Not so long ago, businesses were caught up in the excitement of data warehousing. There was information to be had from your customers and your day-to-day business transactions—if only you could capture it. Today, the focus has moved from capturing the data to mining it: extracting, sifting through and manipulating the numbers and facts to give your company a competitive edge. On Feb. 1, 2005, CRMGuru.com founder Bob Thompson led a panel of experts in the business intelligence and analytics field in a round-table discussion on the fundamentals of business intelligence and the hot and heavy players in the market.
The following transcript was edited for clarity and length.
Definitions
Acquisition versus loyalty
A hot market
Niche-players and suites
Up-and-comers
Bob Thompson
I’d like to thank you for participating in CRMGuru.com’s panel on trends in business intelligence and analytics. I’m pleased today to welcome Fred Landis from Frost & Sullivan, Naras Eechambadi from Quaero and William McKnight from McKnight Associates.
We’re going to have a wide-ranging conversation about business intelligence and analytics. We’ll try to define those terms and, more importantly, talk about how these applications and tools pertain to CRM. We’ll discuss what’s going on in the market and have our participants share some quick tips for success.
To get started, I’d like to ask each of our panelists to tell us a little bit about the focus of their business and what their responsibilities are. Fred, would you like to lead off?
Fred Landis
Sure. I’m the research director for Frost & Sullivan’s CRM and Contact Center Gross Opportunities Service. We specialize in providing actionable intelligence, consulting and research on the customer relationship management industry and adjacent industries through a series of eight vertical markets, in addition to information technology on a worldwide basis.
Bob Thompson
Thanks, Fred. Naras, would you like to go next?
Naras Eechambadi
Yes. I’m the CEO of Quaero. Our focus is on accelerating the marketing performance of our clients. We do that through a combination of improving their marketing processes, increasing their ability to extract intelligence from customer analytics and customer data, as well as working on their marketing infrastructure and technology. We really bring a combination of process, intelligence and technology to bear to improve the ability of companies to improve the effectiveness and the efficiency of their marketing efforts. We do this in five major verticals: financial services, travel-related services, healthcare, hospitality and telecommunications.
Bob Thompson
Thank, Naras. It’s always a pleasure to have you on our programs. William McKnight, tell us about your firm and what you’re doing.
William McKnight
I’m founder and president of McKnight Associates. We turn dormant and inaccessible data into a competitive advantage for our clients using best-practice business intelligence techniques. We’re a business intelligence professional services firm. We have some vertical specialization in retail, healthcare, distribution and telecommunications. I also do a lot of work with some of the leading vendors in the space.
Definitions
Bob Thompson
We want to talk about business intelligence analytics and clarify what these terms mean and what it has to do with improving customer relationships. William, would you give us a quick definition? What’s the difference among business intelligence, data warehousing, marketing analytics? Or pick another term of your choosing. Help us understand what some of these different terms mean.
William McKnight
That’s a great question. I could be glib and say it’s all in the eye of the beholder as it seems to be not consistently understood out there, but I’ll try to explain a little bit from my perspective. Data warehousing used to be the broad term that also encompassed the business intelligence aspect of it. Data warehousing is really the back-end extraction and collection of data into a manageable environment for use in analytics, decision support and, in a lot of cases now, a lot of operational processing.
The use of that data is really what business intelligence is. The reason for the shift in focus in the marketplace from data warehousing to business intelligence is that business intelligence is where a lot of the investment is now. It’s where a lot of the rewards are for doing the data warehousing. It’s where a lot of focus is right now. Many companies have collected the data, and now they’re trying to mine it and turn that into a competitive advantage. That’s what business intelligence is all about.
I see marketing analytics as being a subset of business intelligence. It’s a subset that’s focused on information to assist in marketing campaigns, including many things that are related to the customer. You would be interested in marketing analytics whether you’re trying to increase the profitability of loyal customers; improve cost efficiency and effectiveness of marketing campaigns; increase cross-selling opportunities; reduce customer attrition and churn; provide customers with a single point of contact; or tailor offers, pricing and product components to appeal to a specific target group. These are all things that I classify as marketing analytics, as a sub-set of business intelligence.
