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Business Intelligence:
Borderless Business Intelligence

  Column published in DM Review Magazine
January 1998 Issue
 
  By Susan Osterfelt

A watershed article was published in the July, 1997, edition of Wired magazine. It was entitled "The Long Boom" by Peter Schwartz and Peter Leyden and discussed the powerful forces in motion today that have led up to a global economic boom. A truly global economy is emerging, brought on in part by the end of the Cold War and the breaking down of borders--the fall of the Berlin wall, the collapse of the Soviet empire, the creation of the North American Free Trade Agreement (NAFTA) and the development of the European Economic Community, among other events. The authors discussed the array of new technologies that have contributed to this phenomenal integration and expansion. In my opinion, these changes have generated a related worldwide technology trend--global business intelligence. Brought about in large part by the emergence of the Internet, it is now possible for a company to obtain insight from information that knows no borders.

There are three "waves" of business intelligence. Business intelligence had its start with access to data within a particular function within the organization. Enterprise-wide business intelligence was the next wave, bringing the ability to share data among functions, but still within the organization. Now, with global business intelligence, fundamentally enabled by the Internet, we can access information external to our organizations, which can be used to achieve competitive advantage. We can break down barriers to trading data, thus extending the reach of our organizations.

What does borderless business intelligence (BI) mean for a company? Global business intelligence means using external data for organizational benefit within a decision support or analytical environment. Basically, borderless BI involves a data partnership, where information is shared across companies for their mutual benefit. One or both companies in the partnership provide access to selected internal data for joint business reasons.

Implementing Global BI

There are two ways global BI can be implemented. A company can sell or transfer data directly, such as a retailer collecting point-of-sale information and allowing access to it by key suppliers. Or a company can mine its own internal data on behalf of the other company without physically transferring the data. Either way, a company can be a data vendor or a data recycler. A data vendor is a company whose business is consolidating data from multiple sources and selling the data to customers (ACNielsen, TRW and Equifax are examples of data vendors). A data recycler is a company that collects information on its customers or markets as a matter of doing business, where that information can provide value to other companies.

Data Recycling

Most of us know and use data vendors today for obtaining demographic or other information directly. However, let's explore an example of a data recycler that has developed an information product that is a quantum leap in direct marketing. This data recycler is First Data Corporation (FDC); their product is called U$A Value Exchange. First Data Corporation is a processor of credit card transactions for many different card issuers. As a byproduct of their basic business, FDC collects information on consumer credit card usage. Their U$A Value Exchange product allows retailers to take advantage of this vast store of credit card usage data to target customers based on buying habits. Without selling the data directly, FDC provides retailers the ability to visit the FDC Web site (www.valuexchange.com) and select criteria for targeting customers with special discounts. Each cardholder receives only the offers they qualify for, based on target marketing criteria such as geography (state, region, ZIP code, etc.), behavior (transaction history, overall purchases, airport destinations, credit limits, etc.), whether he/she is a competitor's customer, a traveler, a big spender or fits within another target group. The credit card holder gets discount offers as a part of their bankcard statement. When they use their card to purchase the item, the retailer gets new business. FDC provides this service not by selling the data directly to the retailer, but by mining the data on their behalf. U$A Value Exchange is a completely new type of service that demands attention. It offers business intelligence that disregards any borders between organizations, providing a simple, yet effective, way to achieve mass customization.

There are new Web-based possibilities in the direct sale or transfer of data as well. Cognos Corporation has a new product called DataMerchant that provides secure packaging, merchandising and distribution of information globally across the Internet. With this product, a company can package internal data (like the point-of-sale data mentioned earlier) by product, by manufacturer or by store, making this information available to suppliers directly over the Internet for query and reporting. Suppliers may then be able to understand how their product is being purchased so that they can manage their inventories across all stores. Again, this is borderless business intelligence.

The Internet is having a profound effect on the sharing of information. It has enabled an expansion of business intelligence gathering activities by any company--small or large. The key to taking advantage of this enabler, however, is the recognition by an organization that its internal data may be of value to others--that the data is potentially revenue-generating. While data vendors know this already, many potential data recyclers don't. With some out-of-the-box thinking regarding the value of information, entrepreneurial companies can become data recyclers. However, any organization can gain significant advantage in the use of global business intelligence by utilizing the Internet to go beyond the enterprise. Traditional borders are now in large part nonexistent.

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

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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