There is a treasure chest sitting within most companies, waiting to be opened. And many don't even know it. If they do, they don't know how to get to the riches inside. The treasure is data. Most companies simply aren't making the most of what they have.
Companies collect a wealth of customer-related information that they rarely use. Using this information effectively, however, would allow them to clearly understand what is happening in their business, what will happen next, and how they can influence their future performance.
We believe that companies can approach their data initiatives in smarter and more strategic ways. Peppers & Rogers Group has introduced a methodology to do so called info|SMART. An info|SMART company is one that:
- Establishes a deeper understanding of business information and trends to enable timely, relevant, and fact-based decisions;
- Predicts trends and customer behaviors to stay ahead of the competition;
- Takes the necessary actions based on this insight.
Such actions could be strategic, impacting pricing, product bundling, or segment strategies, or tactical, such as rolling out retention campaigns based on the results of churn prediction.
Info|SMART is a business concept that enables companies to compete and generate revenue in this rapidly changing business environment based on the information already in their possession. It is the end-to-end enablement and management of critical data and analytics capabilities, bringing about direct impact on how businesses get, keep, and grow their customers.
Info|SMART is based on four key pillars:
Making information available: This focuses on enterprise information management. The key enabling tools are data warehousing and data marts. These have to be supported by a clear data strategy and a strong data quality management approach.
Making information accessible: This covers the area of enterprise reporting. The key enablers are dashboards and business intelligence tools. These have to be driven by well-defined business requirements detailing metrics the organization will track.
Making information effective: This is all about enterprise analytics. Data mining tools enable this function, providing several models for segmenting customers based on value and needs, as well as by predicting customer behaviors and propensity toward certain actions.
Making information operational: This relates to decision and campaign management. Different CRM tools enable this function, which is responsible for ensuring that all of the gained insight is put into action.
Making information available
There's no denying that the thirst for data has grown. Companies track all kinds of data, from customer to billing, operational, channel, and product, just to name a few. Over the past decade companies have invested heavily in building enterprisewide data warehouses to store that data. Very often, however, those efforts have been led by IT with inadequate business input. The structure of the enterprise data warehouse is usually so complex that it leaves most potential business users helpless.
Furthermore, the consolidation of data from the different source systems is often problematic, leaving the enterprise data warehouse with serious quality problems. The resulting systems are frequently cumbersome and not utilized to their fullest.
Instead, companies need to develop a data strategy that defines the critical data elements to be collected and how that data should be maintained. Defining key performance indicators (KPIs) to compare data between source systems and the data warehouse comes next (for example, comparing the number of unique active customers in the source systems and the data warehouse). Setting strict service levels for each of the defined KPIs and monitoring these service levels on an ongoing basis allow organizations to identify and address data quality issues on a timely basis.
With data quality management in place, companies can create individual data marts for sales, customer profiles, revenue, churn, customer service, or other categories. The data marts contain aggregated or derived data in formats that are simpler to follow and used by different business units. These data models should cover the majority of data, analysis, and reporting needs within several functions, including sales, marketing, service, and operations.
Making information accessible
With information now easily available, relevant stakeholders across the company must actually use it. However, companies deploying business intelligence (BI) tools face multiple pitfalls:
1. Level of automation: When deploying a BI system IT departments often provide the software and data access to business users without ensuring the availability of a set of automated predefined reports. Business users, likely daunted by the new environment and the task of setting up new reports, may regard the overall BI implementation as a failure. Levels of utilization remain low.
2. Level of complexity: Even when automated reports are made available, often the level of complexity and detail is overwhelming for the senior management team.
3. Performance: The power users who start using the BI tools frequently face performance issues, with reports taking from several minutes to hours to obtain.
To address these issues, Peppers & Rogers Group recommends using predefined standard dashboard and report templates, customized based on role and industry. These templates can adapt the level of detail to the business user, while their industry specialization allows for faster implementation and deployment. A bank or telco's CEO dashboard, for instance, would display the most critical performance and results indicators, also allowing the executive to drill down for any required detail (e.g., number of accounts per customer for the bank CEO and churn details for the telco CEO).
Making information effective
Dashboards provide visibility, so executives can make decisions to improve their business. Which decisions to make, however, can be another challenge when working with data. This is why analytics plays such an important role in any info|SMART company.
By looking at a customer's lifecycle, we see multiple growth applications for business analytics. In each stage of the customer lifecycle—awareness, acquisition, growth, retention, and win-back—there are numerous analytical models that can be used to understand how to modify customer behavior and generate revenue.
Models include those that segment customers based on value, needs, and behavior, then apply social network analysis, competitive analysis, and other data to help create onboarding strategies, trigger-based marketing models, and channel optimization, to name a few.
In the telecom space, for example, models such as churn prediction offer a prediction window of about two months, ample time for operators to take the necessary actions to retain their highest-value customers. By developing targeted retention offers to high churn propensity customers, some info|SMART companies managed to reduce their churn by 30 to 40 percent within a period of six to 12 months.
Making information operational
The ultimate goal of an info|SMART company is to be able to turn information into profitable actions. These actions can be strategic or tactical.
From a strategic actions perspective, info|SMART enables timely, fact-based decision making for the senior management team. The insights from the various dashboards and models are presented to senior executives periodically in war room settings where the latest trends and leading indicators are discussed and strategic decisions are made. Info|SMART war rooms can unearth not only the tactical fluctuations a company experiences, but also highlight the critical underlying changes that are gradually reshaping its business.
Breaking down data barriers
The ownership of information within a company typically is disjointed. Several components, such as data marts and business intelligence, are traditionally seen as strictly IT's responsibility and kept at arm's length by business units. Data issues that are business driven, such as modeling and campaigns, typically don't have adequate IT support. Info|SMART companies benefit from their wealth of information by taking a holistic view of the information value chain. An info|SMART approach establishes a clear balance between business units and IT, ensuring, on one hand, that business strategies are adequately translated to business requirements that guide IT strategy and actions, and on the other hand, that IT responds with value and enables those business strategies.
With margins shrinking, customer expectations growing, and competition heating up in virtually all sectors, what better way to compete than to make the most of the information already at hand? What an organization knows about its business and its customers is something that can't be replicated by competitors.
Conclusion
Making sure company information is available, accessible, effective, and operational allows companies to take their data strategy to a new level. By becoming info|SMART, businesses will be able to meet new challenges by making informed decisions based on valuable insight that no other company has. Today, it's not enough to be a smart company. To succeed, a company must be info|SMART.