Bob Thompson
So you’re using business intelligence as a pretty broad area. Naras, what’s your take on that? You’re a guru in the analytics area. Do you agree with what William said?
Naras Eechambadi
Oh, absolutely. I think it was a very, very good description of all of those topic areas, from data warehousing to marketing analytics. Let me, perhaps, just build on that, and drill down a little deeper. There are a couple of different areas of analytics—customer analytics, not just marketing analytics. One is just data mining, which is looking for patterns of behavior that will yield some insight into what kind of customers are easiest to acquire or which ones are the best prospects for cross-selling and up-selling or the ones that are at the greatest risk of attrition, which is where you focus your attention and loyalty programs on. That’s one class of analytics that can become fairly sophisticated in its application of statistical techniques.
Bob Thompson
Is this the same thing as data mining?
Naras Eechambadi
Yes, that’s exactly right. But the critical issue for most companies is operationalizing these things. Very often, data mining and analytics are kind of a back office thing that are not truly leveraged by businesses. And that is where a lot of the challenge is: How do you take those analytics and make them actionable, so there is a bottom-line return on those kinds of activities?
Bob Thompson
Fred, would you like to add anything?
Fred Landis
I think both gentlemen are pretty right on. I really look at data warehousing as that repository, as the lowest common denominator, where business intelligence is up one level and really makes action of the use of that data. And analytics is really that subset of business intelligence that is applied to marketing campaigns, for example, a functional area of analytics. But, by and large, I think they’re correct.
Bob Thompson
Let’s get into why this is important. I want to have more of a customer angle on this. I know there are lots of things you can do with these tools. But if a company is trying to be more customer-centric, trying to make more money with its customer base, could each of you give me one example of how it would use a tool? Pick whatever you like: business intelligence, data warehousing, analytics. But give me a specific example of how you would use these tools to be more customer-centric and make some money in the process. Naras, would you like to go first on this one?
Naras Eechambadi
Sure. One area where companies often get a lot of bang for their buck is in retaining their most valuable customers. When companies think about things like loyalty programs and retention programs, very often the way they will set it up, is: We want to let in as many customers as we can. It’s very numbers-driven at a very high level. Where analytics can add value is, typically: Most companies will have an 80/20 kind of rule, where a minority of the customers are producing a great majority of the profits and are disproportionately important to the franchise. What analytics can do for you is improve your ability to zone in on the most valuable customers, or people who could potentially become valuable in the future, and focus your programs in a way that is tailored to retaining just those people.
It may be that, even within that group of customers, there are people who are good customers for different reasons and need different reasons for staying within the company’s franchise. Analytics can shed a lot of insight into that. We find, typically, that companies that have very focused programs in this area—that are trying to just save a subset of the customers that are most valuable—have much more success and have much better return on investment than those who just try and save the world and end up saving nobody.
Acquisition versus loyalty
Bob Thompson
We found in some research that we did recently that a lot of companies want to spend much more of the money on acquisition, in general, so they’re not really prioritizing retention to the extent that, perhaps, they should. Do you agree with that?
Naras Eechambadi
Yes. I would say acquisition’s a lot sexier; it’s a lot easier to measure. I mean, a new customer is a new customer. And when you’re retaining a customer and you’re saving a customer, people can argue about whether the customer would have stayed in the franchise, anyway, despite your efforts or that the program was not responsible for saving them. That’s where analytics can be very useful. You can set up control groups and checks and balances that give you a true incremental measure of how effective your programs are so that people don’t end up taking either too much credit or too little.
But the reason companies don’t like to do that is it requires some degree of analytical sophistication, which they may not have. Acquisition, on the other hand, is a very simple numbers game, and it’s easier to track. So people gravitate toward that. And yes, I think companies are ill-served by focusing too much on acquisition. I think there’s a right balance for almost all companies to achieve between acquisition and retention.
Bob Thompson
William, another example, please?
William McKnight
I think I’m going to pick up on loyalty programs. That’s something that everybody can grasp because we’re all consumers of various stores and web sites, and we’ve learned that we can build some traction with these entities through purchasing.
