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Business Intelligence:
Got Money?

  Column published in DM Review Magazine
January 2000 Issue
  By Susan Osterfelt

Industry pundits claim that once Y2K issues are resolved, spending for data warehousing and business intelligence projects will double, or even triple. Hmmmmm ... I admit that spending related to Y2K issues will, at some point, subside. And I believe that spending for data warehousing and business intelligence (BI) activities will rise. Many companies will purchase products and services for initiatives put on hold due to Y2K. But I'm not sure I believe that spending for warehousing and BI projects will double or triple in volume.

There are a lot of DW/BI vendors drooling over the prospect of increased expenditures. (They are probably spending, in their minds, those increased sales commissions on luxury cars, boats, cruises and what not!) But even strategic reports, such as Frost & Sullivan's U.S. Data Warehousing Software Markets, outline challenges for the industry to stay profitable.

I, for one, am pretty sure that my company will not be doubling its spending for data warehousing. In fact, it seems that the DW/BI budget is tighter than it ever has been. So naturally I began to think of things to do when the data warehousing/business intelligence budget is tight.

One action that could be taken is to make sure your company is getting full value from business intelligence tools/applications you already have. Can more seats on current licenses be negotiated at the same cost or for only a modest increase? Do your users need assistance in getting the most value from their tools? Do they need additional training? Or do they really need handholding regarding formulating queries and/or prediction models? Maybe observing their business processes, seeing what works and what doesn't, and modifying queries or models based on results would provide increased usage and value (as well as happier users).

Another potential idea for something to do on a shoestring is to prioritize data needs. Look at data usage. Get rid of data no one has used in the past year or two. If no one has accessed a particular set of data for that period of time, chances are that the data is not that important. Talk to business users about what data is more important for them to access. Contrary to popular opinion, some data sources or data categories are more strategically valuable than others. Freeing up space and saving extract cycles may provide room in the ongoing run rate to fund new data needs. Make sure budget dollars for extracts from new source systems include Web/clickstream data sources. It is critical that Web usage data be integrated with legacy transaction data to provide a complete picture of customer activity.

A third idea for what to do when the budget gets tight is to prototype a personalization tool ­ and get the vendor to share the cost of the prototype. Personalization is a hot topic, and most companies would be wise to begin thinking about how to leverage both legacy and clickstream data to show their customers they "know" them. Companies that can learn more about customer preferences ­ how they have done things in the past, what problems they are likely to encounter or what products they are likely to need next ­ and that can transform themselves to answer customer needs will define the rules for competition going forward in their industries. Many vendors are jumping on the bandwagon to provide personalization tools to help companies achieve a one-to-one customer experience. While everything costs money, and a personalization prototype is no exception, organizations might be able to negotiate favorable pricing if vendors are truly hungry for the business.

If the definition of data warehousing/business intelligence is broadened to include operational information issues, find some money to invest in tools that close the data mining loop ­ by taking the results of data mining and making them actionable within the operational environment. An example is mining data to determine those customers most likely to defect and then creating an operational trigger to prompt the customer service representative with an appropriate script to anticipate or solve the problem or suggest appropriate remedies.

It all comes down to your company's appetite for spending. Got money? If your organization is not going to open the budget floodgates for DW/BI initiatives after the Y2K dust settles, maybe some of these ideas make sense. If you have unlimited budget available, spend, spend, spend. Vendors will be only too happy to take your money.


For more information on related topics visit the following related portals...
Business Intelligence.

Susan Osterfelt is senior vice president at Bank of America, in Charlotte, North Carolina. She can be reached at susan.osterfelt@bankofamerica.com.

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