known for many, many years, we felt we were risking our ability to have solid relationships with our donors,” said Cate Twohill, senior director of customer relationship management at WGBH.

With an influx of customer data coming in from a variety of sources, businesses now have data about their data, and they’re finding that poor data quality has a real impact, with studies by Experian and Gartner showing that bad or erroneous data can cut deeply into potential revenue.

The cry is also going out for good, old-fashioned best practices—and some common sense. Businesses must ask this: Is the data I’m collecting necessary to my goals of increasing revenue and retaining customers? And will using it aid those efforts? If not, don’t collect it. A case in point comes from Andy McNalis, senior manager of big data and enterprise data warehouse administration, op-erations and development at Sears Holdings. The retailer considered collecting and analyzing browsing data from customers using in-store Wi-Fi, but that was “bordering on the creepy factor,” McNalis said.

A carefully thought-out plan has to be in place before customer data is collected, analyzed and acted on. Oth-erwise, you might as well treat that repeat customer like someone you’ve never met before—and that’s not good for business. n

How well are you treating your customer data? Write to me at [email protected].

EDITOR’S NOTE | SCOT PETERSEN

Customer Data Is King

mailto:[email protected]

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Difficulty recruiting specialized employees

Changing expectations on the part of employees

Changing work models (e.g., telecommuting, flex time)

Difficulty recruiting employees with base-level skills

Aging workforce

A Workplace in ProgressNew technologies, growing data demands and increasing globalization are driving changes in how workforces are planned and built—contributing to some of the top labor market challenges cited by U.S. organizations.

83+17

25+75

TREND SPOTTER | EXECUTIVE DASHBOARD

SOURCE: OXFORD ECONOMICS’ REPORT WORKFORCE 2020; BASED ON RESPONSES FROM 2,718 EXECUTIVES AND 2,872 EMPLOYEES WORLDWIDE

Social RisingThe practice of using social media tools to engage with audiences, or social business, is gaining popularity in organizations, with 70% seeing more interest over last year. And in three years, more companies will see it as critical to business.

MILLENNIALS NON-MILLENNIALS

I expect more feedback than I currently get. 29% 41%

Quality of life is more important than my career path. 44% 45%

I frequently collaborate with colleagues in other areas of my company.

60% 64%

50%

47%

42%

41%

41%

83Percentage of U.S. companies using contingent, inter-mittent or seasonal employees

25Percentage of employees at U.S. companies who are concerned about their positions changing

20% Somewhat important

4% Somewhat

unimportant

5% Neither

important or unimportant

2% Unimportant

SOURCE: MIT SLOAN MANAGEMENT REVIEW AND DELOITTE’S MOVING BEYOND MARKET-ING: GENERATING SOCIAL BUSINESS VALUE ACROSS THE ENTERPRISE; BASED ON RESPONSES FROM 4,803 BUSINESS EXECUTIVES, MANAGERS AND ANALYSTS

69+20+5+4+269%

Important

Kids Today!Sure, Millennials have a different set of values and worldview—but they might not be as far-out as their employers think they are.

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TREND SPOTTER | VERBATIM

“ Being that we’re a heavy Salesforce user already, to have it seamlessly integrated, it’s attractive. I think the biggest thing for me will be the price.”HEATH HENSLEY, CTO at software company PowerDMS

“ If I’m a customer, I’m pleased to see that Salesforce is offering more analytics because I’ve always wanted that from Salesforce.”JEFF KAPLAN, consultant at THINKstrategies

“ Any and every initiative that puts more insight into the hands of [business] leaders trans-forms a business. We have a ton of data that, without something like Wave, we can’t bring into an analytic environment for a sales executive to see.” MICHAEL PLANTE, vice president of demand marketing at InsideSales.com

“ I’m not sure yet. It’s so new.”SEAN TATARIAN, business development representative at FinancialForce.com

“ I think they are going to want the native Salesforce, but will the price be right? The mobile capabilities probably will make the biggest case for that.”GENEVA STEPHENS, senior manager of sales operations at AT&T

Learn more about Sales-force’s Wave in a past episode of the news show BizApps Today.

Wave of UncertaintyBusiness information was at Dreamforce 2014 in San Francisco, where Salesforce.com rolled out Wave, its new analytics offering that runs on the Salesforce1 application platform. The company touts it as “analytics for everyone,” but will everyone buy in?

http://searchdatamanagement.techtarget.com/video/Salesforce-analytics-makes-a-splash-cloud-big-data-users-skew-to-Web

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WHEN HONG LE was in her 20s, before she became a human resources IT director who helped reshape how orientation and training are managed at her current em-ployer, she began her own personal onboarding process.

Le was a teacher in Vietnam but immigrated to the U.S. with hopes of a better life. With little knowledge of English and few contacts, she didn’t know how she would support herself.

Some 20 years later, Le runs the HR management sys-tem at Inova, a healthcare organization that serves more than 2 million people in the Washington, D.C., metro area. One of her main goals is to improve employee on-boarding so the transitions of new workers into Inova are smoother than hers was into the U.S.