You take a grocer. What some grocers have been able to do is get away from the widespread newspaper-oriented marketing that goes out to the masses, including to the people who may not be the best customers for you. Then, you take that down to a segmented—or one-on-one—level, where you classify your customer base into, say, deciles along different performance characteristics. Then you get into more “couponing,” or even carding, type of approaches to maintain the loyalty of your best customers. How these tools help is they give you a jump-start on executing this strategy.
But it behooves us all to be careful and not over-rely on these tools, although they do provide you with valuable metrics that you would never calculate on your own. There’s a significant amount of business process change that must occur in order for a company to become more customer-centric in its approach. It’s more than just a tool.
Bob Thompson
So you would focus in the loyalty area. That’s really what being customer-centric is about, after all.
William McKnight
Loyalty of the customers. I think it starts with segmenting your customer base.
Bob Thompson
Fred, another example?
Fred Landis
Certainly this is all about segmentation of one version or another. I would agree with what the other gentlemen said and make one other point: that retention and acquisition is not a zero-sum game; it’s not an either-or. You have an example in the telecommunications industry, where a few years ago, it was all about acquisition. Now it’s about retention or the saturated market. So, really, that’s an application of analytics for either.
Bob Thompson
I remember the story about Capital One. When they were growing fast, they used analytics in conjunction with a lot of purchased data to be very targeted in how they acquired new customers.
Fred Landis
Right.
Bob Thompson
So you can use this for acquisition, if you start that, too, right?
Fred Landis
Yes, no doubt. And financial services is a great example of that. It’s an industry that has segmented its customers along the lines of those that are more profitable. I would bring in the term, “wallet share,” that is used in most of their lines of business, such as mortgage, savings, checking, even investments. Looking at a company like Bank of America, which has business in multiple units, those that are clients of their multiple lines of business and sufficient balances are those with greatest wallet share and are their most valuable customers. They are provided with the most face-to-face services as a result. But it’s defining those segments and defining the profitability of that highest segment that is the tricky part in taking an organization there.
Bob Thompson
Fred, you, I think, represent the analyst community. You have studied technology extensively, which is a little bit different from what William and Naras are doing in end-user consulting. Correct me if I’ve stated that incorrectly.
William McKnight
I do consulting to the software community, as well.
Bob Thompson
Right—to software vendors. Naras, you consult with end-user businesses, right?
Naras Eechambadi
That’s right, and also we do the analytics for some of our clients on an outsourced basis.
Bob Thompson
You worked at First Union prior to starting your firm, so you’ve got a lot of experience in actually doing this stuff. William, is your work with software vendors or with end users or some of both?
William McKnight
It’s largely end users—about 90 percent. But I’ll do white papers and research and assist with marketing campaigns and so on.
A hot market
Bob Thompson
Fred, since you do spend a lot of your time on the technology, I want to get into some of the market dynamics. Is it a fair statement to say that this business intelligence analytics area is a hot market?
Fred Landis
No question about it. If you just look at Siebel’s recent performance, they’ve attributed a lot of their new sales to analytics. Their analytics business is up quite a bit over the last period. The exact number escapes me, but it’s 40 percent, I believe. So there’s no question about it that it is hot. And if you look at the vendor landscape, you see them, as I view it, in three different angles, one of which is this business intelligence community that, of course, is using the OLAPs and their super users.
Bob Thompson
OLAP. Please define that.
Fred Landis
Of course. It’s your online analytic—
William McKnight
.
Processing
Fred Landis
Thank you.
Bob Thompson
Online analytic processing.
Fred Landis
Which means you can build data cubes that allow you multi-dimensional views of data. They’re very powerful and useful. The problem is, many BI competency centers are just getting started up with a so-called line of business expertise versus
needing that expert super-user—say a Cognos or a Business Objects—to operate an OLAP engine. But, they’re, nonetheless, making penetration with some pre-packaged offerings.
