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Reshaping the business landscape Force 1: Data management Force 2: Decision support Force 3: Agile services Optimizing customer relationships For more information
Today, we stand at an inflection point where breakthrough business value from BI and IM investments can be unlockedwhile also meeting the new challenges of rapidly changing business processes and requirements. By harnessing the power of emerging destructive forcesdata management, data support, and agile services forward-looking organizations can leverage this approach to enhance customer relationships, financial functions, and supply chain performance to improve product and service development, reduce risk, and ensure regulatory compliance. HP research suggests a significant amount of blocking and tackling must occur before companies can unlock transformational business breakthroughs. The question remains: How do you prioritize investments to realize those breakthroughs faster? One approach is to continue to invest deeply in the familiar obstacles to BI and IM success, such as data integration, consistency, and quality. Another approach is to apply surgical investments in these areas in the context of a specific business domain (for example, customer or risk) and then move rapidly to investments in the emerging disruptive forces that are combining to create an inflection point of unique opportunity to drive transformational business benefits. Over the years, similar inflection points have emerged, each resulting in functionality leaps that unlocked new business benefits. For example, enterprise resource planning and customer relationship management applications brought rigor to backand front-office business processes and created a common data language for the enterprise. Large-scale data warehouse technologies brought together this cross-functional enterprise data for unprecedented new business insights. Although value clearly was created by investments in these respective disciplines, the breakthrough innovations emerged from the white space between these adjacent domains. This example of reading between the lines is the Law of Diminishing Returns in action.
Did you know? The HP and TBR BI Trends Study (April 2011) revealed that the top three barriers that affect an organizations ability to achieve its objectives with BI are data integration, data consistency, and data quality.
Unlocking the transformational business benefits can be accelerated by exploiting three emerging disruptive forces that will reshape business: Data managementLeveraging semi- and unstructured data and integrating it with traditional structured data sources in your customer data warehouse Decision supportReal-time decision support and pattern-based strategies embedded in business processes Agile servicesAgile information management and analytical platforms and new delivery models to speed time to value You must also decide where to apply these disruptive forces within your organization. HP research suggests that the customer domain is where many companies are prioritizing their investment. In this paper, HP will consider a representative retail banking customer named Mary. What can a retail bank know about Mary today using only traditional BI and IM processes and technologies? Mary holds a personal transaction account with Bank X. She is a rising executive and earns $135,000 per year. Her salary increased 16 percent last year. The bank knows Mary is likely to be a valuable customer over the long term, with many up-sell opportunities for a mortgage, a brokerage account, and credit cards. Mary has logged several service complaints, using email and call center channels to seek resolution. The banks records indicate Marys service complaints were successfully resolved by a customer service manager after her issues had escalated over a number of weeks. Recently, Marys debit card was refused by a merchant due to a system issue at the bank. For Mary, this was a great inconvenience and possibly the last straw in her banking relationship. That is all useful, accurate informationbut it fails to create a complete view of Mary as a customer. Leveraging the three disruptive forces of data management, data support, and agile services, the bank could build a complete and accurate customer profile and serve Mary much more effectively. To fully appreciate these three disruptive forces, it may help to examine how each can be used to better understand and serve Mary.
Did you know? The HP and TBR BI Trends Study (April 2011) revealed that integrating and analyzing unstructured and semi-unstructured data is a top priority for many companies during the next two years. Doing so has a positive impact on driving customer value, sales, and performance while also helping resolve important business challenges:
Optimizing customer relationships Improving product/service deployment
The onset of new social media technologies has fundamentally changed the way people communicate. Information flows between friends and family efficiently and instantaneously, to any location, via numerous devices. Consumers now also use social media to communicate with and about companies that provide them with products and services.
Did you know? Using the information customers provide in email and call center complaints and share with their social network, you can:
Correlate service history, product usage, and transaction patterns to identify service dialogue opportunities Improve overall customer satisfaction and loyalty
Channels for these types of communications go well beyond social media networks to include blogs, forums, and chat rooms. The people communicating through these new channels are also information consumers, and they expect to interact with product and service providers via these channels. What they do and say online illustrates their lifestyle choices, buying preferences, and brand perceptionpotentially valuable customer profile data for companies seeking to gain their wallet share. Recognizing the value of these new sources of social data and leveraging them appropriately is a relatively new challenge for many organizations.