“When I came here, I didn’t have anyone to take me through the process step by step,” Le said. “That’s why I think it’s time for me to help the company and new hires so we can lead them in the right way.”

New and ConfusedWhen Le came to the United States, she spoke only Viet-namese. So she took English courses during the day and worked a night shift at 7-Eleven.

“It took me two to three years to understand the struc-ture of English,” she said. “I learned that way by myself,

going around, taking the bus, finding my way and going to school.”

The onboarding process at Inova was similarly diffi-cult for new hires to navigate before Le led an overhaul earlier this year. The health system has about 14,000 employees, with several hundred going through hiring, orientation and training at any one time. Inova was already us-ing IBM Kenexa software for its applicant-tracking system, so it tried Kenexa’s HR onboarding module. But that didn’t work out. HR managers had to key in personal information from paper forms—and reminding employees to finish the forms and attend training was cum-bersome, done mainly through email.

TREND SPOTTER | MEETING ROOM


New Hires Get Softer Landing at Inova

NAME: Hong LeTITLE: Director of HRISORGANIZATION: InovaHEADQUARTERS: Falls Church, Va.

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TREND SPOTTER | MEETING ROOM

Inova distributed a survey to new hires, who said they were frustrated with the process. Oftentimes employees couldn’t log in to view their job profiles or perform the steps to complete their training. Inova wasn’t making a good first impression.

“They were confused,” Le said. “They didn’t know how to use the system.”

Finding the Right DirectionLe’s assimilation into the U.S. wasn’t just about learning English; that was just the first hurdle in her journey.

After taking English classes for a year, she moved to Virginia and enrolled in college. She gravitated to human resources and started her career as an HR information system analyst doing data entry and filing. She became interested in the technical side and then management. Eventually, Le became HRIS director at Children’s Na-tional Medical Center and, four years ago, moved to Inova.

“I wanted to see what was out there on the technical end of the organization to help HR provide a better pro-cess for employees,” she said.

At Inova, Le began looking for an onboarding product that was automated and easy to use. She came upon Infor Enwisen, which Inova was using for case management. Le asked to test the vendor’s onboarding module.

“The way the system is designed, it is very easy to nav-igate and process,” she said. The company went live with Enwisen’s AnswerSource Onboarding tools in May.

Le described the new process: Once an employee ac-cepts a job offer, the system automatically generates a welcome email that includes information for him or her to complete. Another workflow instructs the employee to process required documents.

Meanwhile, the system creates an employee ID. Then the new hire is prompted to attend orientation and training. Any documentation that Inova collects on an employee is saved to a shared drive, so there’s a single HR location from which to view it in case of an audit.

In the end, Le feels she made onboarding easier for employees.

“I learned the hard way; I learned it myself,” Le said, comparing her journey to the orientation process at Inova. “The new hires, they need help with the system. They might not know the technology, and I can help them.” —MARK FONTECCHIO

“ I WANTED TO SEE WHAT WAS OUT THERE ON THE TECHNICAL END OF THE ORGANIZATION TO HELP HR PROVIDE A BETTER PRO CESS FOR EMPLOYEES.” —Hong Le, Director of HRIS, Inova

Read more profiles of business and IT professionals.

http://searchbusinessanalytics.techtarget.com/essentialguide/Change-agents-Leaders-in-information-management-technology

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JAVA 8, WHICH Oracle released in March, brings advanced automation to application development and deployment. Its not-so-secret weapon is integration with Project Lambda, a programming approach with a simpler lan-guage structure and new capabilities that speed up the software design process.

THE BUZZSay good-bye to the Java 7 shortcomings that advocates of competing languages like Scala and Clojure were happy to point out. It was slow. It was cumbersome. It couldn’t scale. Java 8’s new way of formatting code, called lambda expressions, lets developers write complex programs in fewer lines. And with less coding, there’s a smaller chance that bugs will be introduced. Java 8 also has a slew of built-in optimizations that will make code run

faster and scale better without developers even knowing about them.

THE REALITYExpect to see Java 8 take off in startups and businesses built on cloud, mobile and other new technologies. But bigger organizations will try to extend investments in previous Java versions, which they may have only recently adopted. And the changes in Java 8, though welcome, aren’t exactly earth-shattering. In fact, Java is really playing catch-up with Scala and Clojure, which aren’t held to the same strict standards and broad review process as widely used Java is. That means innovative features can more easily be added to them, giving lead-ing-edge developers a reason to limit their Java intake.

—CAMERON MCKENZIE

TREND SPOTTER | WHAT’S THE BUZZ?

What’s So Great About Java 8?

Java’s Genesis

1991: Sun Microsystems engineers start work on a programming language for a home-entertainment controller.

1994: The team shifts the project’s focus toward Internet applications.

1995: Under the name Java, the new language is incorporated into the Netscape browser.

