Taking full control

• Article 6 of 6
• Database Marketing, September 2006
• View a PDF of the original article ~ 1.6MB

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Sometimes, it takes an abbreviation to make a technology popular. Sometimes, it even takes two. For years, marketing has been extolling the virtues of a single customer – and potentially prospect – database for the enterprise. With data being cleaned and updated for everyone in an organisation whenever there’s a customer contact point, not only will marketing see benefits from having access to all possible information about customers, but other departments will be able to cut costs and get a more accurate understanding of customers. Unfortunately, the single customer view failed to find much traction.

Now, it seems with the advent of the twin abbreviations CDI (customer data integration) and MDM (master data management, which focus on integrating all enterprise data, rather than just customer or prospect data), the rest of the enterprise is finally taking the single customer view seriously. More and more organisations are beginning projects and starting pilot schemes designed to unify enterprise. Forrester Research predicts growth rates of 42% in 2006, 35% in 2007, and 30% in 2008 for software licences and professional services related to CDI. The question is, if marketing now has to share its data and cleaning skills with the rest of the enterprise, will it find itself losing control of its own data in this CDI age?

The real reason for CDI’s growth in popularity isn’t especially clear. Although concerns about compliancy will figure in some companies’ outlook, only a small percentage of organisations are actually affected by compliancy requirements.

Similarly, advances in technology don’t provide any particular clues. Although there is growing support for CDI and MDM from mainstream vendors such as SAP, which had its own MDM product for some years and added A2i’s MDME to its portfolio last year, much of this technology has been available for some time.

The advent of service-oriented architectures (SOAs) hasn’t really provided anything except a more suitable platform for CDI and a reason to discuss it, rather than that final piece that solves the single-view technological jigsaw puzzle. While some organisations such as Harrods have implemented CDI using a SOA, that’s a choice made from practicality rather than enablement.

In fact, according to Gartner analyst Andrew White, technology has little to do with the increase in CDI and MDM’s popularity. “Despite vendor claims, master data management has more to do with governance, process, data quality, metadata management and stewardship than simply technology.”

Instead, according to Arthur Kay, managing director of Synaxis, the increased interest is simply because “it’s suddenly dawning on people as a good thing to do.” It’s a viewpoint corroborated by Andy Hayler, chief strategist and founder of Kalido.

“What we’ve seen in early customers is it’s in response to very hard-nosed business issues and a dawning realisation by large companies that ERP has not fixed the problems of producing a single customer view.”

Harrods, for example, realised it was losing out considerably by having different silos of customer data. David Llamas, Harrods’ IT director, recalls that the move towards a single customer view was motivated mainly by the costs of managing the company’s various silos. “It was a complex environment that was difficult and expensive to manage, with systems not integrated.”

But for whatever reasons, CDI and MDM are creeping into the enterprise, they bring substantial benefits to marketing and other departments. By having a single customer view tied into all systems throughout the enterprise, marketing can have data that has already been cleaned to a reasonably high standard; any new data can be matched and automatically deduped on the fly; all customer and prospect contact points will be known so messages can be more accurately targeted; and all of this can be done in real-time.

Indeed, many marketers welcome the potential benefits CDI offers. Say Synaxis’ Kay, “It puzzles me it’s not something that’s been high on the agenda. It should have been 15 years ago. At last, IT is doing something of use to marketing. It will mean data cleansing will done properly at source. It should take a shorter period of time as well.”

Bill Marjot, CMO of SmartFocus, says it’s what marketing has always dreamed of. “It’s a coming together of online and online marketing, logically, in one place. It’s going to have huge effects on marketing and have an upside in terms of ROI.”

In practice, it’s certainly fulfilling its promise in some companies. Harrods was able to unify its marketing information with its sales information from all the various store departments. It was then able to improve response rates by only targeting customers that had spent more than £25 in the store, something that has now saved it £40,000, despite having only been introduced since the start of the year.

Steve Tuck, chief strategy officer for Datanomic, notes that one of his customers, a building society that has implemented a CDI, has been able to introduce marketing processes at all customer contact points as a result. “There’s a dynamic marketing message in every customer interaction. They can even have targeted messages in branches.”

MDM brings even greater benefits according to Kalido’s Hayler. Marketing can have access to far greater information about product ranges, sales of items and other data useful to campaigns. BP, for instance, has 350 different types of master data, many of which, including price and brand data, have been tied together to improve marketing. Equally, in service organisations, it might be important for marketing to know about problems with service repairs and complaint handling, so they can employ various methods to placate and retain the customer.

The greater improvements required for the whole enterprise that will be necessary to bring about MDM will, ironically, result in less work being necessary for the CDI portion of the project as well. CDI will simply be one spoke in the MDM wheel, rather than an extensive reengineering project in itself.

That’s not to say CDI and MDM are going to be quick gains for every enterprise: if it were easy, every organisation would already have done it. Instead, organisations need to look at the cost implications of the project and to work out the process changes as well as the technology needed to implement it. That will frequently mean focusing on quick returns, which in turn makes a more piecemeal approach to MDM more likely and CDI a better first choice.

With all these considerations, though, the overwhelming issue is that there will have to be change and that the rest of the enterprise will be doing things that marketing has often had to do for itself. While often IT has involved itself in ETLs and other forms of data extraction, this has traditionally been so that marketing can then either clean the data itself using its own tools and datasets or by passing it to a third-party with greater expertise or more varied datasets.

