Don't miss opportunities to use CRM to enhance the bottom line.
Posted May 5, 2003
A customer withdraws a third of her account from an investment bank. For the fourth time, an online shopper places an item in his shopping cart--and then abandons it. A homeowner notifies her insurance company that she's moving. Three days have elapsed since a promotional email was sent, and many customers haven't responded.
In today's challenging economic climate, companies can hardly afford to miss opportunities to enhance the bottom line, either by capturing new revenues or by cutting operational costs.
Unfortunately, this is exactly what they are doing every day: missing business events that translate into revenue. Most enterprises have deployed a diverse potpourri of front- and back-office systems: some mainframe-based, some client-server, some Web-based. These applications come from many different vendors--sometimes hundreds of them.
Individually these systems perform their specific missions well. They don't, however, coordinate with one another, potentially letting millions of dollars slip away.
It's about coordination
Consider if a bank alerts its customer service and sales force automation systems in real time when its customers liquidate large percentages of their portfolios. Perhaps, by presenting new offers, the bank could retain some of those funds. Or an online retailer might retain its customers by sending an email offering free shipping after the fourth abandonment of a shopping cart. By creating a dialogue between different systems, companies can coordinate appropriate responses to business events and generate added revenue.
By coordinating disparate business systems at the business-event level in real time, enterprises stand to realize revenue streams they previously missed. This then is the promise of the real-time enterprise. But given the state of modern enterprise applications, how can the promise of the real-time enterprise be achieved?
A new class of integration software is emerging that places a lightweight layer of digital "connective tissue" around key enterprise applications. Rather than requiring massive, complex and expensive data pipes or warehouses, real-time event coordination servers recognize key business events in applications (change-of-address, low inventory, large withdrawal, etc.) and pass them on to other systems that can take advantage of these notifications.
Real-time event coordination embraces the diversity of enterprise applications, and recognizes that business logic in those systems--representing substantial enterprise intellectual and capital investment--should, by and large, remain there. Real-time event coordination simply makes the activities of each system known to other systems that can exploit that information. Thus, event coordination as a strategy for achieving the real-time enterprise recognizes the value of existing applications, rather than seeking to replace or re-architect them.
What is a "business event?" In general, it is any occurrence that relates to the company's strategic goals. But since companies differentiate to compete, business events differ from enterprise to enterprise.
Business systems, however, already contain the logic to recognize and handle these events. For example, a sales force automation system knows how to handle a new contact; a call center knows how to handle a change-of-address; a point-of-sale system can handle an invalid credit card. Real-time event coordination embodies the notion that these events may well be strategic to the entire business, not just to the application handling them, and therefore should be propagated to other appropriate applications according to rules formulated by the business user.
Putting the line executive in the driver's seat
A key tenet of unlocking the value of the real-time enterprise is returning control of the business to the business user. After all, it is they, the line executives, and not IT staff, who are accountable for implementing enterprise-strategic objectives like improved customer retention or better up-sell. If, for example, the line executive wants the abandoned-shopping-cart notification to go to the email system on the third aborted purchase instead of the fourth, the line executive should not have to call the IT department to program that change.
Line executives should have a "control panel" that allows them to easily control and monitor the operation and flow of business events through various applications. Having this view of their business processes would allow them to measure the effectiveness of the programs devised to meet the company's goals. Such a tool cuts, or even eliminates, the substantial cost of synchronizing business and IT departments to respond to program changes or adjustments. This kind of control reduces or eliminates the need to create and maintain custom programming on multiple systems.
Solving the data problem
Of course, event coordination isn't entirely free. Data remains one of the thorniest problems in systems integration. Simply stated, dozens or even hundreds of applications in any given enterprise may maintain information about key business objects: customers, products, trades, subscribers, households, promotions, and so on. But their implementations, that is, their database record formats, differ.
The most common solutions to the data integration problem are enterprise application integration "pipes" and data warehouses. Application integration pipes translate one database format (and semantics) to another, while data warehouses attempt to unify numerous application-specific databases. Both solutions are costly and deployment-intensive.
Real-time event coordination elegantly solves the data problem. The IT user is provided with a tool that scans existing data sources that build comprehensive business abstractions, such as a "customer object" or "trade object." These objects contain critical, business-strategic information about their subjects. More important, these business objects are the "payload" of events.
Thus, when an e-commerce Web site fires a "purchase event" to the event coordination server, the site also passes as context "customer" and "product" objects, which all connected applications understand. This one-to-one mapping (system-to-object) eliminates nearly all the complexity that current many-to-many integration technologies require.
Realizing the promise
Having then defined the key business events and the objects they carry, enterprises are ready to exploit all the advantages of the real-time enterprise: capturing millions of dollars in missed revenue; restoring control of the business back to those accountable for it; and responding in real time to changing customer, competitor, and market conditions. Moreover, companies can achieve these remarkable goals without replacing any of their existing business applications.
Implementing the real-time enterprise is a straightforward, evolutionary step for IT and for business managers. But its effects are truly revolutionary.
About the Author
As CTO and vice president of development, Barry Briggs invented AptSoft's event coordination technology, for which he now leads the development. Previously, as CTO of Wheelhouse, Briggs led the engineering team that developed a new customer relationship management platform that helped companies react more quickly to customer concerns, questions and actions. Before that he served as co--CTO at BroadVision and as CTO for Interleaf, which was acquired by BroadVision in 2000. Prior to Interleaf, Briggs served at Lotus Development Corporation as one of its senior technologists and chief architect of Lotus 1-2-3 among other major technologies.
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