All Things Data

3 questions you should ask yourself when considering Customer Data Integration/Master Data Management

Master Data Management is one of the fastest growing information technology applications and therefore you might be asking yourself if this is something that you should be looking at for your organization.  Master Data Management can involve the integration of many data types.  However, for the purposes of this discussion, I am going to focus on a certain type of MDM, Customer Data Integration (“CDI”).

Here are 3 questions that you should ask yourself to see if you may benefit from CDI/MDM:

Is it a struggle for your organization to accurately and completely count the right number of prospects and customers?

Executives need to understand your organization’s complete and accurate number of customers and prospects.  Many times executives need to understand this information with some type of parameters, such as how many customers there are by region, product line, or some other criteria.  Sometimes even providing a list of who are your best customers, top 20 customers, etc. can be a challenge.  This is due to the various representations of the company name, multiple location and contact names for the same or related organization, data for the same or related organization being entered in multiple data sources without an indicator linking the different data sources, and other factors.

However, this information can help determine:

• How should costs and investments such as sales reps, services locations, distribution centers, marketing campaigns, and other resources are allocated.

• Who are your best customers and therefore should require a lot of attention and resource from your organization in order to preserve your key relationships in these uncertain economic times.

Is there information in multiple data sources that can help reps cross-sell, up-sell, and overall better manage accounts?

Sales reps need to be armed with information in order to reach their sales goals.  A sales rep needs to determine which customers they should target, when they should target them, and what should they be promoting.  Typically, the answers to these questions are found in multiple data sources.  Further, if there are multiple representations, locations, and contacts for the same or related organization, without a CDI/MDM integration, the rep maybe looking at incomplete data if the rep is just looking at a single entry in a database system. 

Here are some examples of items that a rep could see at their finger tips with a CDI/MDM solution:

• An integrated view from one or more financial systems can provide how much revenue, what products and services the customer has purchased, and when the contract is up for renewal.

• An integrated view from the customer service database can provide the client’s support issues.

• An integrated from other sources can provide other valuable information such as how many people at the client are using your service and where in the process is an item that is being shipped.

Are data quality issues increasing costs and impacting sales?

Just about every organization has data quality issues.  These issues could be duplicate records, incomplete or inaccurate data, data elements in inappropriate data fields, and a lack of understanding of how separate data records are associated.  Data quality issues can be different for each organization. 

A big data quality issue today is the need to centrally manage and market to all the relationships that an organization has developed with a client.  These relationships could be key decision makers or influencers or they could be potential key decision makers and influencers should the current key decision makers and influencers leave your client.  Many times, these contacts are not contained in the company’s centralized CRM or other sales and marketing database.  They may be in communication systems like Outlook or Lotus Notes, customer service systems, financial systems, user systems, or other data sources.  Further, if your representatives only have these contacts in their handheld devices, once your rep leaves, the relationship may also leave.  Additionally, you need to build these relationships over time.  Otherwise, if you wait to make outreach to current or potential decision makers and influencers, it may be too late to build a relationship once the key decision maker has left.

A CDI/MDM solution can help you identify and resolve the data quality issues that are increasing your costs and decreasing your sales and marketing effectiveness.

Utilizing Data for More Effective and Efficient Marketing

Pundits all over the place are stating that marketers need to do more with less.  Most marketing budgets have been reduced including the expenditures for external marketing lists.  Consequently, it’s important to maximize the opportunity with your existing customers and other contacts that you already have a relationship before investing in developing new, cold relationships.

Therefore, what are some practical solutions for a marketer to sustain and grow their organization in this environment?

First, look to the contacts that you already have an established relationship.  This could be current customers, past customers, or current/past prospects.  As turnover of contacts is high, especially with all the layoffs, you should ask yourself, besides the centralized marketing database; where else within the organization can I find valuable contacts?  These additional contacts could be in communication systems, like Outlook and Lotus Notes, users and support databases, financial systems, and other systems.

Next, look to your new leads.  These leads could be coming from your website, tradeshows, call center, sales rep, direct mail responses, and other sources.

Finally, if there are external lists that have a proven successful track record with your organization, then certainly they should be included in your budget and utilized.