2007: Sun makes nearly all of Java’s code free and open source.

2010: Oracle acquires Sun and files a lawsuit against Google for using Java.

2011: Java 7 is released. Additions include a new platform API for graphics features.


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INNOVATION SPOTLIGHT

Couchbase 3.0’s Speed Lies in Tunable Memory

WHAT IT IS

Couchbase Server is a NoSQL database that caches small pieces of data in memory to help speed up applications; it’s tailored to the needs of fast-paced, schema-on-the-fly Web apps. Version 3.0 promises vastly improved performance and operating efficiency.

WHAT IT COSTS

Product subscriptions are available on annual and multi-year bases, with three levels of technical support to choose from. Pricing starts at $3,000 per commodity node.

WHAT USERS SAY

Version 3.0’s predecessor, 2.5.1, is a very fast data store, said Ido Shilon, director of engineering at customer service pro-

vider LivePerson. He’s intrigued by the new release’s preview of N1QL, a query language that will add widely used database development functions.

WHY IT MATTERS

The new release has a tunable memory scheme that lets data be assigned at runtime to RAM or disk to help

applications sort short- and longer-lived data. It also adds stream-based data replication to accelerate processing and administration work.

SOURCE: COUCHBASE INC.

The tunable memory feature in Couchbase 3.0 lets users split large data sets between memory and disk. This screenshot compares RAM and disk use on two different clusters.


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DATA MANAGEMENT | LAUREN HORWITZ AND TIM EHRENS

DON’T LET POOR-QUALITY DATA KILL CUSTOMER RELATIONSHIPSOrganizations had better pay more attention to contact data management—or they’ll see customers march out the door.

WGBH knew it had a data problemwhen fundraisers asked longtime donors to give for the very first time.

The public media organization in Boston had six decades of data that was disorganized, inaccurate and duplicated in its databases—information that fed inter-actions with invaluable donors. Some complained they were mailed multiple pieces of marketing material. Oth-ers had to endure pledge drive pitches from agents who knew nothing about their many years of generosity.

“If the systems aren’t smart enough to know that a record coming in is from a donor we’ve known for many, many years, we felt we were risking our ability to have solid relationships with our donors,” said Cate Twohill, senior director of customer relationship management at WGBH.

WGBH creates local radio and TV programming in the Boston market as well as national programs including Downton Abbey and Frontline—and pledges keep them on the air. But the station left that accumulated, poor- quality data untouched, shuffling it through five CRM systems. The result was a mountain of inconsistent, incomplete and outdated information that was getting



in the way of WGBH’s primary goals: boosting contribu-tions and encouraging donors to consider new fundrais-ing options, such as estate planning.

By 2013, WGBH had moved to a Salesforce CRM system. It also enlisted RedPoint’s Convergent Market-ing Platform to identify duplicate or incomplete donor information.

Through an identity resolution method known as heuristic matching, RedPoint finds similar customer in-formation, merges it and declares a definitive copy. “We focused on merging together all the active accounts,” Twohill recalled. “We gave [RedPoint] our data, and in about an hour they found 80,000 duplicate accounts.”

RedPoint’s data quality efforts helped WGBH generate more complete and up-to-date donor records. Today, ac-cording to Twohill, the station doesn’t have to field com-plaints from donors asking, “Why are you mailing two or three pieces of the same mail to the same address?” Instead, it can focus on donors’ questions about WGBH offerings.

Poor Data? That’s Going to Cost YouCustomer data management often falls to the bottom of the priority list. Organizations get bogged down with more pressing issues, such as cutting costs or keeping daily operations running. But relying on poor-quality customer data almost always frustrates customers—and many of them take their business elsewhere.

But managing customer data has never been more important. Organizations are struggling to integrate

an unprecedented amount of customer data streaming in—from websites, social media, direct mail and contact center databases—and to create definitive data that can guide their communications with customers.

The cost of poor data quality has real impact, too. According to research outfit Gartner, customer relation-ship management departments without sophisticated data management tools will derive erroneous results that alienate customers, resulting in a 25% reduction in

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(Continued on page 12)

Bad Impressions Organizations have access to reams of customer data from a growing number of sources. But not managing it correctly can severely cut into revenues.

12%

Percentage of income the average organization loses each year because of bad contact information

84%

Percentage of companies that say bad contact data hampers marketing efforts

SOURCE: EXPERIAN DATA QUALITY’S 2014 REPORT MAKING YOUR DATA WORK FOR YOU; BASED ON A SURVEY OF 1,200 ORGANIZATIONS IN THE U.S., U.K. AND EUROPE



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THE SHEER VOLUME of healthcare data and the industry’s

inability to tap its potential adds up to more than

$300 billion annually in wasted value, according to

the McKinsey Global Institute. Add to that compliance

with federal privacy laws, and it’s a wonder any lives

get saved.

