Copyright 2003-2004 by Atre Group, Inc. How to Evaluate BI Products that Will Help to get the Most out of CRM Shaku Atre Atre

Copyright 2003-2004 by Atre Group, Inc. www.atre.com

How to Evaluate BI Products that Will Help to get the Most out of

CRM Shaku Atre

Atre Group, Inc.Santa Cruz,[email protected]

Edward ChenKQEDSan Francisco,[email protected]


About Shaku Atre President of Atre Group, Inc.

Author of six books and hundreds of articles as columnist for Computerworld, DM Review and other publications

Co-Author of “Business Intelligence Roadmap-The Complete Project Lifecycle for Decision Support Applications” (2003, Addison-Wesley)

Former partner with PriceWaterhouse Coopers

Former faculty member at IBM’s prestigious Systems Research Institute

Keynote speaker and lecturer on business intelligence, data warehousing and databases throughout the world

Reach Shaku at [email protected]


About Edward Chen

Director, Information Technology – KQED

Over 10 years in Technology and Information Management

Articles on TechRepublic.com, a technology management peer site

Reach Edward at: [email protected]


How do we define BI?

BI is business success realized through rapid and easy

access to actionable information. The information

provides timely and accurate insight into business

conditions about customers, products, services,

finances, suppliers, partners and markets, collectively

known as BI.


BI decision support applications include:• Balanced scorecard

• Visualization

• Querying, reporting, charting (including just-in-time and agent-based alerts)

• Knowledge management

• Portals

• Text-, content- and voice mining

• Executive dashboards


Key Performance Indicators (KPIs)KPIs fundamentally indicate whether the enterprise is

meeting its stated objectives

A KPI has to be relevant to the performance of the organization as a whole

KPIs are interrelated – they don’t stand alone (e.g. debt to equity ratio, asset turnover, profit margin)

An Enterprise Performance Dashboard (superset of executive dashboards) is based on meaningful and well defined KPIs


The Balanced Scorecard Model

Obj

ect

ives

Obj

ect

ives

Mea

sure

sM

easu

res

Tar

gets

Tar

gets

Initi

ativ

es

Initi

ativ

es

FinancialFinancial

To succeed To succeed financially, how financially, how should we should we appear to our appear to our shareholders?shareholders?

Obj

ect

ives

Obj

ect

ives

Mea

sure

sM

easu

res

Tar

gets

Tar

gets

Initi

ativ

es

Initi

ativ

es

CustomerCustomer

To achieve To achieve our vision, our vision, how should we how should we appear to our appear to our customer?customer?

Obj

ect

ives

Obj

ect

ives

Mea

sure

sM

easu

res

Tar

gets

Tar

gets

Initi

ativ

es

Initi

ativ

esLearning and Learning and

GrowthGrowth

To achieve our vision, how will we sustain our ability to change and improve?

Obj

ect

ives

Obj

ect

ives

Mea

sure

sM

easu

res

Tar

gets

Tar

gets

Initi

ativ

es

Initi

ativ

esInternal Internal

Business Business ProcessProcess

To satisfy our shareholders and customers, what business processes must we excel at?

Vision and StrategyVision and Strategy

The Balanced Scorecard Model, Kaplan and Norton (From the book by Bernard Liautaud and Mark Hammond, McGraw-Hill Companies, Inc.

Copyright 1996 by Harvard Business School PR,

ISBN: 0875846513The Balanced

Scorecard: Translating Strategy Into Action, Robert S. Kaplan, David P. Norton, September 1996.


Balanced Scorecard

Tracking business progress through key

metrics by using

• Financial data

• Customer information

• Internal business processes

• Iterative growth to translate strategy into

action


Balanced Scorecard

Centrally organizing framework for important

managerial processes:

• Individual and team goal setting

• Compensation

• Resource allocation

• Budgeting & planning

• Strategic feedback & learning


BI = Greater Profitability

Streamline operations (business process re-engineering)

Shorten product development cycles (to drive products to the market faster)

Maximize value from existing product lines and anticipate new opportunities to get “out of the gate” faster

Create better, focused marketing, as well as improve relationships with customers, partners and suppliers alike


Integrated Customer Relationship Management

Sell Promote Service

Optimize the Customer Relationship

Au

tom

ate

d M

ark

eti

ng

Sale

s F

orc

e A

uto

mati

on

Ord

er

Man

ag

em

en

t

Cu

sto

mer

Su

pp

ort

Kn

ow

led

ge M

an

ag

em

en

t


Objective: Enhance and optimize the value of

each customer relationship. In

other words increase:

• Market share

• Customer satisfaction and

loyalty

• Profitability

Objective of Integrated CRM


Result of Integrated CRM

CRM means economics, profits and business effectiveness

One-on-One Marketing: Which products will allow to do it?

Which of the customers are profitable and what makes them profitable?

Which customers make you lose money? Can you avoid it?

How can the data be mined for finding the profiles of the profitable customers and of the losing customers?