The other segment, of course, is the imbedded analytical marketplace. Siebel would be a good example of that. These are the CRM vendors that are adding analytics to their products, which create more finite metrics—or finite data sources restricted to those applications. But, nonetheless, there’s a real line of business focus and added value. Then, there are your others, which I would call the suite products, which are just those that, in essence, sit in between these products or these other engines.
Bob Thompson
SAS would fit in there?
Fred Landis
SAS would fit in there. You could argue Teradata would fit in there. You could argue some of the smaller vendors, like Quadstone—and perhaps even SPSS—would fit in there.
Fred Landis
They take some different shades but certainly add value in their own approach.
Bob Thompson
They specialize in this area, right? Do you have any statistics you can share with us really quickly, Fred? Is this market growing at 10 percent? At 20 percent? What’s happening?
Fred Landis
You know, I don’t have a firm grasp, but I would estimate that, depending on the flavor, it could be anywhere from 10 percent to 25 percent. With the suite area probably the fastest, in that it is the most emerging in the market, where the others are a bit more mature in their approach and require incumbency by those vendors to be effective.
Bob Thompson
We’re going to come back and talk a little bit about some of the dynamics in terms of the suites versus the specialists. William or Naras, can you add your perspective on the overall trend in the market?
William McKnight
I think it is a hot market, but we’ve been saying this for years and it hasn’t quite happened to the degree that, I think, we’ve been expecting. I really do think that now we’re seeing some investment coming back into business intelligence and CRM. I think this is all right in the sweet spot of the modern competitive advantage, which is information and customer-centricity.
Customer data comprises the most important data that a company has, and this is all centered right here on this most important data. So I think it’s a hot market. I think that it’s growing as much as anything is growing, and when I look at budgets for my clients across the board in IT, I see a high relative spend in these areas, compared to other areas. This has been true for some time, and it continues to be true and probably will continue to go that way.
Bob Thompson
Naras, you’re in that same market. You’re seeing a healthy trend for spending in this area, too?
Naras Eechambadi
Yes, except I’d add sort of a nuance to what William said, which is: We operate in a lot of consumer markets, where marketing has traditionally been very strong relative to sales. These are large consumer markets. I would say that in those markets, analytics is sort of an old story. It’s been done for a long time, and most of the leading practitioners, like the large banks and large telecom companies, took to this quite a while back. It’s been an established trend in those areas.
I think where you’re seeing a lot of the incremental growth these days is with organizations that are sales-driven suddenly starting to realize, “Boy, there’s something more here than just marketing providing some leads and sales support. There’s some real intelligence that can help us on our strategies.”
The reason Siebel, for instance, is doing extremely well in this area is Siebel tends to sell to those kind of organizations, and they are now waking up to the power of analytics. So, yes, it’s hot in some areas, but it’s always been hot in some others.
Bob Thompson
I’d like to talk a little bit about the industry dynamics. Not to pick on Siebel, but I’ve been hearing for the last couple of years that Siebel has been getting into the analytics game. They’ve certainly done a lot of marketing, and they’ve made acquisitions. There seems to be some question about whether these multi-function suite vendors, like Siebel, Oracle, or SAP, for example, are competitive enough to go against companies like SAS or Unica or other specialist companies. I’d really like to have a good debate about that. Is there a winner and a loser in this game? If not, why not? If so, why? Who would like to lead off this discussion?
Fred Landis
I’ll give it a shot here, Bob. I don’t think it’s a zero-sum game, winner or loser, that I can see, as yet. I say that because of the emergence in growth opportunities in the market. The good news is, the CRM vendors have a base of clients, all looking to extend and enhance the functionality of applications they’ve already purchased. That incumbency builds a lot of momentum for those vendors, which is why Siebel has been so successful at that. This enhancement—and the effectiveness issues over the last few years that end-users have been striving for since the IT spin—now is a natural fit for analytics.
But, that said, the disadvantages of those vendors are that they may have so-called “siloed” implementations. Maybe it’s just imbedded into their sales force automation system, or marketing automation system, without the connections and data sources to the other areas of the company—for instance, in the back office and invoicing, billing, order management and so forth. When you’re doing segmentation on clients and customers, it certainly makes a big difference to have that information. But you’ve got opportunities in the market from the suite vendors, who are really looking at a more holistic approach—the Teradatas and SASes of the world—who do nothing but specialize in analytical applications and so-called “actionable information, ” the term they coin.