In a CDI world, however, data cleansing will often be done at the point of contact with the customer or prospect. Large-scale extraction, cleaning and reintroduction of data back into the main database may be frowned upon or even prohibited. The kinds of loose matching and de-duping that marketing may be able to do with its own data will be completely out of the question when dealing with operational data. In short, CDI could lead to certain losses of freedom for the marketing department in terms of how it deals with data. However, not all of these losses are inevitable and some may even be beneficial.

“A lot of these decisions people will say are made for technical reasons but are really political decisions,” says Richard Kellett, head of technology strategy at SAS. Often, by using politicking within the organisation it’s possible to effectively offload the work formerly done by the marketing department to IT or another department while still maintaining control and the ability to perform additional work.

In part, this can be done through technology. A ‘hub’ or bus is typically required for CDI to integrate disparate systems, since it’s unlikely that any organisation is going to rip out its existing infrastructure in favour of a new system. Since data can therefore stay in existing databases, just linked through the hub to other databases, marketing is still able to add fields to records in its own database. The differences will be that the address data either need no longer resides in marketing’s database or will be derived from a cleaned database; and that other departments will be able to access marketing’s data, just as marketing will be able to access their data.

This will be especially true in SOAs, where databases and services will be loosely coupled together to answer specific business needs. “Loosely coupled is how it’s going at the moment,” says Ed Wrazen, VP International of Harte-Hanks Trillium Software. “It’s difficult to get one database that suits the whole business.”

This effectively gives the optimum set-up for both marketing and the rest of the organisation, with marketing able to do live, instantaneous ETL – hopefully, with very little T, if the rest of the organisation is doing its job properly – perform any specific operations it wants on the data it has in its own database, and then give back the results of its work to other departments.

The challenge will be in ensuring that other departments are getting data quality to a level that suits marketing’s purposes and that they’re exposing any data they might have in a way marketing can access.

Although many vendors will argue that board-level sponsorship by a marketing-friendly sponsor will be the best way to ensure this, board-level sponsorship of any IT project is almost impossible. And for longer term projects, the turnover of sponsors in the organisation will mean it unlikely that enthusiasm for the project can be maintained over time.

Instead, a business unit that receives input from other units within the organisation – including marketing – should be in charge of any CDI/MDM project. In particular, the experience of marketing with data cleansing can be of help and should help ensure that the data is in a form close to or potentially even in exactly the state required by marketing for its particular needs.

This approach will avoid some of the classic problems found during data warehousing projects, for instance, which could be seen as one of the first real attempts to do CDI. “Everyone understands the idea and its value, but if you hand ownership to IT, people get annoyed,” says SAS’s Kellett “Pretty soon, you get databases springing up all over the place. You can only solve this by getting people sitting down and talking instead of rushing around.”

Indeed, says Kalido’s Hayler IT should never be placed in charge of this unit. “If it is, it won’t work. They shouldn’t make the judgements about what’s right and they don’t have the clout in the organisation to make the project work.” It’s potentially the finance department that may well end up as ‘data stewards’, he says.

By passing off data stewardship to this near-autonomous unit, most of the concerns about additional work for marketing can be avoided as well. The unit should ensure there are business rules that are applicable to all departments and that everyone can use and modify the data in the CDI without unduly affecting the other departments.

This will require changes in the organisation’s culture: one of the biggest problems in CRM, for instance, was the refusal of sales people to enter data or enter it in the correct format. Says Datanomic’s Tuck, “On any project of this type, people need to understand the value of information. It needs to be evangelised. Otherwise, people won’t be motivated to accurately record data. In call centres where the sole measurement of performance is call volume, the most common names entered are ‘Siebel’ and ‘…’. Rudimentary data verification can fix that, but you need deeper cultural changes. That’s by no means easy – you have to make the case to them.”

Marketing will therefore have to be sure that the needs of other departments are kept in mind when using data – and vice versa. Much of this can be done, however, by the unit establishing ground rules on how to deal with CDI data and how to use external datasets. Indeed, the unit may decide that much of this work need be done by someone other than marketing, but to marketing’s specifications, just to avoid any possible problems.

While marketing may indeed lose some control over how the data is cleaned and used within the organisation, it might end up missing that responsibility as much as it misses the responsibility of cleaning the mugs at the end of the day after the duty’s been passed to a new cleaning firm.

Of course, things can always go wrong. Projects can fall apart when sponsors leave. Technology can fail to live up to vendors’ promises or the budget might not be there to make it work properly. People can refuse to adapt to the new systems, spreading poor data to every department. SmartFocus’s Marjot says that marketing has to be aware of this from the outset, plan accordingly and make everyone be aware of the possibility.

“You need to recognise the possibilities of failure exists,” he says. “What if IT’s not ready when it says it’s going to be ready, for instance? You need to have plan B and you need to tell IT you have plan B – or ask them to come up with it themselves. That’s a lot more candid than most would be historically, but there’s no way to avoid human nature.”

As with data warehousing, CRM and single views before it, CDI offers much to the organisation that can implement it correctly. Although there is definitely an upswing in popularity, that doesn’t mean there’s going to be any greater chance of success than with its predecessors unless lessons are learnt. If they are, marketing will gain from CDI, particularly if takes the lead and ensures its interests are well represented – and that others’ aren’t given a higher priority.

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