Diagnosing Customer Data Disorder

Fundamentally, the goal of IT is to deliver accurate, complete and relevant information in a secure fashion to people and processes on demand. Information about the parties you do business with is a critical asset. As organizations grow over time both organically and through acquisition, data about customers is stored in many places in the enterprise. Each data store is defined differently, used by different business processes and updated by different business applications. The keys for and links between the data that describes customers get out of alignment with the characteristics of customers in the real world. Customers themselves change frequently, as do the business processes that manage customer information, the business logic in applications and the metadata associated with the data stores. The difference between people and legal entities in the real world and the information we have about them is called customer data disorder (CDD). When the condition is advanced, business performance suffers. This article explores the outward signs and symptoms of CDD and an approach you can use to understand the current state of business.

Business Symptoms of Advanced CDD

Customer relationship management (CRM) is the first place to look to determine if your organization suffers from CDD. CRM, whether homegrown or packaged software, sustains the business functions that market, sell, fulfill and support your goods and services - the relationships with your customers. Poor data quality is the number one issue cited in the failure of CRM. Business symptoms of CDD include:

Customer satisfaction scores and churn rates do not move substantially,
Increased conversion rates at point of contact and lower acquisition costs do not materialize and
The cost to market to and serve customers continues to increase.

The front office depends upon information and analysis from the back office. The "warehouse" is often used to describe a collection of functions that include basic reporting, segmentation, what-if analysis, predictive models, risk management and reporting to comply with regulations and legislation like Sarbanes-Oxley (SOX). Business symptoms of CDD in the warehouse include:

Inability to understand the number of products owned by a customer and the patterns of adoption,
Inability to understand customer lifetime value,
Difficulty predicting the next best offer and likelihood to accept and
Reporting results for a customer in conflict from different sources.

Between the front office and the back office, most organizations implement a cross-reference of customer-to-account information. These solutions go by many acronyms, such as CIF (customer information file), CDB (customer database) and MDB (marketing database). In many cases, the only legitimate customer to account cross-reference is managed by a marketing service bureau. Over the last few years, the umbrella term CDI (customer data integration) has been used to describe software and services to implement these solutions. Lately, CDI has given way to MDM (master data management) to make room for other important enterprise domains such as product and chart of accounts. Regardless of what you call it, business symptoms that all is not well include:

The business cannot agree on definitions for customer, relationships and hierarchies across functions and brands,
It takes too long to bring party data sources into the repository and
There is an inability to bind legacy systems to the repository at the transaction level.