Multiple health data sources keep information such

as clinical, financial and operational data siloed and

separated, a problem that’s compounded by each

data system’s unique validation rules, formats and

key identifiers. With different databases and software

systems holding different subsets of data, it’s difficult

to get a complete picture of a patient—so accurate

analysis of all that information is tough to do.

The Health Insurance Portability and Accountabil-

ity Act, or HIPAA, mandates data-handling practices,

restricting access to patients’ data sets; only prac-

titioners directly involved in their care and whoever

else they request can lay eyes on it. To comply with

these rules, healthcare providers often maintain data

in silos, with clinical data segregated from billing

data, for example.

Consultant Nathan Caro said that at the healthcare

analytics provider where he previously worked, data

such as a patient’s name, address, demographics

and insurance info was organized in separate tables.

Rigid rules and formats governing the data sets made

it challenging to link business information such as

billing transactions and clinical data such as records

of doctors’ visits with patients. Caro said hospitals

would send his company huge chunks of data, none of

it structured—billing information mixed with patient

data as well as insurance claim codes. Identifying

which information was relevant to which business

units became a herculean task.

“You need to figure out what people can or can’t

see, then provide the means to be able to get it,” said

Rick Sherman, founder of consultancy Athena IT Solu-

tions. “The issue once you get outside your firewalls,

or when you move data out of your database, is that

you have a responsibility for how the people distrib-

ute that data out. To give them online access so they

can look things up, that’s one thing. If you actually

physically give them the data, then you have another

issue.”

Healthcare industry trade associations and govern-

ment rule makers are pushing for standard data for-

mats and information governance practices, but it’s

a big market. And until some standards are in place,

analysts are on their own. —TIM EHRENS

In Healthcare, Privacy Rules Hinder Data Analysis

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potential revenue. Similarly, a March survey by Experian Data Quality found that inaccurate data had a direct impact on the bottom line for 88% of responding companies.

Data quality tools like RedPoint are the foundation of larger master data management efforts to scrub poor- quality data and get it in order. MDM tools and processes can bring key shared master data together in a central hub by physically copying data or providing pointers back to other systems. The goal is to create a golden copy that’s accurate, up-to-date and consistent throughout an orga-nization. MDM thus creates a “single customer view”—a comprehensive portfolio of each customer, including his-tory, profiles and interaction with sales and support staff from far-flung channels, such as social platforms, email and live chat.

For WGBH, such governance was long overdue. “Now we’re able to be much more specific and accurate in all our communications,” Twohill said. And the station has saved nearly $50,000 in postal costs. Add in production and paper costs, and the revenue saved by eliminating duplicate data could add up to $100,000 annually, she estimated.

The Trouble With Legacy SystemsData quality and MDM efforts become particularly dif-ficult when an organization is saddled with not only poor-quality data but also legacy applications. Reliance Home Comfort is a home heating and cooling provider in

Toronto with 1.5 million customers. As a result of a com-pany spinoff and nearly 30 years of operations, the com-pany’s customer data resides in a Microsoft Dynamics CRM system—as well as in legacy applications, including ones used for fulfillment, repair technician scheduling, customer billing and company financials. Scattered cus-tomer data creates a major hurdle in providing seamless, high-quality customer service.

The systems are too old to be merged, so Reliance’s CIO, Celso Mello, had to patch them together through APIs to get them to talk to one another. But APIs can make systems sluggish when, for example, a rep looks up a customer’s record on a call. More important, Reliance reps, technicians or sales teams often have fragmented views of customers.

“Having all of that aggregated data behave as if it’s all integrated when you’re talking to a customer—that’s a major challenge,” Mello said. “[Customers] expect you to know everything about them.”

Manual data entry can augment these problems as

CELSO MELLO, CIO at Reliance

Home Comfort in Toronto, relies

on APIs to patch together a

jumble of legacy applications

stuffed with data on 1.5 million

customers. That often leaves

the company’s sales teams

with a fragmented view of

customers.

(Continued from page 10)

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well. Reliance’s business involves lots of data entry, and when it’s done by humans it’s slow and error-prone.

“Garbage in, garbage out—it’s a reality,” Mello said. “If the data gets into the system wrong to begin with, it’s going to be wrong throughout and you’ll have issues going on until the end.”

Mello has automated some processes, though. When a salesperson completes a customer’s form for a new product sale, for example, he can press a button and autopopulate the form with information from the fulfill-ment system, such as product names and 14-digit SKU numbers, instead of having salespeople write and then type the information.

Automating that process “cuts down on a lot of manual data entry and errors and delays,” Mello said.

Clean It UpfrontBig organizations like WGBH and Reliance Home Com-fort are saddled with common hurdles like legacy data. But even startups wrestle with customer data quality and data management issues. They just struggle differently.

Double Dutch, a San Francisco provider of social networking software for conferences, was cracking into an emerging market when it was launched in 2012. It needed to develop a set of prospect leads—and fast. Russ Hearl, vice president of global sales development, de-cided that identifying software buyers through a grueling schedule of all-day cold calling wouldn’t work.

