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Sharpen the SOA: How Campaign Management Can Benefit from a Service-Oriented Architecture

  Article published in DM Review Magazine
November 2005 Issue
  By Marcus Dill

The current holy grail of IT is a service-oriented architecture (SOA) that allows simple, quick and low-cost composition of complex business processes from functionally, organizationally or geographically disparate systems and components. Much has been written about SOA and Web services, but mostly from a technical, academic background, focusing on special applications or features. The full benefit from SOA for today's corporations, however, comes from being able to adapt whole business processes and not just individual applications to ever-changing needs. The more flexible a business process is, the more it will benefit from a good SOA that covers a large number of process variants and supports the easy plug-in of many diverse components.  Campaign management can be considered a great benchmark for SOA because of its complexity and flexibility and because it involves transactional, planning and analytical components, thereby making use of the whole spectrum of enterprise software.   

Drivers for SOA

IT management of business processes is under increasing pressure from several directions; business processes are becoming more complex and flexible, while at the same time the degree and breadth of process automation must be continually extended to maximize cost savings. And all that has to be achieved with an evolutionary approach, taking into account an existing landscape with numerous systems from different vendors, relying on different technologies, being owned and used by different people inside the company.

Today's IT answer to this challenge is a so-called service-oriented architecture based on Web services technology. Research and development in the SOA space is driven by academic and technical experts; while for most IT practitioners, SOA is just a new hype that may or may not one day become reality. Most companies remain in a waiting position, struggling the old way with growing challenges - choosing not to investigate the potential in SOAs. This situation leaves service and infrastructure architects on the software-vendor side in their ivory tower, while business and IT departments continue to argue. Instead of sharpening the saw, companies continue to work harder and harder with "classical" means of process integration to fulfill at least part of the requirements they are facing. As we will see, campaign management (CM) is a very typical business process in that respect.

Campaign Management Challenges SOA

Usually, CM spans several components that cover different sets of functionalities such as planning and budgeting, segmentation and analysis, customer contact channels and - don't forget - supply chain and fulfillment. Most of the underlying software systems are either poorly connected or not connected at all. Many of them don't "belong" to the marketing department; some not even to the company, as CM has several "exits" to external service providers. A frequent example is the mailing house that takes care of sending out direct mail campaigns. Similarly, outsourcing is found for other contact channels such as call centers. But external partners also support CM by providing market data or address lists or by managing analytical aspects such as segmentation, forecasting and response prediction for the company.

CM often involves more than just campaign managers. CM affects a multitude of people inside and outside the company, many of them subject-matter experts either within a respective business area, an adjoining application/tool or some process step. Examples for other roles could be database marketer, marketing assistant, interaction center manager and interaction center agent. Most of these users contribute in several stages of CM and work, often utilizing multiple software applications to do so. Given the diversity of people and disconnected systems, tracking the status of campaigns usually takes a lot of personal communication - as the information from disparate areas lacks centralization that otherwise would enable everyone a consolidated view.

This disparity in information makes CM an ideal candidate for a portal solution where a variety of information services can be plugged together based on an individual's role and needs.

CM is not a stereotype process that is simply repeated the same way, over and over again. While there are common patterns such as seasonally repeated campaigns, there are usually numerous changes to a campaign at each iteration. In some cases, campaigns may even be changed midstream. Multiwave campaigns are no longer a visionary idea.

Why is there this need for flexibility in CM? There may be internal motivations to change the CM process, such as reducing cost by replacing an expensive service partner with a cheaper one. However, the major and more fundamental reason for changing requirements is that the CM process is targeted against the outside world, trying to influence customer behavior. Being outward-facing, CM is receptive to the many changes happening in markets, consumer behavior, technologies and legislation. Last, but not least, competitors do what they want and not what you wish. As a result, the successful campaign from yesterday may not have any effect today and may even end up being a disaster tomorrow. This is not just true for CM - many other CRM processes show a similar dependency for the same reason: being influenced by external factors that are not controlled by the enterprise.