Now that you have identified all the potential avenues of contacts, you can match and link all of the contacts that are part of the same or related organization in order to develop a single customer view.  With the data correlated by common indicators, you can query across data sources in order to perform analysis and generate lists for campaigns.  Representatives can see all of the contacts and their locations that are part of the same or related organization in a single view in order to help up-sell and cross-sell.   Leads, past prospects, and past customers can be matched up against current customers in order to help find referral opportunities and increase credibility with a new lead or potential revived opportunity.  

With data integration and correlation, you can get more out of your existing data sources and your already proven external sources without having to make the investment in speculative and unproven external resources.

Benefits of External Data

As data integration and data management specialists, we run into various different external data sources that are being used as part of our clients’ single customer view in customer data integration or master data management implementations.  Further, we also occasionally get asked by our clients if we can recommend any external data resources for their organizations. 

There are all kinds of data resource providers.  Sources can range for general business to very specific industry focused.  The range of data can also vary greatly from basic information to very detailed. 

The benefits of external data can also be varied.  Here are some examples:

• Identify specific locations and other information for target prospect marketing

• Enhance information for up-selling and cross-selling existing customers

• Provide guidance on market share and market potential

• Improve data quality

• Assist with resource planning

• Other uses

With this in mind, we plan on occasionally providing some information on specific data sources.  We hope that you’ll find this beneficial.

Private Equity, Operational Improvements, and Master Data Management

I recently read a report, Get Ready for the Private-Equity Shakeout, prepared by The Boston Consulting Group and the IESE Business School University of Navarra, a top business school in Europe.  According to the report, private equity firms should focus their portfolio companies on operational improvements in order to survive.  Operation value creation holds the key to success and is the most critical differentiator in today’s recession.

While I have discussed many of the topics below separately, I thought it would be a good idea to present these topics together and discuss how Customer Data Integration/Master Data Management (CDI/MDM) can assist with operational improvements for the portfolio companies of private equities firms.  Of course, these points are equally relevant to all organizations regardless of whether they are independent, public, owned by private investors, non-profit, or other institutions.

Rolling-Up Companies

Whether it’s an opportunity or a merger of necessity, many organizations are combining to reduce expenses.  The first thing an organization needs to understand is the proper number of customers and prospects and current and potential revenue by markets or territories in order to determine how many sales reps, service personnel, service locations, and other expenses that can be consolidated to manage profitability.  CDI/MDM software can enable you to determine the overlap and uniqueness in the combined organizations and develop the proper counts for the analysis.

Additionally, CDI/MDM software can be used to organize the accounts, contacts, and other information to help build the combined databases after the roll-up so that the new company can effectively market, sell, and service the combined organizations after the merger.

Also, CDI/MDM software can help the combined organization succeed in these difficult times by assisting with the daily operational improvements described below.

Daily Operational Improvements

Communications

By properly identifying/counting contacts, you can have the appropriate number of communications to your contacts by email, direct mail piece, and by phone.  This ensures that your sales and marketing efforts are complete, do not waste expenses with duplicate communications, and do not annoy your customers with extra and unnecessary communications.

Cross-Sell/Up-Sell

By developing a single customer view across multiple databases, sales and marketing programs can be developed to identify organizations that have Product/Service A, but not Product/Service B, locations that have Product/Service A and other locations within the organization that do not have Product/Service A, and referral contacts within the same organization that can help open doors to other locations, divisions, departments, subsidiaries, and other parts of an organization.

Internal Coordination

A single customer view across multiple data sources can help the different parts of the organization work as a team in a more efficient and effective manner.

At their fingertips, authorized information is available to representatives.  Here are few examples:

• Sales reps can see financial information such as products/services sold, revenue, and contract expirations prior to making the next sales contact
• Customer service reps can see Project/Opportunities in the CRM system for the account in order to make sure that the customer is receiving the proper care
• Accounting can see customer service tickets prior to sending out past due notices

Analysis

Similar to the discussion as described in rolling up companies, understanding the proper relationships and accounts within your multiple data sources, even if a merger is not involved, is the key in determining how to right size your business in this economic environment.

Customer Building/Preservation

It’s important to build relationships with not only with your key contacts, but also with your customer’s additional contacts in order to retain customers.  Therefore, if your key contact leaves, you will already have a relationship with either the replacement key contact or at least the key influencers who can point you to the replacement key contact and be your advocate.  Otherwise, you risk being replaced when a new decision maker is in place.  In these challenging economic times, an organization can not afford to lose its existing customers.  A CDI/MDM system can pull together all of the contacts within an organization even if they are represented in different ways and even if they are contained within multiple data sources.