Even before the explosion in social media-based customer data, companies struggled to leverage other forms of semi-unstructured and unstructured contentincluding call notes, email text, and audio files. Companies have often neglected these sources of customer data, focusing instead on the more straightforward task of integrating their structured customer transaction data. Consider the following scenario: A new source of unstructured data is created when a consumer speaks to a customer service representative in a call center. The representative types notes during the call. These notes contain valuable information about the customer, such as a complaint, service issue, or feedback about a product. The data is collected by internal applications. But what happens next? How will those unstructured call notes be used in the future? Is that information made available to the customer service department when it responds to an email from the same customer soon afterward? Does the information affect targeted banner ads when the customer logs in to the vendors website? Will a call center representative make a more appropriate offer to that customer as a result of this new information? Does the information lead to better understanding of brand perception and future product or service design?
Most companies will need to modify their technical environment to support social intelligence initiatives. For example, more customer data must be available at the point of contact, enabling targeted marketing at any end point. Significant first-mover advantages exist for companies that execute an effective social intelligence strategy before their competitors.
Did you know? One customers negative purchasing or service experience can be broadcast to many people across numerous channelsincluding aggregator sites that display all exchanges between participants, positive and negative. Any negative posting has the potential to sway any/all chat participants. Rather than lose any participants, companies can use social intelligence to stop a problem before it occurs by applying proper segmentation strategies, enhanced by adding social value.
Did you know? According to the HP and TBR BI Trends Study (April 2011), data integration, data consistency, data quality, and speed are the top barriers that affect an organizations ability to achieve business objectives with BI. Today, enterprise-wide data governance/quality/integration is the top BI/IM/ analytics technology trend.
But to deploy and capture the value of these new business models, a more structured, corporate-wide approach to managing data is required. The Data Warehouse Institute (TDWI) calls this emerging discipline unified data management (UDM). According to a recent survey by TDWI, only 11 percent of respondent companies report coordination (of corporate data) at high or very high levels. But 90 percent of the companies surveyed believe they will need to be at moderate or higher levels of coordination within three years. McKinsey & Company reports that 70 percent of all U.S. market value created over the past three decades resulted from the application of knowledge skills. Today, companies with the highest concentrations of knowledge workers can expect three times the return per employee, compared to companies that do a poorer job of collaborating and exploiting information assets. Clearly, data management practices governance, quality assurance, metadata management, and the likeare essential to thriving in todays economy. But how does UDM tie to business intelligence? The answer lies in the business outcomes: Recognize that information has a lifecyclefrom creation to archival to disposaland information needs to be rationally managed throughout that lifecycle. At each stage of its life cycle, data has a fitness for purpose; timeliness and access characteristics vary accordingly. Data offers value throughout the life cyclefrom business value creation to cost avoidance. BIs deep analytics opportunities depend on the right access to the right high-quality, well-managed data at the right time.
Did you know? To be effective, a consumer segmentation strategy must be able to differentiate between customers using more than their demographic and purchasing profiles. The segmentation strategy must also measure potential value based on social networking. The ability to discriminate between consumers enables customized treatment based on existing and predicted engagement patterns with any product or affinity product. Customized treatment also incentivizes consumers to advocate other products to their social network while providing new ways to crosssell and up-sell products or services.
Twenty-first century economies are witnessing the emergence of data-driven business models. Consumerization of information creation, access, and usage is naturally leading to co-creation product/service development models, forever redefining the relationships between buyers and their suppliers. Leading companies are beginning to monetize the knowledge they glean from corporate information in ways never before seen.
Today, consumers create information with every transaction and interaction and expect the ability to access information anywhere, anytime, and from any device or location. This information is of considerable interest to service providersthey can use it to precisely target each consumer, and ultimately sell more services. This fact is true for wireless service providers, healthcare service providers, and many others. The bottom line is that information is extremely valuable at every stage of its life cycle, which places greater importance on unifying data management with business intelligence capabilities.
A growing trend calls for moving analytics out of the back room and into the hands of line-of-business professionals. To meet the demand for intuitive tools that any business worker can use, BI and analytics vendors are building social capabilities and easy-to-use search techniques into their tools, chiefly as a means to complement or enrich the analytic experience and mask underlying complexity. This technology evolution has the potential to change the rules for how fact-based decisions are made in large enterprises. Although the need for rigorous, statistically based analysis will remain, complementary capabilities will be added. These will include analytical roles and processes that reside in the organizations functional areas This new hybrid analytical process will require an entirely new process for defining business questions, assembling the necessary data sets, and testing and deploying richer analytical insights. Following a forward-thinking BI strategy enables companies to manage both disruptions simultaneously while also paving the way to adaptive business processes comprising workflows that can rapidly reconfigure based on detected patterns.