Campaign Management - A Process Driven by Information

CM is still, in many respects, a manual process with a lot of replication of data by flat file or cut and paste. Integration and automation are still far from being a reality. However, CM actually has a high demand for information integration in nearly all phases. During preparation of a campaign, data about markets and customers as well as results from previous campaigns are needed in order to tailor offerings and target groups appropriately and to predict success and demand. Later on, customer reactions coming in through diverse channels such as sales orders, mail replies or other types of responses have to be collected, interpreted and causally related to the campaign. In multiwave campaigns, this information is then directly used for the next activities with the customer.

The complexity of the campaign process also includes the risk of side effects not foreseen when planning the campaign. The most dangerous side effect of campaigns may be a high degree of customer defections, e.g., due to too frequent contacts, inadequate communication by call center agents or campaign messaging contradicting the customer's experience with the product or service. For some industries and businesses, customer defection may be relatively easy to detect, such as a due contract not being renewed. More subtle changes in customer behavior, however, are not as easily identified. Other critical situations in campaigns may be exceeding costs, unfulfilled demands or cannibalistic effects on products other than the one being advertised. Because side effects are not predictable by their nature, good alerting services are needed.

For evaluation of campaign success, a variety of information has to be available for reporting - forecasts, target lists, budgets, costs, responses, orders, baseline sales and so forth. These figures allow comparison of plan and actual values as well as calculation of key performance measures such as response rate, lift or ROI. They are not just important for improving future campaigns by learning from mistakes in the past but may also have direct impact on bonuses of employees or payments for external service providers. Unfortunately, campaign success measurement is very often not done systematically. Marketing in most companies is still driven by creative rather than scientific or more methodical approaches, but also in part because of the effort it takes to bring all information together.

Information integration needs in CM are a major source of cost and frustration in many companies, as the required data is typically spread over many sources and needs to be replicated and mapped manually with a high degree of effort. Some of the data required may also follow special privacy or security regulations so that this data cannot simply be copied into another environment. Imagine a bank, for example, that would allow uncontrolled replication of account information into local files for analysis!

Not surprisingly, marketing departments are often a driver of data warehouse projects. Data warehouses take care of much of the data collection, cleansing and transformation work and provide an ideal basis for analysis while also implementing appropriate data access policies. At least as often, however, marketing departments are also undermining central data warehouse efforts by building their own data marts, focusing on their own needs and installing their own rules and guidelines.

Information integration also has another aspect - information about the campaign needs to be available in all channels and at all relevant points in the company. A typical situation might be that a customer - instead of replying to a mailing by completing an order form - calls the interaction center or a familiar sales rep in order to get an answer to an additional question. But will the agent or sales rep know about the campaign at all? Information about the campaign, its messaging, timelines and conditions, has to be available at all touchpoints. On the other end, production, supply chain and even suppliers need to be informed about planned marketing activities in order to be able to supply the demand.

Customer segmentation is special in that it may not only have the need for different data when determining a new target group, but this data may have to be processed by a number of different methods. A variety of more or less sophisticated algorithms have to be available for cleansing, transforming, sampling and analyzing the data. Similarly, forecasting demand and predicting response rates critically depends on the availability of appropriate analysis services. An interesting side aspect of such elaborate analytics is that interest is growing in outsourcing such analyses due to the expert knowledge and tools needed - resources that many smaller companies cannot afford to maintain. Web services may prove to be a very valuable technology in this respect.

The Promise of SOA

How does SOA solve this dilemma? CM fulfills the major requirements for a business process to be the guinea pig for SOA - it is associated with the major drivers for innovation, importance and pain! IT departments complain about inefficient use of technical and human resources and about business users that apparently don't know what they want. At the same time, marketing is frustrated because of IT's inflexibility, so they begin searching for their own workarounds and quick solutions.  This leads to building new islands of applications and data in order to be independent and at least get some work completed. The board, finally, is dissatisfied with high bills and poor outcome resulting from campaigns. The pain is everywhere!

