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May 28, 2009

Customer Relationship Management/Enterprise Application Integration/Business Intelligence and Data Warehousing (CRM/EAI/BI) products can fulfill MDM Needs - Biggest Myth!!!

Fully fledged Master Data Management (MDM) packages have been in the market space since the turn of the decade and many fortune 500 companies have implemented the MDM solution to achieve tremendous value within their industry domain. I have been in the MDM Consulting stream for the last couple of years but still realize the need to evangelize the need for an MDM solution among peers within the CRM/EAI/BI domain space. Many of the renowned implementation using matured products such as CRM, EAI and BI has put forth a view that the respective products within various domains can indeed be customized to meet the MDM specific requirements. This is predominantly wrong for the very reason that just because each product stack (CRM/EA/BI) can fulfill a partial subset of requirements within the MDM domain, the central core of an MDM suite (360 view of customer including Data stewardship process to manage the golden copy of the customer) cannot be customized on a CRM/BI/EAI product stack. This blog helps in acting as a myth buster for some of the common misconception around CRM/EAI/BI products fulfilling the MDM requirements.

CRM is able to handle all the customer attributes and can manage 360 degree view of customer/CRM does handle customer demographics- Myth buster

Some customers think that a CRM product implementation can manage customer demographics and can fulfill the need of getting a single view of customer in the enterprise. The claim though partially true, cannot meet various functionalities around the Customer Master data. A few are listed below

  • CRM products come with a data model to manage customer interactions and customer management, however it is not able to support the multi-form, multi-domain requirements that truly represents a 360 degree view of customer.
  • CRM products are not able to group the customer demographics requirements into customer preference management.
  • CRM  products are not truly designed for Service Oriented Architecture (SOA) based master data services, to facilitate Create Read, Update and Delete (CRUD) transactions on Customer data from various systems in the enterprise

EAI is able to provide the true integration between disparate Customer information systems- Myth buster

I have seen many of colleagues within the EAI space mentioning that EAI product has all capabilities to handle Meta data related to Master data entities and can transform and share the data with disparate systems. Though it is partially true, EAI products fall short in meeting various requirements in the MDM space.

  • EAI products typically are not packaged with pre built Schemas for multi domain, multi form master data entities like Customer, Product, and Location etc.
  • EAI products seldom come with data consolidation frame work and built-in data quality features.
    Even if one want to leverage existing EAI and CRM investments and convert them as a custom MDM solution they  may end up undertaking massive customization and having higher footprint with less than optimal performance
  • EAI built over CRM data model cannot meet the Non functional requirements stated in a typical MDM project.

BI does handle consolidation among various customer repositories- Myth buster

Additionally I have seen references where many customers treat their BI solution as a customer master data hub. The concept itself is dismal, since a truly integrated transactional multi channel ecommerce system requires real time data which cannot be met through a BI solution. (Key channel systems ended up getting stale data). BI packages are built up for OLAP (for reporting and analysis purpose), but not to maintain and manage transactional Master data. Though BI packages come with Data consolidation frame work (summarization and aggregation) they are not able to meet the functional requirements of a true MDM solution.

  • BI products do not support transactional data and cannot fulfill the real time transactional data requirements mandated in most domain space.
  • Typically BI products do not come with SOA frame work to support the primary needs of data synchronization required in an MDM product.

My personal experience so far with clients who have tried to retro fit their existing CRM/EAI/BI products into a fully fledged MDM customer data hub have failed  Either their existing CRM system could not meet the transactional requirement required in terms of performance or data synchronization and/or EAI system having limitation in providing the multi-domain, multi-form customer focus and/or BI systems failed to provide the real time information for business critical systems like Banking, Telecom, and Insurance domain etc.

This discussion is not definitely old wine in new bottle, and many a times there requires a need to convince the customer (both internal and external) the need for procurement of a commercial of the shelf MDM solution to meet the extensive Master Data management requirement over a much hyped view of converting their existing investment into a fully fledged MDM solution. Though it is prudent to carry out a fit-gap analysis against their existing CRM packages, it is extremely important for clients to understand the limitations of CRM and other domain packages in fulfilling MDM needs.


May 17, 2009

SAAS - Where is the money, honey?

