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Jebin Cherian M1020 MMS SIMSREE

It can take a mountain of data to arrive at the elusive "360-degree view" of a customer -- but as AOL Germany found, it's an effort that can really pay off. With competition fierce among Internet service providers (ISPs), AOL Germany needed to do all it could to better understand customers and target its marketing offers. That was a problem when it had access to only a central, corporate data warehouse in the U.S., according to Fred Trling, director of database marketing.

The corporate data warehouse stored 15 basic attributes of each customer -- and didn't integrate any data from local German systems, such as call center, billing or loyalty program data. Limited network bandwidth made any serious analyses difficult and time-consuming, but marketing was begging for much more insight into customers -- for an understandable reason. "This is one of the most competitive [ISP] markets in the world," Trling said. "For example, in 2005, an ISP flat rate was 20 euros. Now it's down to 0 euros."

That means that customers get basic ISP services such as email free of charge, and providers make their money on line charges, premium features and bundles of products. It also means that marketing must be highly targeted, focusing only on customers who are likely to buy a product. AOL Germany needed a much better understanding of customers than it was getting from just 15 attributes and limited analyses. So, in 2002, AOL Germany developed a customer data warehouse to act as a central repository for analysis activities.

After evaluating 11 vendors, the company settled on Westmount, Quebec-based SAND Technology Inc.'s Analytic Server, in part because of its compression capabilities. A SAND data warehouse is typically one-third the size of an equivalent indexed relational data warehouse or data mart, according to the vendor. And AOL knew it would need lots of space. "With SAND, we now have a data mart which has more than 700 attributes describing the customer," Trling said.

That amounts to a warehouse that's approximately three terabytes, as opposed to the eight to 10 terabytes in a traditional, uncompressed version, Trling explained. The 700 attributes stored for each customer are compiled from about 70 different source systems, including customer databases, billing systems, callcenter activities, click-stream and data related to premium services, such as VoIP or fax services. With systems in different time zones, Trling said, it takes a bit of coordination to get all of the data into the warehouse. Every night, the different source systems push data to a staging area.

An extract, transform and load (ETL) tool with embedded data quality checks (from Lexington, Mass.-based Ab Initio Software Corp.) then delivers cleansed data to the SAND Analytic Server. From there, Trling's team uses a layer of frontend analysis tools, such as Business Objects and SPSS, to create rich customer profiles and support marketing campaigns. Creating enriched customer profiles with accurate, up-to-date and complete data has enabled sophisticated segmentation and propensity modeling, Trling said.

"Now, we have a 360-degree view of customers because we have nearly everything which describes an AOL customer in one database," Trling said. "If you look at up-selling or cross-selling campaigns, [you] see that the enriched profile and up-to-date data have increased the response rate 5% to 20%, depending on the type of campaign." The new system helped AOL Germany better support its loyalty programs, create a more accurate cancellation prediction model, and select the best users for the "sign on a friend" referral campaigns. It's also been able to better target up-selling and cross-selling campaigns, such as its push to upgrade customers from narrow-band to broadband connections.

Trling said that while AOL hasn't attached ROI expectations to the warehouse, which it sees as more of an infrastructure investment, the analytic applications that it supports have made a major impact by increasing the effectiveness of marketing campaigns. For others considering similar projects, Trling suggested that companies should carefully consider scalability and maintenance needs. He wants his team's time spent on data analysis, not data management. "There are some data warehouse systems that are highly complex to run. I prefer systems which are more intelligent, like SAND," Trling said. "Low maintenance [needs] help you run it efficiently and put the time and effort into analyzing the data."

Data warehouse case study: Midsized insurer goes enterprise with data warehouse

Executives at New York Central Mutual Fire Insurance Company (NYCM) knew the firm needed a formal data warehouse, but it took an outside consultant working on another project to get the ball rolling. At the time -- mid-2005 -- NYCM was working with AXIS Integrated Solutions to help train staff on the Actuate reporting tool. As that project came to a close, the Edmeston, N.Y.-based firm turned its attention to its data management needs.