Did you know? IDC recently defined a decision management framework that stretches beyond strategic decisions to include operational and tactical decisions and provides the foundation for the next generation of decision support.
Events occur at all hours of the day and night. All events must be monitored, and the system must determine if any given event is an exception (for example, requires action), which creates a high volume of data. After the data is in the system, businesses can apply real-time analytics against the information.
Did you know? The HP and TBR BI Trends Study (April 2011) indicates that real-time data management, analytics, and event processing help companies keep pace with the changing environment and affects strategic decisions. Real-time BI helps resolve the business challenges of optimizing:
Customer relationships, reducing business risk, and ensuring regulatory compliance Financial management functions Supply chain performance
Although the concept of OBI has been considered for several years, it is now a trend. Today, the OBI domain is better known and understood, so the technology is being more widely deployed. The nature of todays always-on marketplace means companies need to respond faster to customer requests and problems. Another factor that contributes to OBIs growing favor is the ever-connectedness of companies with their partners and suppliers. In our business environment, always-on connectivity is no longer a goal; it is a requirement for success.
Given Marys influential blog and her previous customer-service problems, she should receive the best possible service to ensure she becomes and remains an advocate for the bank, not just a potential cross-sell target.
Did you know? A mashup is an application that combines data, presentation, or functionality from two or more sources to create new services. Mashups make existing data more useful for personal and professional use. Typically easy to use, mashups offer fast integration with existing systems, and they frequently use open APIs and data sources to produce enriched results that were not necessarily the original reason for producing the raw source data.
Although the self-service trend began with the introduction of appliances, informationas-a-service and cloud-based offerings are now overshadowing on-premise analytic platforms. This enables businesses to use OpEx funds to rent the capacity they need rather than undergo lengthy CapEx procurement. Companies must weigh their desire to own and control their BI and IM environmentcoupled with their ability to differentiate from competitorsagainst the potential benefits of leveraging cloudbased BI solutions. The push for cloud deployment often comes not from IT but from business decision-makers frustrated by lengthy implementation projects and inflexible systems. For companies not interested in having a core competency in IT and BIand prefer to focus on their core competenciescloud-based BI solutions are particularly attractive. In a cloud environment, software upgrades are made without interruption to system availability. Other benefits include savings on implementation and product upgrade costs. The pay-per-user/per-month pricing structure typical of many cloud deployments can be particularly attractive; however, outsourcing the BI environment means accepting an external vendors product road map and knowing that your competitors may be using the same vendor. After you work from the same standardized capabilities as your competition, there is little room for differentiation. Should you choose to customize heavily, you may lose any long-term cost savings, as compared with an on-premise BI implementation.
Traditional IT data security primarily has been based on a perimeter model, where some form of physical or network barrier shields the corporate environment. Access to the environment is controlled and readily audited by a permission model, so any external attempts to access the environment can be detected and prevented. The growth in mobile/remote services has necessitated the implementation of a VPN (virtual private network) and other mechanisms to provide extended access to the corporate environment, which is still protected by a permission/encryption model. The emergence of cloud computing puts much of the established security infrastructure at risk. Arguably, private clouds are extensions of the secure network model, offering tangible business benefits in terms of cost and flexibility. Delivering public cloud solutions with robust and auditable security is a primary requirement. Provisioning BI and analytical services on sensitive corporate and/or customer data from the cloud will necessitate the highest level of security. As companies invest in social media analytics, technology is emerging to enable personal management and marketing. After these capabilities become widely available, companies will be required to consistently manage all consumer data and carefully observe opt-in/opt-out consumer preferences. The U.S. Federal Government is also currently reviewing its position on data privacy. It likely will enforce a model that restricts social media spama move that would have significant implications on U.S. consumer data management.
Did you know? The HP and TBR BI Trends Study (April 2011) shows that cloud computing for BI and analytics is a growing BI technology trend for resolving various business challenges: optimizing customer relationships, reducing business risk, and ensuring regulatory compliance; and optimizing supply chain performance.
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Copyright 2011-2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein. 4AA3-8174ENW, Created November 2011; Updated June 2012, Rev. 1 Share with colleagues