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The Strength of Experience

  • September 01 2004, 1:00am EDT

Innovative Systems has experience working with customer data. In fact, the company has 36 years of experience helping organizations that need a complete and accurate understanding of their customers. Headquartered in Pittsburgh, Pennsylvania, with European operations based in London, the company also has representative offices in Argentina, Australia, Brazil, Mexico, South Africa and Spain.

Innovative Systems began as a consulting organization, and their first client was a local political party. They developed techniques to analyze voting patterns to target where the party should spend advertising dollars. As they expanded and worked with other political parties, one of the recurring themes was the need to reduce the number of voter names down to a household basis. This led to the development of software for that purpose, and the company began marketing their software to banks where there was a compelling need for a product to assist in the management of large name and address files. By the mid-nineties, Innovative Systems had collaborated in creating the customer information files for approximately 70 percent of the banks in the United States.

Innovative Systems now provides data profiling, data quality, data linking, data integration and compliance solutions, all powered by customizable business rules and knowledgebases comprised of millions of words and word patterns. These knowledgebases - including a 3 million element knowledgebase for name and address information - have been finely honed and refined, building on the company's 36 years of customer data management project experience.

The Data Quality Challenge

For most organizations, data quality is a challenge. In fact, data quality consistently appears in DM Review's annual readership surveys as one of the top three challenges that organizations face when implementing business intelligence and data warehousing projects. "Unfortunately," says Jeff Canter, executive vice president of operations at Innovative Systems, "a Pricewaterhouse-Coopers survey conducted in 2000 indicates that while a preponderance of board-level individuals indicate data quality is important, only a small minority report a willingness to spend money on it. It is our experience that organizations come to the realization that they need a data quality solution when their multimillion-dollar CRM project isn't working because the data is suspect and nobody wants to use the CRM solution because they don't trust it. Or, they see the need for data quality when they have a customer data integration problem across the enterprise - which is what our Synchronos product is designed to address. Or, they begin to focus on data quality because they don't want a 'friendly' visit from the Justice Department or the Treasury Department for violating any of the tenets of the PATRIOT Act, Sarbanes-Oxley, Basel II, the Bank Secrecy Act or the Financial Services Modernization Act. Data quality is always a byproduct, and I think that is one of the critical mistakes made by many organizations. Fortunately, it is getting better, and we're now seeing a lot more executives talking about the need for data quality."

Innovative's Industry Firsts

  • Introduced the first use of complex matching and householding technology for fundraising and national political campaign work
  • First heuristic matching software that learns from processed data
  • First data verification software
  • First data scrubbing software using a data dictionary
  • First mainframe online matching
  • First mainframe online householding
  • First data quality knowledgebase
  • First auto-generated daily enterprise customer database from disparate application systems
  • First "super householding"
  • First customer relationship management system using "social neworking"
  • First open-systems online data quality search engine that households, matches and super-households
  • First "influence value" database
  • First in "super matching" to define nonintuitive, purpose-view customer relationships
  • First fully integrated solution for data profiling and customer data management

One of the major reasons for the groundswell of interest in data quality centers on compliance. "Compliance is the here and now because everybody is afraid of violations, and the fines and public image problems that go with them," says Canter. "Our i/Lytics SECURE product can help significantly minimize the amount of false positives that are generated in a compliance review. There is nothing about compliance that is revenue driven, and the goal is to minimize the cost of being in compliance. Reducing false positives saves money because every positive that appears must be investigated, and that's a cost. Likewise, it is important to reduce the false negatives because the ones that get through cause the non-compliance and may result in fines or worse," he adds.

In addition to compliance initiatives, another enterprise problem area is also driving customers to Innovative Systems. "I think the longer-term driver is the lack of a truly integrated view of the customer - despite all the promises and all the money that's been spent for CRM, ERP and all of the other three-letter initialisms that were supposed to be answers to the world's problems," notes Canter.

"The whole concept of a single view of the customer - the unified view - has not yet been adequately addressed. Those views have been suspect and the data has been suspect. Consequently, people choose not to use the systems - whether they're CRM, ERP or sales force automation. Either that has happened or people have been told they must adapt to the view of the customer required by their purchased system. The problem is that they may be running a department that will be unable to meet its organizational objectives if it adapts and adopts the system's required view. If the users are good soldiers and they do adopt the system's view of the customer, they must make so many fundamental changes in the processes they use to run their department or division that they can no longer hit their organizational objectives. Our Synchronos product is designed to support the concept that there is a specific reason for each department's organization of the data it uses. Through Synchronos, we support the concept of 'purpose views' that provide a synchronized perspective on the customer, taking the best of all the different views and synthesizing them into an enterprise view that anybody can choose to use or can use as a reference against which they can compare their existing data or view," explains Canter.