If a representative leaves, it’s important that all of the client contacts are centrally located.  However, if the rep keeps all of their contacts in their handheld device, then when the representative leaves, the relationships may leave as well.  Additionally, a rep may not be focused on cultivating the relationships with secondary contacts and therefore it’s important that these contacts be maintained and organized centrally.  A CDI/MDM system can be used to match up the handheld device with the central database in order to facilitate the transferring of the data from the handheld into the central database.

Master Data Management and Customer Retention

In these economic times, organizations are focused intensely on customer retention and preservation.  A key part of preservation is an organization’s ability to gain repeat orders or contract renewals with their existing customers.

As people and not institutions are the one who make buying decisions, it is mandatory for organizations to communicate with all of the contacts at their customer locations who are involved in buying decisions.  However, every day on the news you hear more and more about company layoffs.  Further, the economic situation is predicted to get worse before it gets better and therefore some key contacts may no longer be at the company.  Consequently, it is critical for an organization to have a data integration/data management strategy to make sure that you are able to communicate with all influential contacts at your customers.

Master Data Management or Customer Data Integration software can help you correlate all of the contacts that you have with an organization.  These contacts could be spread across multiple data sources and the same or related contact and entity names can be presented in a variety of different ways.  If your key contact at a company leaves, it’s imperative that you have backup contacts at the organization so that you can continue the relationship.  Further, it’s important that you do not wait to communicate with the influencers at an organization until your key contact leaves because at that point it may be too late to build the relationship.  Additionally, an organization cannot rely on its sales reps to be the sole builder of the relationships with the additional contacts.  The sale rep may not be focused on building the relationships with all of the influencers.  Further, if the sales rep leaves your organization and the customer contacts are not correlated in the database, then the client contacts and relationship may be lost forever.  In these uncertain economic times, the risk of the loss of an existing client relationship is not one that an organization can afford to take.

Master Data Management and the Top 10 Business Priorities in 2009 (Part 2)

Today, I will finish commenting on the remaining Top 10 Business Priorities in 2009 from the Gartner EXP Worldwide Survey and how they relate to CDI/MDM.  For the introduction and discussion of the some of the Priorities that I had commented on Monday, please see Part 1.

Priority #5 Increasing the use of information/analytics

One of the dirty little secrets of business intelligence tools is that you cannot use them across multiple data silos unless the data is properly correlated.  Even with single data sources, counts of organizations and contacts are not going to be accurate if the entities and contacts have multiple contacts, multiple locations, lack of data uniformity for organization and contact names, and data entry errors for the same entity or contact in your data files.  The matching algorithms from a CDI/MDM solution match and link the same and related entities and contacts and correlate the data by hierarchies based on the solution’s numbering schema.  Without a correlating numbering schema, the business intelligence tool cannot properly report counts and provide business intelligence based on information using a combination of separate data silos.

Priority #6 Creating new products or services (innovation)

There are many ways that an organization can go when it comes to creating new products and services.  Typically, an organization wants to leverage its existing customer base, service capabilities, or something else related to the organization when developing a new product or service.  Analyzing an organization’s data is the key to understanding where the opportunities for leverage exist.  The CDI/MDM solution’s ability to correlate data so that report counts are accurate and information from separate data systems can be combined for reports are critical in performing the analysis that will help determine the new product or service and how it is marketed, sold, and delivered.

Priority #7 Targeting customers and markets more effectively

A CDI/MDM solution can help with targeting customers and markets more effectively in many different ways.  Here are some examples:

1. By properly counting the number of contacts for an account or prospect that meet the criteria for follow-up, unnecessary expenses of sales and marketing follow-up with duplicates or other contacts who do not meet the criteria can be eliminated. 
2. By properly counting the number of customers, prospects and linking information located in separate data sources (firmographics, products purchased, revenue earned, contract renewal dates, outstanding service issues, etc.), decisions on target marketing can be made more effectively.

Priority #8 Managing change initiatives

Similar to my commentary on Priority #1 Business Process Improvement, CDI/MDM software’s ability to properly count and to utilize information from multiple data sources can play an important role in measuring and managing the change initiatives that have been targeted for improvement.

