Related Topics:
			Business Research: Customer Performance Vendor Research: Actuate, AIM Technology, Business Objects, Cerebit, Cognos, DataFlux, Enkata, Kalido,Hyperion, IBM, Information Builders, Intelligent Results, MediaTrac, MicroStrategy, Omniture, Oracle, Portrait Software, QuePlix , Salesforce.com, SAP, Saratoga Systems, Siperian, Stratature, Teradata, Trillium Software, unica, Tealeaf
			Printer friendly version Email this article Send feedback to editor

Summary
New research from Ventana Research finds that organizations are struggling to come to terms with information system architectures that over the years have come to consist of multiple disconnected and unsynchronized systems that each contains some customer data. As a result, only one company in 10 has total confidence in the quality of its customer data. The most widespread problem, according to the benchmark research, is that records for the same customer exist multiple times in the same system and in multiple locations, but because of variations in the customer’s name they cannot be brought together easily. To deal with this problem, nearly half of the organizations participating in our research designate one system as their master source of customer data. However, only about 20 percent of these attempt to synchronize this source with all the other systems in their architecture, so the disconnect remains.
 
The most harmful result of this situation for organizations is an inability to create reports and analyses of customer data that truly present a single, complete view of all the dealings a company has with any one customer, so the highly sought after “360-degree view” of the customer remains elusive. Competitive pressures make it imperative that organizations resolve the problem. Our research finds that most are taking a step-by-step approach, with the first step the creation of a single definition of “customer.” There then follows a process of extraction, integration and quality management to create a single, clean source of customer data. Initially most organizations want to use this primarily as the source for reporting and analysis; only a few advanced organizations have evolved this approach into a full customer master data management initiative.

View
In our benchmark research – sponsored by DataFlux and media partners BI Review, Business Intelligence.com and DMReview – one-third of the organizations providing input reported they have customer data in two to four systems, while slightly more than one-fourth said customer data resides in 10 to 20 different systems. And this doesn’t take into account multiple instances of the same system; for example, an earlier study showed that six percent of organizations have more than 50 instances of their enterprise resource planning (ERP) system, and each of them likely contains customer data. We also found in the research that those working on the business side of organizations assert more often than those in IT that the number is only two to four systems. We attribute this understatement to business units having knowledge only of the systems they use to meet their local requirements, while IT typically has a broader view of the total systems landscape.

It’s common, then, for organizations to have both a number of different types of systems containing customer data, including ERP, customer relationship management (CRM), business-specific applications and data warehouses, and multiple instances of each type. In addition, more than two-fifths (42 percent) of organizations researched hold customer data in desktop spreadsheets. Ventana Research believes this situation has arisen because users unable to get the information they need from other sources have taken to extracting customer data into their own spreadsheets and producing their own analyses. For organizations this practice means that different users rely on views based on neither the same nor a complete set of data.

On the positive side, more than half (57 percent) of those providing input said they intend to change the situation. To actually do this, we believe, organizations first have to come to grips with who “owns the customer.” The research results show that today the question is at issue; the largest group (22 percent) said that IT owns this data, and the remainder spread ownership among a variety of business units. While it is good to see that an innovative six percent of organizations have created a special group to focus just on the customer, overall Ventana Research believes it should be a joint responsibility and that organizations should create a partnership between business units and IT to take charge of what is one of a company’s most important assets.

Several benchmark research studies by Ventana Research show that the first best practice in unifying customer data is to create a data governance board jointly staffed by business and IT people to set the strategy and then to oversee both short- and long-term process and technology changes that will be needed. Once this in is place, our results show that organizations initially are taking a pragmatic approach, with their first priorities being to create a single source of customer data and use it to create the 360-degree view. In the short term, this means creating a single metadata definition of “customer,” extracting customer data from multiple sources and improving the overall quality of that data. There are established technology vendors that can help with each of these steps. Only after organizations have achieved this do they then go on to creating an architecture where this “golden” source of data is synchronized with all systems in the architecture. Once again, there are established vendors that can help achieve this objective.

Assessment
Many organizations now acknowledge the need to have a 360-degree view of their customers, but it seems that most are still struggling to produce it because of the complexities of their system architectures and the resulting poor quality of their customer data. Competitive pressures and legislative requirements have made these issues more acute. Ventana Research finds in its research benchmarks that only a small minority of organizations understand (much less calculate) the full cost to their business of having poor-quality customer data. We believe that if organizations add this to their evaluation of the situation, they will realize the urgency of resolving it and allocate sufficient resources to do it.