The contacts that salespeople might generate from random calls would be like a steady diet of carbohy-

drates: empty calories that won’t help build muscle strength—or customers, in this case. Hearl needed to identify true decision makers—people who had the au-thority to buy the conference software his company pro-duced. So he needed a strategy to generate better customer lead data for his sales team.

“I wanted to minimize wasted effort [in] calling peo-ple who have nothing to do with the success of an event,” Hearl said. “We needed prospect data to feed the sales team without having them go to LinkedIn all day and try to find a needle in the haystack.”

But Hearl didn’t want to buy contact lists, which are costly and can introduce unreliable data. Instead, he in-vested in lead generation software from Inside Sales and hired a team of offshore researchers to vet the incoming data and identify real buying prospects. This enabled his lean sales staff of three reps to focus on selling the need for conference software.

Hearl’s research team combs through online contact data using sources like LinkedIn and other databases. To


RUSS HEARL, vice president of

global sales development at

Double Dutch, combined human

research with lead generation

software to identify prospects

for the San Francisco software

company.

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Relying on Eyeing Though a majority of organizations say they have procedures to ensure that their contact data is accurate, most of them check manually.

38%

Percentage of organizations that use specialized software to check data at the point of capture

34%

Percentage of organizations that use software to clean data after it has been collected

23%

Percentage of organizations that rely solely on regular manual checks of contact data

SOURCE: EXPERIAN DATA QUALITY’S 2014 REPORT MAKING YOUR DATA WORK FOR YOU; BASED ON A SURVEY OF 1,200 ORGANIZATIONS IN THE U.S., U.K. AND EUROPE


verify that the data is accurate, Hearl invested in custom-ized Web crawlers, such as one from Broadlook Tech-nologies, to verify data and fill in limited demographic information such as a name or email address. “Web crawlers can crawl 500,000 pages simultaneously, so the data you get out can have a lot of noise in it,” he said.

Further, Inside Sales identifies certain triggers that indicate a prospect is ready to buy, such as indications that a company is about to launch an event. Combining human research with technology tools is key to Hearl’s data strategy: creating more accurate profiles of buying prospects. That way, he said, he ensures that his data is current and complete and identifies the right customers to target for pitches and demos.

“The cleaner the data, the higher the productivity and the higher likelihood that our reps are going to hit their numbers in terms of calls and demos booked … and closed deals,” Hearl said. “So it all starts with having accurate, actionable data.”

Get Your Data Act TogetherBut many organizations need outside help tidying up their data. With its own data issues under control, WGBH is developing a service to help other program-ming outlets deal with quality problems. It manages data for a station in nearby New Hampshire and envi-sions extending services to other locations around the country.

The New Hampshire station went from being at risk of losing state funding to earning back its shortfall and

gaining an additional $1 million in backing. The deal benefits WGBH as well, since it acts as a revenue gen-erator and helps preserve the public media “ecosystem,” Twohill said, ensuring that failing stations survive so WGBH can air its programming on them.

For Reliance Home Comfort’s Mello, the next order of business is to tackle legacy systems and silos. Mello wants greater harmony among these systems so customer

Look for more on this story in an upcomingepisode of BizApps Today.

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agents, salespeople, technicians and executives can get better insight into customer purchases, preferences and issues. But currently, data is organized by department and business process, not by customer account.

“The fact that we have multiple databases for the same type of information creates problems for the customer because we silo the customer based on the business pro-cess,” Mello said.

A single data repository is not always realistic. Mello advocates a master-slave relationship in which updates made in one system are automatically updated in the other—if customer information and billing information are separated, for example. Reducing the number of

places where users have to enter data is also key, Mello said. But technology can’t replace human judgment on data quality and management.

According to Double Dutch’s Hearl, nothing is going to take the place of the grueling work of cleaning and verifying data. “There’s no killer app as far as CRM data cleansing.” n

LAUREN HORWITZ is an executive editor in TechTarget’s Business Applications and Architecture Media Group. Email her at [email protected] and follow her on Twitter: @lhorwitz.

TIM EHRENS is site editor of SearchCRM. Email him at [email protected].


https://twitter.com/lhorwitz



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ANALYTICS MAKESCUSTOMER DATA MEANSOMETHINGCompanies like Sears, eBay and Netflix are mining data on customers to help drive marketing and service strategies. But there’s more to the process than deploying tools and feeding info into them.

BUSINESS INTELLIGENCE | ED BURNS

Calling data “the oil of the 21stcentury” has become a widely re-peated maxim—and customer data is seen as particularly high-grade stuff.

Add in customer-related forms of big data—social media posts, email, surveys, customer service call tran-scripts—and many organizations are sitting on vast re-serves of valuable information. But the oil analogy only goes so far: It isn’t enough to pump, process and refine customer data in order to extract its business value. Until someone takes action on the data, it’s nothing more than an untapped well of 1s, 0s and text.