Priority #9 Expanding current customer relationships

A Single Customer View across separate data sources (sales, financial, customer service, external data, etc.) can help a sales rep see the opportunities for up-selling.  Further, if the sales rep can see all the organizations and contacts that are related to a customer as part of the Single View of the Customer, the rep now has the opportunity to cross-sell to those related entities and contacts.  Similarly, marketing can use the Single Customer View to develop up-sell and cross-sell campaigns. 

Other departments, such as customer service and accounting, can also use the Single View of the Customer to help build relationships with current customers.  For example, customer service reps that see in another data source that has been linked that a proposal is being considered by a customer, can take even greater care than usual with that customer.  Accounting, if they spot an issue with customer service, may want to inquire first before sending out a payment past due notice.
 
Priority #10 Expanding into new markets and geographies

Analysis of internal data assets along with external data is critical in determining where to make investments in new markets and geographies.  Proper counts of customers, prospects, and suspects combined with information such as revenues, SIC codes, and other information that is found in separate data sources provides the insight as to what markets and geographies have potential for successful expansion.  A CDI/MDM system makes the counting and querying across systems possible.

Top Technology Priority in 2009

One final point, the Gartner EXP Worldwide Survey also stated that Business Intelligence is the Top Technology Priority in 2009.  As mentioned above under Business Priority #5, to increase the use of information/analytics across separate data silos data needs to be correlated by a numbering schema.  CDI/MDM applications make the data correlation happen so that you can get the most out of your Business Intelligence applications.
 

Master Data Management and the Top 10 Business Priorities in 2009 (Part 1)

I was recently referred to the Gartner EXP Worldwide Survey of more than 1500 CIO’s by a newsletter from DMReview.

According to the survey, IT spending in 2009 is expected to be flat as companies are investing in some areas and pulling back in others.  Further, according to the survey, the Top 10 Business Priorities in 2009 are:

1. Business process improvement
2. Reducing enterprise costs
3. Improving enterprise workforce effectiveness
4. Attracting and retaining new customers
5. Increasing the use of information/analytics
6. Creating new products or services (innovation)
7. Targeting customers and markets more effectively
8. Managing change initiatives
9. Expanding current customer relationships
10. Expanding into new markets and geographies

The overall theme of the survey is that CIO technology priorities will concentrate on gaining more value out of existing assets.

As the purpose of Master Data Management and Customer Data Integration is to help organizations realize more value out of its existing data assets, I thought it would be a good idea to discuss how CDI/MDM fits in with The Top 10 Business Priorities in 2009.

Today, I will focus on a couple of the Top Business Priorities for 2009 and how they relate to CDI/MDM and tomorrow I will finish commenting on the remaining Priorities.

Priority #1 Business process improvement

The other Priorities in the Gartner Survey are specific areas of Business Process Improvements.  My comments on these specific areas address how CDI/MDM software’s ability to properly count and to utilize information from multiple data sources can play an important role in determining what business processes to improve and how to go about doing so. 

Priority #2 Reducing enterprise costs

I recently posted a blog entry, Master Data Management and Rightsizing the Business, on this very subject.  In summary, matching and linking using a CDI/MDM solution’s numbering schema is the key to generating proper counts, such as number of customers and prospect, and querying information from separate data sources.  This information can help determine the maximum expense consolidation to manage profitability. (How many sales reps, service personnel, service locations, etc. do I need?)

Priority #3:  Improving enterprise workforce effectiveness

In a previous post, I had written, Increase Effectiveness with a Common ID.  In summary, CDI/MDM systems enable reports using information from separate data sources that are more accurate with proper counting.  This enables better planning and decision making.

Priority #4:  Attracting and retaining new customers

CDI/MDM can help attract and retain new customer in several ways.  Here are just a couple of examples:

1. If the prospect is somehow related (subsidiary, division, other location, etc.) to an existing customer, the system can link the prospect with the current customer enabling sales and marketing to use the existing relationship to help with the new sale. 

2. If the prospect has had contact with customer service, the solution’s Single Customer View will enable the sales and marketing team to see the information that is correlated with the prospect and use it in order to help close the sale. 

3. Analysis across multiple data sources can help understand your customer profiles and trends to develop programs and campaigns to obtain and retain customers.

Master Data Management and Rightsizing the Business

In these difficult economic times, it’s important to cut expenses where ever possible.  But how do you know what and how much to cut?

The answers are in your data.