An Example of an Integrated Solution for CRM:Top Customer List: View a list of the top customers by grouping

the customers and sorting the year-to-date (YTD) sales field

Customer Accounts Receivable Aging List: View accounts that are due and the associated collection aging

Credit Hold List: View customers on credit hold

Unprocessed Orders List: Orders correlate with dollars. List of unprocessed orders can be provided with a click of a button

Buying Trends: Define criteria and manipulate the information in a spreadsheet

Collection Letters: Send friendly reminders to the delinquent customers about due accounts and record in CRM history


Why is BI Product Evaluation for CRM Different?The data needs to become available quickly

enough for mobile and customer facing staff

Ensuring a single view of the customer to avoid conflicts

The focus is on quality and quantity of the customer information

Many of the frequently asked questions about the customer can’t be answered by non-CRM focused BI products

Personalization and one-on-one marketing is very cumbersome and needs to be one of the BI drivers


Value of BI to CRM

BI Provides:

Unparallel visibility into order and invoice processes

Trends on pricing, product, discounting, inventory levels, logistics and shipment delivery

Insight into customer past and present characteristics including demographics and buying patterns

Ability to suggestive-sell, up-sell and cross-sell

Ability to better manage the customer by having an up-to-date integrated view of the customer

Ability to generate reports on an ad-hoc basis for customer information mining


BI Myths• Since BI projects are usually initiated and sponsored by a single

department in an enterprise, BI products should focus on meeting requirements of just that department.

• Comprehensive reporting requirements, performance metrics and Return On Investment (ROI) can be fully defined by upfront detailed needs analysis prior to deployment of a BI solution.

• There is only going to be a single enterprise wide BI product in my organization.

• Only users internal to an organization will use BI querying and reporting.

• BI is just another name for reporting and historical trends analysis.


Accounting 17%

Marketing 15%

Sales 13%

Executives 14%

Operations 10%

Manufacturing 8%

HR 7%

Finance 13%

R&D 1%Others 2%

BI Project Sponsors By Departments


BI Product Evaluation

Steps for identifying the organization’s needs for BI applications and products to serve CRM include:

• Needs identification

• Elimination

• Vendor evaluation

• Product evaluation

• Recommendation



BI for CRM Product Evaluation Components

Vendor Evaluation

Querying, reporting and analysis

Data warehousesETL

Installation, administration and

security

Human factors Meta data management

Product Evaluation


Phase 2: Elimination

Phase 3: Vendor Evaluation

Current & Future Needs Determination of the first application to be

implemented Prioritization of needs

Prepare product selection criteria Eliminate products that will not be considered

Contact the vendors and request for initial product information

Evaluate vendor responses

Prepare and distribute Request for Proposal (RFP)

Prepare product selection criteria Evaluate vendor responses to RFP Vendor Presentations and Proof of

Concept

Phase 4: Product Evaluation

Eliminate products that will not be recommended Prepare a recommendation document

Phase 1: Needs Identification

Phase 5: Recommendation


RequirementImportance to the

OrganizationHow well is this

requirement fulfilled

Weighted Value

Ability for users to self-sufficiently define their own queries

Ability for users to perform advanced data analysis

Ability for the product to combine data from disparate data sources

Ability to create a multidimensional perspective of data.

Ability to perform on-report analysis capabilities so the users can quickly drill into or slice and dice data to gain new business perspectives on the information.

Ability for mobile users to access reports and perform analysis while being disconnected

Total Weighted Value

Request for Proposal (RFP)


1. Hardware compatibility2. Operating system

compatibility

3. Delivery mechanism support

4. Native interface support

5. Built-in features

6. Graphical user interface

7. Meta data management

The Initial Elimination Process


Decide on the functions to be evaluated during the POC and create a model for objectively evaluating the results of the POC. The model should includefunctional criteria and related weights.

Select the environment for the POC.

Define POC test cases.

Determine an aggressive time frame for running the POC.

Schedule vendors for the POC and ensure the readiness of the Prerequisites.

Evaluate the results of each POC before starting the next One.

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

6-Steps of BI Proof of Concept (POC)


Questions Before Embarking on BI

Do we have a problem with Customer service or Customer loyalty?

Do we have an unacceptable attrition rate of “profit generating” customers?

Do we understand how to implement BI systems in cross-organizational manner?

Do we have the mandatory BI skill sets including: OLAP and cube architects

BI business analysts Data warehouse architects Key performance indicators (KPI) and balanced scorecard

implementation experience & Personalization Experts


Case Study: KQED

Public Broadcasting Station in SF Bay Area for

50 years

CRM – core business function

Individuals, Corporations, Foundations


Case Study: KQEDBI POC based on transactional CRM system

Goal:

• Answer critical questions regarding revenue base to guide future efforts

• Gain and retain knowledge of deploying BI/DW systems

• Form the foundation and strategy for future BI initiatives

POC: Answer member retention questions with BI platform


Case Study: KQED

All-encompassing ‘Step 7’: Educate yourself &

your team

Atre Group provided the guidance and tools

Learning to come up with the right questions

• KPI, Balanced Scorecard.

• What to look for in a BI vendor?

• What does the organization need/want to

succeed?

Copyright 2003-2004 by Atre Group, Inc. www.atre.comCross-Tab Label0/0

40%

30% 30%

1 2 3

Do you have a problem with any of the following:

1. Customer service2. Customer loyalty3. Unacceptable attrition

of “profit generating” customers?


Do you understand how to implement BI systems in cross-organizational manner by providing:

Search capabilitiesCollaborationPortalsContent managementKnowledge management

Copyright 2003-2004 by Atre Group, Inc. www.atre.comCross-Tab Label0/0

20% 20% 20% 20% 20%

1 2 3 4 5

Which mandatory BI skill set do you have at your organization?

1. OLAP and cube architects

2. BI business analysts 3. Data warehouse

architects4. Key performance

indicators (KPI) and balanced scorecard implementers

5. Personalization experts


Questions?

[email protected]

Documents

Copyright 2003-2004 by Atre Group, Inc. How to Evaluate BI Products that Will Help to get the Most out of CRM Shaku Atre Atre