Michael Schroeck would like to thank Sumant Raturi for contributing to this month's column.

It is becoming rather clear that the success of a company's e-business and data warehousing strategies will be dependent upon the tight integration of these complementary, enabling solutions. That is, global companies will not be successful in e-business in the long term without leveraging data warehousing; and, on the other hand, future data warehousing efforts cannot be totally effective unless they support e-business as an important channel for delivering products, services and information.

The proliferation of the Web has not only altered business models for existing companies, but is enabling new companies ­ which in the past may have had little success against "brick and mortar," traditional competitors ­ to emerge almost overnight. Both kinds of companies, when transformed into e-businesses, have adopted new models for how they interact with their customers, focusing primarily on three goals:

  • Personalized interaction
  • Instant customer feedback
  • Sharing critical, relevant information with business partners

A data warehouse plays a crucial role in attaining all three goals, functioning not only as the primary source of information to support Web-based business, but also as the recipient of data from the Web site. In this way, a data warehouse and e-business converge, performing together in a "closed-loop" system.
Typically, an e-business model is categorized either as business-to-customer (commerce takes place between the customer and a business offering either products or services over the Web) or business-to-business (one business is interacting with another business that may be its customer, supplier, distributor or reseller).

The Business-to-Customer (B2C) Model and the Data Warehouse

The business-to-customer model is primarily designed to provide customers with the capability to search product catalogs and make purchases over the Web. It provides immediate information, eliminates intermediaries and gives customers an easy and intuitive shopping experience. To the customer, it should appear as a seamless system where inventory, shipping, payment methods and other back-office processes are integrated, resulting in vast improvements in efficiency.

A data warehouse can be used to store customer information from multiple systems, such as order entry and promotions, making it possible to analyze past customer behavior and to create and present personalized, dynamically created Web pages. This personalization not only offers an enhanced shopping experience but can lead to stronger customer loyalty and increased sales. This capability can also be used to target specific audiences for product promotions and to capture additional customer information including demographics and product interest/behavior patterns, which are indicated by click-throughs and are, in turn, captured and fed back into the data warehouse.

Such a data exchange between a data warehouse and a Web site can help a company gain valuable insight into customer buying patterns, perform "buy and replenish" analysis, conduct and analyze customer satisfaction surveys and execute focused e-marketing and/or direct marketing programs. This information also allows companies to analyze Web site performance and abandonments as a first step toward tuning and improving the overall customer experience. This is especially important when you realize that your most fierce competition is only seconds away from your best customers.

The Business-to-Business (B2B) Model and the Data Warehouse

A business-to-business model enables a company to share data and conduct commerce with a second company over the Internet. While the "second company" may be a customer, it could also be a supplier, distributor or partner. Therefore, this model not only incorporates sales but inventory management, production scheduling, EDI/Web-based payables and receivables, RFP and bid processing, and so on.

A company offering this kind of reliable information to its business partners adds value to the communication channel and strengthens business relationships with suppliers, resellers, distributors and corporate customers. Following are some of the ways in which a business can share data, over the Web, from its data warehouse to improve efficiency:

  • A business can allow its suppliers to plan their production schedules by accessing and evaluating an organization's manufacturing parts inventory data and forecasts. This enables inventory replenishment and "just in time" inventory management, reducing the need for large inventories.
  • By accessing its supplier's production goods data, the business can better plan its own production line and overall supply chain.

By giving a distributor or reseller access to sales data, a business can help partners monitor their own performance and assess the strength of their relationship. It can offer promotions, such as higher discounts, if certain quotas are met and, through its data warehouse, provide its distributors with performance comparisons to assist them in better sales planning, promotion analysis and category management.
Undoubtedly, sharing this kind of data requires a high degree of trust which becomes the foundation of all business relationships.

The Evolution of the E-Business

The Web, which has evolved from being a mere information-browsing channel to a sophisticated medium for conducting business, has enabled companies to offer products and services to a virtually unlimited number of customers. The traditional business has begun to respond to these challenges and fight for their customers, market share and alliance partners. The power of data warehousing can enable a business to protect and even enhance its position not only by understanding its customers, but also by better communicating and collaborating with its partners.

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