That’s where customer analytics comes in. And in-creasingly, organizations looking for a competitive edge are investing in multifaceted analytics programs designed to turn their customer-data crude oil into busi-ness fuel that can power their efforts to both attract new customers and keep the ones they already have happy.

For example, eBay Inc. analyzes a combination of sales records from its customer database and website activity data it gathers on users of its online auction site to cre-ate targeted marketing campaigns and personalize the site’s homepage and other screens for individual visitors.

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Speaking at the 2014 Big Data Innovation Summit in Boston, Vadim Kutsyy, formerly eBay’s head data scien-tist for big data applications and now the leader of a data research lab at the San Jose, Calif., company, said the analytics program has helped drive increased business on the eBay site.

In addition, eBay is using the findings to try to avoid showing site users a constant stream of ads and avail-able products that they aren’t interested in—a potential source of frustration for customers. Ensuring that people have a positive experience on the site—and keep coming back—is one of Kutsyy’s top analytics priorities: As part of the program, he said, “I ask whether or not our cus-tomers see a benefit from having their data with us.”

Kutsyy listed a variety of data management platforms and programming languages that eBay uses to power the analytics initiative—for example, Hadoop, a Teradata data warehouse, and MySQL and Cassandra databases. But he said one of the keys to getting customer analytics right is to not get hung up on—or religious about—the underlying technology. Whatever tools an organization chooses need to serve the end goal of identifying what customers want and delivering it to them. Customers “don’t care if we’re on Hadoop or Teradata, or if we write [applications] in Java or Python,” Kutsyy said. “They care that we make their lives better.”

Keep the Money Coming InNetflix Inc. has also made customer analytics a key component of efforts to personalize its online

streaming-media service for users and ensure that peo-ple are satisfied with the service—and keep paying their monthly fees. Nirmal Govind, director of streaming science and algorithms at Netflix, said at the big data conference that he collects and analyzes data about ev-erything users of the service do, including the movies they watch, how long their viewing sessions last and what kind of Internet connections they have. “We have a lot of data on how members consume content, what they like,” he said. “And all that data can be used to improve the member’s experience.”

Like eBay, Netflix uses a mix of technologies as part of the analytics program, among them Teradata, Cas-sandra, the open source Apache Hive data warehouse software and Tableau’s data visualization tools. After collecting and preparing data, Govind’s team runs algo-rithms against it to determine things like what movies and shows should be recommended to users and what resolution videos should be streamed at based on their Internet bandwidth. Since Netflix began producing its

NIRMAL GOVIND, director of

streaming science and algo-

rithms at Netflix, collects and

analyzes data about what mov-

ies users watch, how long their

viewing sessions are and what

kind of Internet connections

they have. Netflix uses that in-

formation to tailor its delivery

of content to viewers.


own original content in 2011, the Los Gatos, Calif., com-pany has also mined data on customer likes and dislikes to help it decide which shows to make.

There have been challenges along the way. For

example, Govind said that getting the recommendation engine right was difficult—the recommendations are based on general characteristics, but it can be hard to accurately predict what a particular person will want to


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LAST YEAR, ONLINE and mobile game developer King Dig-

ital Entertainment PLC ran into an unforeseen prob-

lem with Candy Crush Saga, its most popular game.

Lots of players were abandoning the game at level 65.

With Candy Crush Saga currently containing a total of

725 levels, that meant King was losing customers be-

fore they got very far into it.

After looking through the data the company col-

lects on customer gameplay, King’s data scientists

found that almost all of the people who stopped play-

ing did so after failing to make it past level 65. The

game design team then made some coding tweaks to

remove one particularly difficult element in that level.

Success rates went up, and more players stuck with

the game longer.

Casual gaming has become a big business: King

reported $1.88 billion in revenue in 2013. The company,

based in Dublin, Ireland, makes its money when play-

ers pay for in-game bonuses or to make additional

attempts at a level they’ve failed. Keeping players

engaged is the primary business game for King—and

Andy Done, the company’s data platform lead, said

that what happened with level 65 shows the impor-

tance of using customer data to help with engage-

ment. “It’s important to keep a dialogue going with

our gaming community,” Done said. “What the data al-

lows us to do is create that dialogue at a huge scale.”

To support the analytics process, King uses Hadoop

and an analytical database from Exasol, plus QlikView

to visualize reports. But Done said the technology is

merely a means of keeping the company close to its

customers. “The approach,” he added, “has to start

with a customer focus.” n

A Winning Play

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watch. To help fine-tune the engine, his team does a lot of A/B testing, giving multiple sets of users recommen-dations, which are based on different predictive models, and then tracking how much time each group spends streaming the recommended content.

Data analysts at payroll and human resources services provider Paychex Inc. are focusing on another aspect of customer analytics: using churn models to identify customers that might be on the verge of taking their business elsewhere. At the 2014 Predictive Analytics World conference in Boston, Philip O’Brien, risk ana-lytics manager at Paychex, said he and his team use data on company size, payment history and customer service interactions to build models designed to point to corpo-rate clients that could be looking to leave the fold and others that are likely satisfied. Early on, the analytics team found that 21% of the customer service money ear-marked to cover discounts on contract renewals was be-ing spent on customers that probably would have stayed with Paychex regardless.