Why is SOA the cure to this pain? Web services are the quick answer many people would give. And they are definitely right in that Web services are a great technology that makes plugging components and systems together much easier. Loose coupling can make reconfiguring campaigns a simple task that takes a matter of minutes instead of months. Also, SOA enables the "wrapping" of existing functionality and components into new Web services. This better enables an evolutionary approach where "recycling and revising" is the norm rather than replacing, which is often much more expensive.

However, Web services are only part of the answer. Like many other technologies, Web services solve the how problem but not the what-to-do problem. To be of full use, Web services require the functionality they encompass to be well defined. A service that it is too broad may require more changes than just the desired new functional features. In extreme cases, poorly designed services may have to either be scrapped or completely overhauled to avoid losing advantages unique to the older service. A service should group meaningful things together so that a change later leads to only minimal adaptations. Finally, commonalities with other services should be further abstracted into another service. The appropriateness of services can only be validated against current and future needs from the business. This is where things get difficult.

Over decades, software architects have increased the levels of abstraction in programs, but process architects are lagging behind. They didn't have to worry about splitting processes into services. Instead, they formulated processes on a very high level and left the task of translating this into information structure and technology to software developers and implementation consultants. Before the advent of Web services, business process experts had little motivation to think about process abstraction.  Process reuse was too "loosey goosey" and a stretch for both IT and business conventional wisdom. The gap between process and IT was too wide and further supported the hard coding of business processes.

Now with the opportunities provided by Web service, technology process architects can map their processes into encapsulated services. They will deduct common features, differentiate functionality, and give business processes a structure that translates cleanly into Web services with the right degrees of freedom and a clear understanding of where in the process what level of flexibility is needed. However, this task is difficult and takes time, as there have been many cases where several iterations are needed before appropriate services emerge. Obtaining a successful business process management requires focus toward service orientation.

SOA's Competitive Advantage

Companies should start today to invest in design of service-oriented processes, not only service-oriented software. SOA platforms ultimately will be utilized for broad, productive use in large enterprises.  Those that wait to adopt and internally evangelize SOA architectures may be forced to play catch-up and will be at a distinct disadvantage.

Further, it does not create a true competitive advantage to apply an industry-accepted best practice or a standard process touted by a software vendor that sells to its many customers.  Competitive advantage lies in the unique business processes that a company can implement with its SOA - as individual as its market and history, and consistent with the proposition it is selling to its customers and prospects.

The deep and structured knowledge about its individual business processes - both current and intended - will be the real value of SOA for an enterprise. There is a lot of work that can already be done where this understanding has become clear. Why not start wrapping Web services around those modules that are already known to persist over the next years? Why not invest in data warehouse and portal projects? If done properly, building these platforms would be strategic investments in the sense that they allow the company to quickly build their processes on top of this information basis and people-integration framework, even though the exact design of the processes is not known at that particular point of time. Beyond serving the operational needs within a process (for segmentation or success measurement in CM), an information basis will also help to determine which processes are important, where they have gaps and issues, and which services will be required. In that sense, analytics serves both strategic and tactical aspects of business process management.

Special thanks to Andrew Grimes and Sven Hensen, both from Inforte, for their very valuable contributions to this article.


For more information on related topics visit the following related portals...
Service-Oriented Architecture.

Marcus Dill has been a CRM and BI analyst at Inforte since 2004. Of his 15 years of experience in information systems, he had worked the last seven years as consultant, software architect and development manager at SAP AG in the customer relationship management and business intelligence development departments. Dill holds a Ph.D. in genetics and did his postdoctoral at the Center for Biological and Computational Learning at MIT.  He can be reached at marcus.dill@inforte.com.

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