Customer Data Integration

"We look at customer data integration first and foremost as a data quality problem - a scrubbing and matching problem," notes Canter. "It is necessary to standardize the data sufficiently to create reasonable, realistic and reliable links between customer data within a system and then across systems. Once those links have been created and you can identify that John Doe in one system is the same as J. Doe in another and John R. Doe in yet another, you've solved the biggest part of the customer data integration problem. Once the initial matching problem has been solved, the more complex issues need to be addressed. How will the data be stored? How will it be accessible? How will it be maintained over time? And the maintenance is the real trick because things change constantly."

Synchronos was developed specifically to solve the customer data integration challenge. "Why would someone choose a company whose core strength is anything other than customer data quality?" asks Canter. "What makes Synchronos so special is that it comes from a firm whose entire experience set is driven by customer data quality," emphasizes Canter.

Innovative Systems, Inc.

Year Founded: 1968
Privately Held
Number of Employees: 70+
Number of Licenses: More than 350 active software licenses

Jeff Canter

Last Book Read: Churchill: A Life by Martin Gilbert
Favorite Game: Basketball
Most Respected Politician: Harry Truman
Dream Car: 1964 Ford Galaxy 500 XL Convertible
Favorite Vacation Spot: San Diego
Most Admired Contemporary Individual: Lee Iacocca
Most Admired Historic Individual: John Adams
Favorite Television Show: West Wing
Favorite Team: University of Pittsburgh Basketball
Hobbies: Community theater, cooking and classic cars
Favorite Types of Music: Big band and standards
Favorite Food: Steak
Favorite Beverages: Iced tea and coffee

The customer master registry is the database portion of Synchronos. "It is not a replication of all of a company's customer data," says Canter. "Synchronos is focused on creating a means of identifying clients by virtue of their name and address information and their product-level relationship. We do not include a lot of product characteristics such as profitability. We are not a CIF or a marketing system or a profitability system. What Synchronos does is enable all of the other systems to function more efficiently."

Focused Expertise

"Innovative Systems is a focused business," says Canter. "We are experts in customer data quality and customer data management. We don't invest time trying to be generalists. We work very hard to be experts in the field of customer data, and we have been very successful in that area. If an organization is concerned with customer data and customer data management issues - data quality, integration, compliance-related issues and utilization of customer data - they should know that is what we are all about. We are unique because of our focus, heritage and experience with customer data."

Jeff Canter, Executive Vice President of Operations for Innovative Systems

One of the cornerstones of Innovative Systems is their commitment to customer service. "That may sound trite or like something every software company would say," says Canter, "but our customer retention rate of 96 percent speaks volumes about our company and our products. Our customers stay with us because they know we are focused on customer service, and our goal is to make sure that our customers get top value for the money they invest in Innovative Systems products. We realize," he adds, "that a six-figure investment in software is not a trifle. In the current economy, that is a significant investment. Respectful of the financial investment made in our software, we work to be sure that our customers get what they paid for," says Canter, "and we provide the knowledge transfer that gives them the expertise they need to use the software. We also want them to have the lowest total cost of ownership possible and the fastest time to implementation," says Canter.

Products from Innovative Systems include: i/Lytics, a comprehensive data integration solution for strategic customer-focused initiatives such as customer relationship management, business intelligence, enterprise resource planning and data warehousing; i/Lytics Data Profiler, a next-generation data profiling solution that enables organizations to accurately and efficiently analyze and diagnose the quality of their customer data; Synchronos, a solution that establishes a centralized master registry that coordinates all points where a customer may interact with an organization and provides the benefits and functionality of the single customer view without requiring extensive changes to the individual applications; i/Lytics SECURE, a turnkey compliance solution that enables public and private organizations to compare client records against virtually any database or list of suspects; and eWatchLine, a purely hosted Web Services extension of the i/Lytics SECURE offering that provides online compliance for customer name checks and/or the process of validating customer identities.

Providing Value

Ensuring that their customers reap the full value of the software they purchase from Innovative Systems requires a company-wide commitment. "As a private company, we are very culture-driven. We do business the way we think is right, and we don't have to answer to external shareholder demands. Our business model reflects the principles of Bob Colonna, our founder, president and CEO. When companies invest money in our products and put their faith in us, we are committed to giving them what they paid for and what they expected. That's the way we operate, and it bears great fruit as evidenced by our customer retention rate. We believe it is the only way to do business properly. We take that attitude, live that attitude and instill that attitude in everybody that works here," remarks Canter. "The business model that we have requires us to renew our customers' trust in us year after year, and it is the strength of that business model, of our software products, our employees and our consulting services that has sustained us through 36 years. We are very proud of that."

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