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Driving Toward Action: The Action Stage

Published
  • May 01 2005, 1:00am EDT
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In December, we talked about the life cycle that organizations go through to transform data into action:

  • Data
  • Information
  • Insight
  • Strategy
  • Action

This month's column focuses on the action aspect of the life cycle. At the end of the day, the purpose of business intelligence is to provide information to decision-makers at all levels of the organization so that they may manage their part of the business better. We all make decisions every day based on incomplete information. Business intelligence closes that gap and should thus surface more efficient processes, better understanding of customers or suppliers, more profitable marketing programs and a higher ROI on your sales force.
Action comes in many forms, but some of the newer categories can be described as: technology enablers, decision automation and change agents.

Technology Enablers

Though many people equate strategy with technology implementations, most customer-facing organizations know that technology only succeeds when implementing successful marketing, sales or service strategies. Just recently, I found myself having to explain to a director of marketing, "You know that this project will only work if the marketing ideas are good." Eyes glazed over as the awareness set in that the data mart does not actually do marketing; it only supplies the information. Shock turned to terror with the realization that a marketing strategy should probably be built.

At this point in time, campaign management has become mandatory for organizations pursuing direct marketing. Campaign management is a key part of marketing action as it documents, controls, executes and monitors direct marketing campaigns. The purpose and importance of campaign management continues to be obvious as Unica has filed to go public this year. Unica, DoubleClick, Epiphany and Siebel are currently starting to be challenged by Aprimo, smartFOCUS and Chordiant as less sophisticated marketing organizations question the price and complexity of the top vendors.

Organizations that have graduated from campaign management are starting to look at sister products called marketing resource management (MRM) products. MRM products help coordinate the marketing process, ensuring that efficiencies are gained by the implementation of marketing automation. Many organizations understand very quickly after a campaign implementation that marketing operations need to drastically change. MRM helps automate and adopt that change.

Personalization is now real and has proven to be more important during service interactions than sales interactions. Initially, personalization was thought of as a cross-selling vehicle (which it still is), but has become a more potent retention and acquisition tool by customizing online and service call experiences. By understanding customer value or inferring intent and interest in certain products and services, customer service reps and Web sites can morph the interaction to something compelling and relevant for users and customers. Sophisticated organizations calculate customer profitability on the fly to understand what services, service levels and products can be offered at what price.

Sales best practices provide a great example of putting decision support into action. With sales force automation becoming more widespread through application service providers such as NetSuite, Salesforce.com and Siebel, organizations still want to see the ROI on sales force automation (SFA). The most powerful result I have seen is the visualization and analytics that help determine the tasks, communications and strategies that lead to closed sales. Though there will always be a portion of your sales force that will perform exceptionally without help, the majority of large sales forces would be more than willing to hear about best practices that help other sales reps close deals.

Decision Automation

As dashboards, management reporting and analytics start to permeate more organizations, executives want to push the limits of how nimble they can be once decisions are reached. Rule engines, business activity monitoring and business performance management software are angling to move beyond providing information and into action.

Letting systems automate actual decisions starts to make people think of movies such as Terminator or the Matrix in which things did not go so well for humankind. However, through event, exception and intelligent business rule processing, organizations are starting to allow customer intelligence to suggest courses of action (investments in marketing campaigns, customer specific service levels, inventory replenishment, etc.) for human review. As organizations become comfortable that the system is repeatedly advising them correctly, fuller automation starts to streamline activities even more. In this way, large organizations can seemingly move from identification of issues to resolutions as fast as small companies.

Change Agents

Though it has become lip service, change management has become more important than ever. Business intelligence is only required for a small handful of users in most organizations. However, firms taking customer intelligence extremely seriously are embedding analytics in all of their customer-facing business processes. Employees who have trouble shifting to the use of information in their daily lives are struggling to stay relevant in their jobs. Those who embrace analytics are being viewed as fast-trackers.

The methodologies to change human behavior to try to accomplish things differently are complicated and unstructured. However, those organizations that have successfully been able to show the benefits of analytics during the execution of business processes are reaping benefits.

Winners

I wanted to point out United Airlines as a winner in the action category. As they fight to rise from bankruptcy, United is putting an enormous amount of customer intelligence into new marketing campaigns, new services and new products. This type of massive testing only gives them more customer intelligence regarding what works and does not work for their different customer levels. Interesting ideas that have surfaced lately are prompts to buy a first class seat for a little extra money during online purchasing; the Ameniti program, which offers 2 for 1 flights and status at Starwood hotels; and short-term promotions to boost short-term travel.

Losers

Vacation organizers, cruise ships and others in the entertainment industry have developed great profiles on what people like to do with their leisure time. Why doesn't my favorite dive shop in the Caribbean tell me when shark season is on? Why doesn't my favorite adventure travel outfit know that I would rather have my eyebrows removed one hair at a time than jog? This type of inaction does not drive retention and repeat business.

The Results

A comment I make to many of my clients is that they need the right balance between operating the business and managing the business. These two different mega-business processes merge when we talk about action. Analytics helps us manage the business but should provide recommendations, red flags and alerts to those operating the business. It is the coordination between operations and strategy that leads to financial results.

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