Your data can tell you many things such as:

1. How many customers and prospects that you have?
2. How much revenue by customer, sales territory, and market segment?
3. Where your customers and prospects are located?
4. How effective are certain marketing campaigns?

The answers to these questions and many others are the keys to making decisions regarding the allocation of resources.  Here are some examples:

• Knowing the proper number of customers and prospects and current and potential revenue by markets or territories lets you know how many sales reps, service personnel, service locations, and other expenses that can be consolidated to manage profitability.

• Knowing that someone you sent a direct mail piece has responded either by mail, by phone, through your website, or in-person is critical in understanding whether the campaign should be continued and how much budget should be allocated to future campaigns.

However, there are many challenges to utilizing your data to get the answers to these types of questions.  Here are some of the challenges:

1. Multiple records exist for the same or related customer or prospect entity or contact due to multiple contacts, multiple locations, lack of data uniformity for organization and contact names, and data entry errors for the same entity or contact in your data files.  This makes it difficult to properly report counts and eliminate duplications.  Over counting may result in a missed opportunity to reduce expenses.

2. Information is contained in separate data files such as the initial mailing campaign file, and the related responses by the mail, the web, by phone, and in-person.  The respondents may use different representations of their contact and organization names for the different response vehicles.  This makes it a difficult task to track the initial mailing with the actual results.

Customer Data Integration or Master Data Management software can help properly count the multiple representations of the same or related entity or contacts and correlate records that are contained in separate data silos through matching algorithms.  With the matching and linking via the software’s numbering schema, proper counts can be generated and information from separate data sources can be queried.  This information can help determine the maximum expense consolidation to manage profitability.

Master Data Management and Merger of Necessity

I recently came across an article by PricewaterhouseCoopers stating that M&A activity in 2009 would be fueled by Merger of Necessity.  According to the article, “Troubled companies will look to align with larger, stronger players in order to survive, creating the perfect storm for mergers of necessity,” stated Robert Filek, a partner in PricewaterhouseCoopers’ Transaction Services group.  Further, Greg Peterson, a partner in PricewaterhouseCoopers’ Transaction Services group, stated, “Historically, it has been during a downturn when strategic buyers and private equity firms have their best buying opportunities, yielding the best return.”

When an organization acquires another organization as part of a “Merger of Necessity” strategy, understanding the overlap and uniqueness of the customer and prospect bases of the merging organizations is pivotal to developing the up-sell, cross-sell, and cost reduction strategies that are the drivers of the merge.

Utilizing the matching processes and number schema from a Master Data Management solution, an acquiring company can achieve the expected return on investment in a timely fashion by: 

Securing Market Share
Integrating the acquired organizations locations and contacts into existing database systems or brand new systems in a quick, organized, and complete fashion to ensure that the acquired customers are properly serviced and marketed to prevent loss of customers after the merger

Decreasing Costs
Properly allocating the appropriate number of resources based on the proper counting of customers and prospects of the two merging organizations

Increasing Sales
Developing a single customer view so that representatives can see information from the combined organizations utilizing information across multiple data silos to help up-sell and cross-sell

Executing Marketing
Understanding the overlap and uniqueness of the customer bases of the merging organization to develop target marketing campaigns based on the opportunities created by the merger

Data Quality
Identifying data quality issues such as duplicate records, building more complete and accurate records, develop master records for reporting, and other data quality issues

Master Data Management Discovery Summary

At this point, we have typically completed the Discovery Phase.  Before moving on to the Design Phase, we complete the Discovery Document and send it to our client for review.  The Discovery Document provides the background detail that is necessary so that Design & Prototyping of the master data management solution can take place.  In addition to being a valuable project management tool for our team, it also helps keep the client informed of the project details.  Further, the Discovery Document helps make sure that the client and our team are on the same page.

The last part of the Discovery Document is the Summary.  The Summary provides an overview of the master data management project goals, the tasks performed during the Discovery, and the project deliverables.

It should be pointed out that even during the Discovery Phase that we perform some of the initial Design work.  Some initial prototyping is necessary even before all the facts are discovered, as taking a look at the preliminary Design helps uncover the details and determinations that need to be made in order to develop the Design of the eventual “go live” system. 

Further, Discovery does not stop even when the Discovery Phase comes to completion. Discovery is an on-going process and certain elements shall also be discovered in the other phases.  However, based on the Discovery Document’s completion, we are now at the point where we can begin to configure and develop the client’s prototype master data management system.