True, we are going through unprecedented era. There have been feelers that the US economy has been able to overcome the tide of recession. Goldman Sachs was able to report a profit (http://www.financialpost.com/news-sectors/story.html?id=1492381), this quarter, though they had to resort to usage of a $10 billion bail-out package from the US Treasury, as late as October 2008. This may lead to more banks trying to balance and juggle their financials to declare a profit, the subsequent quarters. So what does this have to do with SAAS? Well everything! Most companies who operate in the SAAS space have been failing to pass on their operational efficiencies to the client, leading to the client aggressively trying to cut the cost outlay for managing these hosted applications. Clients have evaluated switching over to a new vendor for the hosted application or have tried to bring in-house the functionalities delivered by these hosted applications. The SAAS players have aggressively tried to reduce the per user cost and has offered slab based bundling price to keep the exodus of their current clientele list.

Recently, I was discussing the financial scenario with a colleague of mine, who has started a SAAS firm in US. They operate in a niche segment and the business model used is to manage and to monitor the print capabilities of large publishing houses with remote soft-ware that can effectively manage the entire inter connected printers. The entire print and publishing capability is outsourced and the client just gets a monthly bill, just like a pay-as-you go telephone bill. The clients are delighted with the business model, and they obtain customized print features (gloss, texture of the print medium, color) based on the target audience. True the model seems outlandish, but the embedded software has been made by the best of brains from MIT and has the support from Venture capitalist that provides seed capital for such innovative ideas. The embedded software is able to manage and monitor the consumables utilized in the printing process. Yes, it is true that they have been able to break-even by aggressively collaborating with Small and medium business enterprises, Printing channel partners (GA/VAR – graphical arts value added resellers) and publishing houses. The participating partners are able to realize the benefits by focusing on their core business model and competency, while non-core processes are outsourced to the SAAS provider. For the particular SAAS firm the profits earned is in sub minimal level per copy, but when the volumes are huge, e.g. during elections, they do make a good amount to tide over the capital cost incurred in setting up the infrastructure. Additionally the SAAS firm needs to have a service oriented focus, i.e. Customer first, and the belief customer needs the best in terms of customized service always.

So where is the money, honey? It is definitely in SAAS, if you have used Innovation as the underlying factor while coming up with the business model and is able to deliver consistent value to your end-customers in terms of personalization and customization.

The white labeling business and importance of CRM

White labeling of products/services is not a new business and is in every sector. However there is a big difference from products to services industry. White labeling of services involves integration of IT systems on both sides of Retail Service Provider (RSP) and Wholesale Service Provider (WSP).
 This is throughout customer life cycle starting from marketing the services as retailer branded products, fulfilling and assuring of the sold products under RSP's brand in the WSP's IT systems as well as RSPs systems.  The example situations where white labeling is used is British Telecom's internet services are being sold by Royal Mail, Vodafone, O2 etc. Similarly in India, local cable operators and internet service providers sell the products/services in their brand name.
Traditionally we are aware that the CRM systems used for product catalogue, marketing, sales and order capture as a part of customer data and relationship functionality. In some cases CRM tools go to the extent of service assurance (recording customer problems and tracking the SLAs). 
I tried to think about few important areas in CRM that gets impacted by this latest business model. These include
1) Wholesale Product Catalogue Management - Creating and maintaing these new wholesale product catalogues for Retail Service Providers and ensuring the synchronisation of these product/services between RSPs and WSP systems.
2) PartnerRelationship Management with these RSPs who can make our services penetrate in remote areas and in areas where the presence is less. Handling these partners is an impacted area.
3) Product fulfillment of RSP Customers When RSPs sell the white label products in their brand, the corresponding product on WSP needs to be fulfilled/provided and track that order to closure, this impacts the CRM system and related integration on WSP side. Also B2B integration with the RSP systems.
4) Assurance to RSP Customers Ensuring that if a customer problem arises because of the systems (not only IT) on wholesale service providers side identifying those situations and providing solutions to the customer and also informing the RSP about the progress of resolution is WSPs another important area.
These are a few that came into my mind. Can we think of a few more areas that gets impacted and how can we accomodate this new business model? Can we think of a small framework to address this latest business model? Waiting to see your inputs.