From that standpoint, I think it’s going to be a horserace on: a) Can the CRM vendors maintain the credibility within their space? and b) How can they leverage partnerships with these other vendors, such as what Siebel has done with Teradata, to make it mutually beneficial?
Bob Thompson
Naras, what’s your take on that?
Niche-players and suites
Naras Eechambadi
First, let me share where I’m coming from. We tend to work much more intensely with clients who tend to use the niche-players, the Unicas, the SASes, SPSSes, the E.piphanys of the world. Even though many of our clients are users of Siebel or users of SAP or users of Oracle on the sales force side or on their other enterprise systems, the marketing departments we tend to work with tend to use the specialty players, largely because I think they find that there is a lot more power.
Now, it’s true that a lot of the suite players have come a long way in the last few years, and that might change in the future. It’s something that we’ve always talked about: Is that going to change? Are these niche guys going to go out of business or not do well? But we’re finding the niche players doing extremely well, as well. So, in a sense, it’s really a rising tide that seems to be lifting all kinds of boats: the small ones and the big ones.
Fred Landis
I agree.
Bob Thompson
William, you’ve worked with data warehousing vendors.
William McKnight
Right.
Bob Thompson
It seems to me like they were the leader of this parade not that long ago. Then, the BI vendors showed up and the analytics vendors, now the suite vendors. Everybody’s kind of piling into this market. What’s happening to the Teradatas of the world and those that were really at the start of this trend years ago?
William McKnight
It’s certainly a lot to focus on, and this gets back to my earlier comment about the difference between data warehousing and business intelligence. We’re finding that there really is a difference and that the business intelligence side of things has to be very business-focused, very industry-focused. It’s different from the technical act of compiling the data into a manageable environment.
I think that’s where you see the niche players and the non-data warehouse suite players emerging. I think what we’re looking at right now is a classic case of the leaders being slower and more conservative and opening up opportunities for niche players. But we do all know that over time, that gets narrowed down to the winners, so I do think that the Siebels, Oracles, SAPs, what they’re doing will have a long-term benefit for them, at the expense of some of the newer players.
But, as has been said, a rising tide is lifting all boats right now, and certainly, just as Naras was saying, companies that get involved with Naras’ company or my company tend to be a little bit more leading edge about these things. We also see a lot of the niche players, and I think their feature functionalities are things that will be adopted by the suite players over time.
Up-and-comers
Bob Thompson
I know you guys don’t endorse vendors, and if you do, you can let me know this now. But if you wouldn’t mind, could you give me your take on who you think are the hot up-and-coming upstarts in this area, whether it’s data warehousing or business intelligence or the suite vendors? Who do you think, in the last year or two, has come into the market, done some exciting things and really kind of separated themselves from the pack in their product and their marketing? Naras?
Naras Eechambadi
I’ll speak to the part of the market I know very well, which is relatively smaller players who are more specialized. We’ve seen Unica really pull ahead of the pack. They have a very interesting strategy, where they are combining the analytics, which they’ve traditionally had, with a very powerful campaign management application and a lot of software around process—managing the marketing process and marketing planning—and also the area that Fred talked about, which is on-time, real-time analytics that are operational in nature, where you can make real-time decisions. They’ve really combined a lot of those capabilities and built a very powerful suite, and they’ve really started to pull away from the competition over the last couple of years. We’ve seen that over and over again.
Bob Thompson
Unica, if I recall correctly, filed with the SEC to do an IPO this year.
Naras Eechambadi
That’s correct.
William McKnight
That’s correct.
Bob Thompson
William, who are your hot picks?
William McKnight
A couple I’ll put out there: Intelligent Results is a company that has a focus on text with Discover. They focus on text-based data and incorporating that data into your analytic systems, such as emails, call logs, web pages, text files, survey components and things like that. I think we’re seeing a reemergence of the importance of that kind of data, and they’re doing some leading edge things with that data.
