• May 12, 2006
  • By Coreen Bailor, (former) Associate Editor, CRM Magazine

Companies Still Grapple with Effective CDM

It's no secret that quality customer data is a top corporate asset, especially when it comes to converting that data into profits. According to a recent Aberdeen Group report, however, the bulk of enterprises continue to struggle to effectively manage customer data. "Customer Data Management: Gaining a 360-degree View of One's Customers," by Leslie Ament, director of customer intelligence research, underscores that although organizations have invested heavily in customer data capture, storage, and analysis, they need to further establish customer data integration, quality, and analysis processes. They also need to develop capabilities that allow customer intelligence to be applied at the line of business level. Fifty-four percent of all study participants, compared to 50 percent of best-in-class respondents, are challenged by extracting and normalizing customer data captured from multiple data sources. Thirty-one percent of all participants and 45 percent of best-in-class respondents struggle with establishing customer analysis processes like profiling, segmentation, and acquisition/retention modeling. Forty-two percent of all participants and 35 percent of best-in-class respondents are challenged by verifying data accuracy or completeness. Twenty-four percent of all companies and 30 percent of best-in-class companies are challenged by securing the budget and resources needed for customer intelligence management (CIM). The report splits customer data management (CDM) vendors into four groups: data quality/synchronization, customer data integration (CDI), master data management (MDM), and Software as a Service (SaaS) or outsourced service providers, and provides vendor analysis on vendors in each category. Aberdeen Group notes that the value proposition of data quality/synchronization includes lower TCO and faster-than-manual processes. Vendors that deliver data quality/synchronization tools include SAS subsidiary DataFlux, Business Objects (which completed its acquisition of Firstlogic in April), Innovative Systems, Purisma, Similarity Systems (which was acquired by Informatica--a move announced in January), Sterling Commerce, and Trillium Software. Aberdeen recommends that enterprises with multichannel customer touch points, high use of third-party data, and/or large numbers of transactions per customer consider such functionality. CDI automates processes that integrate data to provide a 360-degree view of the customer, with vendors offering several architectures to address integration requirements, according to the report. Vendors including IBM (with DWL, a supplier of customer data integration software it acquired in 2005), Informatica (with Similarity), Initiate Systems, Nimaya, Oracle, Pervasive, and Siperian, provide CDI functionality. Consider CDI tools to automatically manage related processes to boost service levels, get a greater understanding of customers, and optimize investments, the study recommends. MDM solutions provide organizations with "a trusted record of truth and support processing for both operational transactions and BI," the report states. Vendors examined in the report that provide MDM capabilities include IBM, Oracle, SAP, and Siperian. Aberdeen contends that enterprises that need high accuracy data when processing operational transactions and analytical reports should consider MDM. The SaaS or outsourced service provider approach, which results in low TCO and quicker deployment time, should be considered by enterprises with minimal IT support or that want to focus on core competencies, according to the report. Vendors that provide functionality using this model include Experian, Pervasive Software, Princeton Softech, Sterling Commerce, and ValueCentric. Aberdeen Group recommends that companies seeking CDM solutions evaluate multiple options from the vendor sectors to assure a best-fit situation and examine areas including deployment options, consulting services, accountability, and external data sources. "While some of the software vendors have professional service teams to manage implementation and integration, others partner with system integrators," the report states. "Outsourcing all of an organization's customer data management processes on a persistent basis is an option best explored through specialized providers...and/or consulting firms." Related articles: Does Your CRM System Contain Quality Data or Just Data?
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