O’Brien said the Rochester, N.Y., company has since implemented a set of prescribed approaches for dealing with customers according to the characteristics high-lighted by the churn models. But getting business man-agers to embrace analytical findings remains one of his biggest challenges. Paychex has a “shoot-from-the-hip” culture, he said. “When you’re dealing with people who are used to using their intuition, you have to show them the benefit [of analytics].” To help get people on board, he’s leading an internal education campaign on the

business value of customer analytics. Media articles on big data’s potential benefits have also helped raise analyt-ics awareness, he said.

The Danger of Knowing Too Much There’s a potential danger, though: going too far. Know-ing when to stop is an important part of analyzing cus-tomer data. Businesses might have mountains of data, but using that information cavalierly could make custom-ers uncomfortable—and drive them away.

Andy McNalis, senior manager of big data and enter-prise data warehouse administration, operations and development at Sears Holdings Corp., said at Predictive Analytics World that the Hoffman Estates, Ill., retailer analyzes customers’ Web browsing history, past pur-chases and demographic data to help set and modify product prices in stores and online. But McNalis said he and his colleagues have access to some customer data that they just won’t touch. For example, most Sears loca-tions have in-store Wi-Fi networks, and the company can

PHILIP O’BRIEN, risk analytics

manager at Paychex, uses data

on company size, payment

history and customer service

interactions to build models de-

signed to identify which corpo-

rate clients are looking to part

with the company and which

ones are satisfied.

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see when a customer is using a network to check prices on a competitor’s website. That could be a good opportu-nity to offer the customer a coupon, but doing so would show people that Sears is watching what they do online, which McNalis said is “bordering on the creepy factor.”

Customer analytics efforts also take some effort, he added—and there’s more to it than deploying systems and feeding data into them. Sears uses Hadoop clusters and a Teradata data warehouse as part of its analytics pro-gram; the analytics team writes algorithms in program-ming languages such as open source R and runs them

using Hadoop-based data analytics and visualization tools from Datameer. But skilled hands are needed to shape those algorithms into something that will generate useful findings, and to assess and analyze what they do find. “People think you can dump a lot of data into these things and a pony is going to come out the other end—or maybe with Hadoop an elephant,” McNalis said. “It’s not.” n

ED BURNS is site editor of SearchBusinessAnalytics. Email him at [email protected] and follow him on Twitter: @EdBurnsTT.


https://twitter.com/EdBurnsTT


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CONNECT IT CELSO MELLO

YOU’RE AT THE vendor selection stage of a project to replace a legacy system. Well-trained sales representa-tives from leading software companies are invited to demo their products for you. Whenever they’re asked about functionality, the reps make a soothing state-ment—“Sure, our software can do that”—and move on.

The vendors talk about cloud, mobile, social, business intelligence: They hit all the buzzwords. Project team members evaluate each product according to business needs and functional requirements. All that information is entered onto a scorecard, which accounts for license and implementation costs, too. One of the vendor candi-dates comes out ahead and wins the contract.

Sounds familiar, doesn’t it? That’s because it describes how most organizations select software suppliers. It’s not a bad approach, but the criteria are biased toward

functionality and initial investment. Factoring in these alone is myopic. Remember—you’ll have that software for the next 10 or 20 years.

According to Susan Galberaith and Andy Kyte at re-search outfit Gartner, after 15 years, the original project cost will be somewhere between 2% and 16% of the total cost of ownership.

I replaced one of my legacy systems in 2009 and have already spent almost three times the original investment in additional expenses with the same vendor since. About a third of that consists of annual maintenance and support fees. The balance is largely consulting fees for enhancements and integration with other systems. And the original investment is now only 26% of what I’ve spent altogether with the software vendor, just five years since the go-live date.

You might argue that the enhancement spending could have been avoided had we selected a product with a better fit or changed our business process so enhance-ments wouldn’t be required in the first place. But, again, the whole selection process was geared to maximize fit, so the first argument doesn’t hold water. And changing a business process to adopt the system—how realistic is that in today’s business operations, really?

A well-managed selection process should focus more on evaluating the required effort to integrate software

Stop! In the Name of TCOThe software selection process focuses too much on features and functions and not enough on future enhancement and integration.

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with other systems, and the likely cost. It should also cover the availability and price of consulting services for ongoing software enhancements. Functionality is obviously important. But from a cost perspective, it’s not as high a priority as long-term integration and enhance-ment needs are. Or it shouldn’t be.

Devote less time to reviewing features and more to learning what it will take to create interfaces linking the new software with existing systems. Scan the local consulting market for expertise on the new software as if you were recruiting. Modify your selection criteria so the integration effort and cost of consulting are weighed pro-portionally to what they ultimately will represent in the total cost of ownership.