Also I’ll mention Triversity, with their Allegiance product. It’s specifically for retail, but I think we’re going to see more and more products that operate in specific industries, in the way that Allegiance does, pushing out real-time promotions based upon customer existence in the database and all kinds of customer information that’s collected and sorted in real time to display select prices for select pieces of customer information at the point of interaction. I think that real time and text are a couple of trends worth noting.
Bob Thompson
Fred, would you like to get your oar in the water here?
Fred Landis
Sure, I would. I would agree, certainly partially, with Unica’s placement in the market right now. Although I see them with a better competency in these marketing processes that Naras mentioned versus the analytical side of the business. They’ve certainly done what they call “enterprise marketing management” quite well. But that said, I think E.piphany has certainly stood their ground as a CRM vendor and provider, in essence, staking their future on what has been a core competency in their past: marketing, and marketing automation, where they’ve developed their products, like Interaction Advisor, which assists with real-time analytical decisions for the contact center and sales force.
Bob Thompson
Hang on one second, Fred. With E.piphany, they tried to take a broader approach at the market. Or are you saying they’ve kind of pulled back and are being a little more focused these days?
Fred Landis
Well, while they’ve been a CRM suite provider in the past, their origination was as a marketing automation company. And they added a suite product. But their growth initiative and, some might say survival, have been in the marketing area, because that is their original core competency. That is the point I was making.
Bob Thompson
I understand. So you think E.piphany is still a strong contender in this space?
Fred Landis
I think they are, because I think they’ve shown a lot of vision with the knowledge of marketing automation and campaign management. These are still crucial functions and applications that analytics are going to be used for, so back to that retention and acquisition—the functions we’ve talked about before.
Bob Thompson
What about the old guard, then? We haven’t talked about SAS that much, and of course, they’ve been around for going on three decades. So, what’s their strategy to compete? They’ve got the suite vendors that are going after the big corporate accounts, which SAS also targets.
Fred Landis
Yeah.
Bob Thompson
They’ve got the specialist companies, like Unica and many others that are very focused and, generally, quite small, trying to nibble away at their business. How is SAS positioned to move out over the next year or two?
Fred Landis
I have yet to have more discussions with them, but I plan to, so I reserve some comment. But I really see them as this hybrid analytical suite and build tool, so they really make their hallmark with having users and organizations and very high adoption and high loyalty to their produce with their super users. Clearly, they can provide across-the-board marketing analytics, sales analytics, service analytics, cross-functional and so forth. But they have their own legacy here in marketing analytics, as well. I do see them certainly expanding their partnerships so that they’re branding out of just a statistical engine coming alive. That’s been something they’ve had. It’s been an advantage. But to grow with their business, they’ve got to adopt some other strategies.
Bob Thompson
Naras, anything you can add about SAS or any of the bigger players that are going to be competing with these upstarts?
Naras Eechambadi
I do want to come back to a comment that Fred made. I think E.piphany is making a run for it, and they’re certainly putting up a very good fight in the marketplace. It will be interesting to see if they are drawing into their core competence. Perhaps, that will position them better for the future.
On the SAS side, I’ve worked with SAS many, many years now. They have made several attempts over the years at reinventing themselves and growing out of their core base—which is a very strong base, by the way. I mean, they have some very dedicated followers in many of these companies, which is one reason for their success. However, most of their attempts at breaking out of their whole area have not really been successful in the past. I think time will tell whether they can succeed this time around.
William McKnight
I want to bring up a point with SAS. In the past, they really haven’t had to be as open, and ease of integration has not been an issue. But I think, as they grow their business, they’re going to have to become more open. They haven’t had to be, due to their brand in the past, which is going to be an issue.
Naras Eechambadi
I would agree with that. In fact, I think toward that direction, the latest rewrite of their software has been much more open. They are using much more open protocols and stuff. So they’re positioning themselves right. But it’s more than just technology. It’s also an attitude. It’s how you relate to partnerships and how your sales force works with other sales forces. There’s so much with working with the rest of the world.
William McKnight
Right.
Naras Eechambadi
It’ll be interesting to see if they can, culturally, adapt themselves.