Until then, NYCM, which sells home and auto insurance through a network of more than 1,000 independent agents, had no formal data warehouse and was using legacy databases to create reports for its agents in the field. It was becoming difficult to keep up with NYCM's data-related needs, which were growing more complex by the day. "We essentially had a static reporting environment," said Steve Cembrinski, NYCM's senior vice president of information and technology.

NYCM was reluctant to pay for a big ticket implementation like Cognos or Oracle. Instead, AXIS and NYCM hoped that Burlington, Mass.-based Kalido -- which recently released its new Information Engine suite, combining its data modelling, data warehouse, and master data management offerings -- could supply a data warehouse robust enough to handle NYCM's growing data needs at an affordable price. Still, Cembrinski and his team were hesitant.

In addition to the potentially high cost of deploying a comprehensive data warehouse, stories of other companies' failed data warehouse deployments gave them pause. But with the backing of AXIS, which had a longstanding working relationship with Kalido, and realizing that its current data management structure was simply not doing the job, NYCM decided to take a chance. "Based on where we stand in the marketplace and where we need to be, we need to take a serious look at what our data can tell us about our business," Cembrinski said. "We need to delve deeper into what our experience has been."

Kalido, it turns out, was taking a chance of its own with NYCM. While not among the BI heavyweights, Kalido is no slouch either, counting Shell, Philips and Unilever among its key accounts. With just over 1,000 employees and under $500 million in sales, NYCM was significantly smaller than most of Kalido's customers. But the vendor gave NYCM a price break, Cembrinski said, in order to tap into the lucrative small and medium-sized businesses market.

"They made it feasible for us to initiate a relationship with them," he said. "The accommodations helped the process." He declined to give detailed pricing information. To begin the project, NYCM initiated a proof-ofconcept to see whether Kalido's rapid deployment claims were "true to form," said Jim Fitzgerald, NYCM's business analytics program manager. NYCM gave Kalido a set of data to cleanse, a process Kalido said would take a week. Kalido eventually finished the process, and NYCM was happy with the results, but it took more than double the estimated time -- between two and three weeks.

"They're still a young company going through a steep evolutionary curve," Cembrinski said. "When you have a young company still expanding their customer base and improving their features, there's always going to be a few bumps in the road." Despite not meeting its own timeline, Kalido impressed NYCM with its ability to handle the insurance company's disjointed data management systems and processes, and with its customer service.

Kalido's president, Bill Hewitt, even visited NYCM's headquarters to reaffirm his commitment to the project, Cembrinski said - a personal touch that went a long way with NYCM executives. With the proof-of-concept complete, NYCM decided to sign on with Kalido and move forward with a full-scale data warehouse deployment in early 2006.

NYCM has been working with Kalido on the project for the past two years, including cleansing NYCM's customer and financial data and integrating it via ETL tools into Kalido's Dynamic Information Warehouse. Later, NYCM plans to employ Kalido's master data management system as well.

Cembrinski hopes that with Business Objects reporting tools on the front end, NYCM insurance agents will eventually be able to self-generate reports and access data to identify new and better ways to serve the company's 500,000-plus customers throughout the Empire State.

He hopes, for example, that in upstate New York -- an area prone to weather-related emergencies during the long winters staff and agents will be able to examine historical trends via the Kalido data warehouse to better prepare customers before a catastrophe happens.

He also said Kalido's ad hoc query capabilities should help agents resolve insurance claims faster. Despite the lengthy data cleansing and integration process, Cembrinski said he expects his patience to pay off in the end.

"We've still got a long way to go," he said. "We're kind of peeling the onion back here. What we're hoping is to service a lot of different needs -- strategic, operational, ad hoc reporting. The way the Kalido engine handles the data, we think Kalido's going to take us a long way down the road."