Published in DM Review in February 2004.|
Printed from DMReview.com
Customer Intelligence: Business Activity Monitoring: On the Path to the Real-Time Enterpriseby Larry Goldman
On the Path to the Real-Time Enterprise
This is the last column in a series of five that describes the different maturity levels pertaining to a customer intelligence road map. This month's column discusses the details of the fourth and final stage of the customer intelligence road map ? business activity monitoring (BAM).
As customers become more demanding and the speed of business continues to increase, the most successful companies know that delivering the right information to the right audience is critical.
A real-time enterprise (RTE) gives business managers access to the newest information when it is most relevant and provides them with the ability to take immediate action.
RTE was introduced decades ago through advanced supply chain techniques used by automotive manufacturers. Now, coordinating materials across multiple suppliers to build the cars in current demand is simply a way of doing business for the industry.
Today, RTE is gaining popularity in other industries, driven by the need to solve the following business issues:
BAM is an essential part of RTE, as it provides the infrastructure necessary for real-time access to the key performance indicators that run and monitor the business. It is an extremely valuable tool that organizations can leverage to react to customer issues, monitor product delivery and provide continuous improvement of their customer- facing business processes.
Companies ready for advanced customer intelligence programs such as BAM are typically trying to solve the following business issues: cost reduction through process improvement; visibility into the health of the business; responsiveness to changing competitive, customer and supplier conditions; customer retention; risk management; product customization; and business partner collaboration.
Key Attributes of BAM
BAM solutions can typically be broken down into four components: event detection, event processing, display and reaction.
Organizations considering BAM have already established and implemented advanced customer relationship strategies and technologies. At this point, they are ready to focus on the more sophisticated and mature customer intelligence issues that BAM answers, such as "Is my organization aligned with our new strategy?" and "How do I know that new business processes are being adopted?"
The event detection component of BAM applications monitors businesses by looking for anomalies, trends and performance indicators buried inside everyday transactional data that has eclipsed certain thresholds. These applications proactively detect issues with a company's strategy or a particular business process. For example, a satellite company's customer service center may be set up to detect unresolved customer issues.
There are thousands of events that take place at a company on an hourly basis; therefore, firms must choose specific areas to monitor. Common examples include:
Different industries generate data and, subsequently, systematic events at different speeds and volumes. For example, a business-to- business organization selling multimillion dollar network switching equipment may have one sale a week or build just 10 products each week. However, a consumer-based organization could be fielding hundreds of phone calls per minute or have thousands of transactions coming through their cash registers worldwide per minute.
The event processing component of BAM systems filters through myriad events occurring at an organization and, through user defined business rules, identifies those events that are most important. The event processing component helps companies answer the following questions:
Earlier in this column, we noted that a satellite company is tracking the percentage of call center issues that are unresolved. The event-processing component of BAM will detect when a certain percentage of unresolved issues is logged (predetermined by the satellite company), deem the event significant and alert a manager. At that point, the manager can analyze the unresolved issues and determine whether there may be an outage in a specific neighborhood or a technical issue with a specific product.
While event processing is the key foundation of a BAM system, the user interface for a BAM application is the most critical component (see Figure 1). The display is what business decision-makers will ultimately view, and the usefulness of the BAM system will be evaluated based on how the information is presented and how easily it can be interpreted.
BAM applications typically display information in the following ways:
Using our example, the satellite company may determine that displaying customer calls through a simple row-and-column format is not intuitive and does not reveal any true insight. Instead, the call center manager may see all customer issues displayed on a color-coded map, with the unresolved issues highlighted in red.
BAM is different than the other levels of the customer intelligence road map because of its focus on taking action on the information once it's received.
The reaction component of BAM outlines the different ways in which employees can leverage information to make decisions. Decision enablement is a building block toward BAM. While decision enablement focuses on making sure companies can track and evaluate their decisions, BAM focuses on real-time alerts and actions in a fluid, dynamic system.
Many BAM systems integrate analytical capabilities with transactional systems in order to be able to react quickly and operationalize decisions immediately. For example:
The satellite company in our example may "react" by automatically load balancing its call centers to alleviate wait times if they detect an area outage to their satellite service.
Are You Ready for BAM?
Mainstream BAM is still down the path for many organizations, as most are not ready for its real-time and organizational impacts.
BAM needs enormous organizational support, process definition and training to be effective, which is why it is the highest stage in the customer intelligence road map.
Organizations must answer serious questions before investing in BAM technology including:
Most importantly, organizations must examine how the organization will respond to this type of infrastructure. For example, if you are having trouble getting employees to look at daily reports, will they look at and utilize real-time data? How will real-time access to the information turn into real-time actions? What decisions are front-line managers allowed to make? If you have real-time data, are you empowered to make real-time decisions?
True acceptance and demand for BAM systems is still probably a few years away. Many organizations are strengthening their customer intelligence infrastructure and trying to ensure they are getting value out of their current customer intelligence environments before moving on to advanced programs such as BAM.
BAM leverages event detection, event processing, advanced display techniques and reaction values to move organizations into a real-time environment.
When is the right time to move to BAM and toward a RTE? What is the right level of investment in this futuristic technology?
The key questions companies should ask themselves are:
If the magnitude of these events adds up to serious lost revenue or results in customer defection, then the implementation of a BAM system for your organization may be closer than you think.
Larry Goldman is president of AmberLeaf, a customer intelligence consultancy. He has more than 13 years of experience in database marketing, business intelligence and customer analytics, as well as customer and marketing strategy, customer experience optimization, sales force automation and call centers. He can be reached at firstname.lastname@example.org.
Copyright 2005, Thomson Media and DM Review.