Bob Thompson
We haven’t talked much about SAP, and I wonder if we could switch gears just slightly here. What do you think, William? Are you familiar with what SAP’s doing in the analytics area?
William McKnight
I’m mostly familiar with the BW product and what they’re trying to do in data warehousing.
Bob Thompson
Any comments on that?
William McKnight
I think they’re making strides, and they want to become a packaged data warehouse to companies that don’t even have SAP. They have one customer who’s doing that, so I find that very interesting. It’s probably the premiere packaged business intelligence data warehouse environment that’s out there. And it’s surely come a long way. Understand that SAP, while it may be a very important data source, is not the only data source that the company will ever need to get data from. It’s getting more open, and I think that’s going to serve them well. It’ll be interesting.
Bob Thompson
It seems to me that this is a very challenging area for business and IT executives to navigate, because it’s got these huge suite vendors, the specialty companies with the very deep expertise: the Teradatas of the world, for example, and the SASes. I wonder—this is a stretch here—if you guys could give a few words of advice, as we wrap up. Is there some sort of natural starting point you would advise your clients to go through to help them sort out whether they should be pointing toward a more multi-functional suite vendor, going to a big specialty company like a SAS or talking to a more specialized up-and-comer like Unica. Fred?
Fred Landis
Sure, I can answer that. I also wanted to point out that, regarding SAP, they’re looking at that as a growth area for them in ’05. They’re expanding their investments in marketing analytics, as well.
Bob Thompson
Everybody’s got this on the radar screen, don’t they?
Fred Landis
They certainly do, and as they’ve built their base, it’s very opportunistic for them, with the increase in market share. But, getting back to your last question with regard to advice, I think a lot of this depends on knowing yourself as an organization. Is there a BI competency center and a business intelligence adoption in your organization to one of the brands? Is there a loyal adoptive, many-seated implementation of Siebel or another CRM product? Or are you a company that really hasn’t had either in significance, that is, a type A organization looking for new analytical technology for competitive advantage?
By defining your organization’s adoption and looking at where you’ve started is a great place to start. If I had a legacy BI competency center with Cognos or Business Objects in my organization, I would leverage that expertise, because I had a lot of skin in the game and investment, already.
Bob Thompson
So, your advice is: Start with what you’ve got and see if you can build on that.
Fred Landis
Yes. Absolutely.
Bob Thompson
William, what’s your sage advice in this area. I apologize. I know this is a very deep subject, but where would you advise somebody to get started so that they head down the right path?
William McKnight
First of all, I want to caution people to not start with a vendor but with what the business goals are. Figure that out. Don’t expect that vendor product—the implementation of that product—is going to do that for you. So let’s get our business strategy in place and then go to market and see where in the marketplace a vendor can help.
What we’re seeing emerging very clearly in the business intelligence marketplace is a set of finite frameworks that comprise all of the components that one would need. As I said, there’s a finite set of these out there, and it behooves us to take a look at these frameworks, where you have a major vendor in the center of the universe of business intelligence—be it Cognos or Business Objects or Teradata or one of the other few that are actually growing across all product lines in this area. Take a look at what the frameworks offer. The soft skills—the soft measures—are very important these days in the state of commoditization that is going on in the marketplace.
Bob Thompson
Naras, I’ll let you get in the last word. What’s your advice?
Naras Eechambadi
I would certainly agree with William, that you should start with the business side and figure out what the business challenge is and what all the business opportunity is and work your way back from business. What do you need to know? What intelligence and information do you really need to have? What kind of knowledge would be useful? Then what are your information needs? And, finally, get to the technology. How can I get that information? What technology is best?
I agree with Fred. Technology should be the last question you ask. If you can use something that’s already there—whether it’s a user base in the user community within the company of people that can actually help you extract this information—if there’s a technology community that can help you build out the infrastructures that need to happen, that certainly makes it easier. But a lot of that in-between stuff—between the strategy and the information, the analytics—you can, at least in the beginning, outsource some of it and bring in a couple of people who can help you with some of the heavy-duty lifting. Then say, “OK, is this worth it? Now should I invest in my own people?”