If you do all that and business executives still insist on using functionality alone as the basis for selecting software, make clear that it’s a tradeoff. They should demonstrate how the features they’re so keen to get will pay off over time, outweighing the higher TCO compared

with alternate technology choices—“We want this CRM system because it will eliminate the need for some of our other BI tools.” After all, a business case is a business case, and dollars and cents are the building blocks. n

CELSO MELLO is the CIO of Reliance Home Comfort, a supplier of home heating and cooling systems in Toronto. Email him at [email protected].

CONNECT IT | CELSO MELLO

FUNCTIONALITY IS NOT AS HIGH A PRIORITY AS LONG-TERM INTEGRATION AND ENHANCE MENT NEEDS ARE.

A Smart Shopper’s GuideTO AVOID SPENDING more over the long term on

software, adjust your selection habits. Here are

some pointers:

n Evaluate what it will take to integrate new

software with existing systems.

n Calculate staff training time and expense.

n Determine how much you need to spend on

consulting services for future enhancements.

n Encourage business execs who want to focus

on functionality to justify it in the business

case.



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I’VE BEEN THINKING about expertise lately.In social media, it seems that everyone is an expert.

All it takes is a YouTube account or a blog to dump your thoughts, and you’re a virtuoso on social conversation. But can we discern the frauds from the authorities and use social platforms for real business change?

I haven’t figured it out yet. There are lots of terms both groups throw out in describing best practices: engage-ment, collaboration, crowdsourcing, metrics.

And they agree that not every interaction on social platforms constitutes meaningful engagement—but few can define what that looks like. If we could just bottle the secret sauce, we could create a template for companies of different sizes, industries and audiences.

Still, even if social media expertise is an elusive

concept, I have learned some rules of the road:

n Choose the right platform. Organizations need to con-sider where they put their social media energy. If yours focuses on career building, for example, LinkedIn is go-ing to make more sense than Pinterest is.

n Beware of social sprawl. It goes something like this: Alight with the fire of social media, organizations try to be everywhere at once. They open accounts on Facebook, Twitter and LinkedIn, launch company blogs and more.

But then they wake to the reality that they don’t have the resources to be in so many virtual spaces—and they don’t have healthy audiences in all of them. Often, orga-nizations have to pull up stakes.

n Enlist community managers. If you build it, they won’t necessarily come. You have to keep building it for your audience to show up and grow. Most (real) experts agree that successful communities have to be guided, coaxed and drummed up by managers as well as by members. Communities that drive business innovation don’t hap-pen without someone steering the conversation.

n Invest in a top-notch security framework. As Forrester analyst Rob Koplowitz argues, the real

Rules of EngagementIn a field where everyone is an expert, it’s hard to know whom to turn to for pointers on forming a social media strategy. But there is a right way.

HINDSIGHT LAUREN HORWITZ

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HINDSIGHT | LAUREN HORWITZ

advancements in social communities have been in groups whose members can exchange ideas freely but have tightly controlled security permissions.

For example, members can post comments on how to make a product more user-friendly, but then an inter-nal product development team can take those ideas and brainstorm without worrying that, say, top-secret innova-tions might leak to the outside world.

n Get executive support. Social strategies almost al-ways fail if executives aren’t on board. Grassroots efforts won’t get off the ground if execs don’t lead by exam-ple. TechTarget, which publishes Business Information, launched a Yammer offensive about four years ago, but without ongoing support from the top, it fizzled.

I hope we’ll hear more about best practices that can make a difference for social business. Maybe we’ll even discover the secret sauce that distinguishes between suc-cess and failure in social business strategy.

Get your bottle ready. n

LAUREN HORWITZ is an executive editor in TechTarget’s Business Applications and Architecture Media Group. Email her at [email protected] and follow her on Twitter: @lhorwitz.

Read more columns by Business Infor-mation editors.

Business Information is a SearchDataManagement.com e-publication.

Scot Petersen, Editorial Director

Jason Sparapani, Managing Editor

Joe Hebert, Associate Managing Editor

David Essex, Executive Editor

Lauren Horwitz, Executive Editor

Jan Stafford, Executive Editor

Craig Stedman, Executive Editor

Linda Koury, Director of Online Design

Doug Olender, Publisher, [email protected]

Annie Matthews, Director of Sales, [email protected]

TechTarget, 275 Grove Street, Newton, MA 02466 www.techtarget.com

© 2014 TechTarget Inc. No part of this publication may be transmitted or re-produced in any form or by any means without written permission from the publisher. TechTarget reprints are available through The YGS Group.

About TechTarget: TechTarget publishes media for information technology professionals. More than 100 focused websites enable quick access to a deep store of news, advice and analysis about the technologies, products and process-es crucial to your job. Our live and virtual events give you direct access to inde-pendent expert commentary and advice. At IT Knowledge Exchange, our social community, you can get advice and share solutions with peers and experts.

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