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In retail banking, for example, the
number of transactions across all chan-
nels will increase 9.9% through 2010,
according to the Tower Group’s 2007 Web
seminar “Going from ‘In Line’ to Online:
Transaction Migration in the U.S.” By 2010,
40% of transactions will be on the Internet,
with 23% to the call center and 19% each at
a branch or ATM.
Internet use is not limited to PCs. “Online”
increasingly means mobile phone connectiv-
ity via Web access protocols (WAPs), which
accommodate phone screen sizes. The con-
tinued growth in mobile phone sales—now
at 3 billion—along with WAP capabilities
means continued unprecedented growth in
the number of Web transactions. The latest
technologies let users download custom cou-
pons and boarding tickets, as well as transfer
money—mobile cash—onto their phones.
Smarter Web systemsThe Teradata depiction (see figure, page 49)
of the decision-making maturity continuum
can be adapted to highlight opportunities to
use enterprise information and insights to
make Web systems smarter.
Stages 1-3 show how the enterprise data
warehouse (EDW) is used to develop strate-
gic insights. Stage 1 might include reports on
how many people are using the Web, when,
and how much product they buy. Another
report might show the number of customers
who are “lookers” versus “bookers” and how
many “lookers” are buying at a store instead
of online. Other examples are scoreboarding
The growing importance of the Internet requires an Active Enterprise Intelligence approach. by Dave Schrader
Change the
Of all the “active” channels
to customers, the Web is
growing the fastest. Approximately
1.4 billion people, 21% of the
world’s population, are now
online, according to www.
internetworldstats.com, a site
that tracks Internet usage and
population trends. Web use ranges
from 73% of people in North
America to 5.3% in Africa; about
half of Europe is connected.
Transaction volumes are rising on
every channel; however, the mix
of use is changing, with the Web
channel growing the fastest.
Web Channel
PAGE 1 | Teradata Magazine | September 2008 | ©2008 Teradata Corporation | AR-5716
reports of internal operations, such as which
packages are at risk of missing guaranteed
delivery deadlines or how many widgets are
being produced per hour.
Stages 2 and 3 focus on using the data
warehouse with business intelligence (BI) and
Web analytics packages to do ad hoc and pre-
dictive analysis of customer activities, includ-
ing Web browsing. By capturing click-stream
sequences in the EDW, an organization can
see the history of each customer’s interac-
tions. The tools can be used to spot where
dwell times are highest—perhaps because
individuals are reading about products of
interest—or analyze where they might be get-
ting confused and bailing out. These insights
might be used to drive Web site redesigns.
In Stage 3, organizations use predictive
tools like SAS and KXEN to build models of
customer segments and their cross-channel
activities, to provide answers to various ques-
tions: What is the next best product to offer
based on up-to-the-moment store purchases
when the customer returns to the Web site?
Does this customer have a high propensity
to churn, based on clues from Web-browsing
behavior, like looking at new call plans?
By conducting pricing experiments on the
Web, an analyst might build price elasticity
insights—at what price this customer seg-
ment will buy online.
Stages 4 and 5 concentrate on the use
of these strategic insights to improve
front-line, operational systems. Such
insights can be applied to improve real-
time, tailored variations of the Web for
each customer:
> Customized Web screens. Provide
recommendations on custom advertis-
ing in one portion of a home page for
the next best travel deal, an invitation to
a free wealth management consultation
on a financial Web site or a suggestion
pop-up to switch to lower-priced generic
drugs on a healthcare site.
> Customized sequence of Web screens.
Add “decision points” based on insights
ABN AMRO, an international bank and insurance company
with 19.8 billion euros in revenues in 2007, uses its data
warehouse for strategic insights and drives those insights into
Web operational systems.
A typical application involves customized Web
advertising. At any time, the marketing group has 50
advertisements ready to display on the home page
when a customer or prospect comes to the site. The question is:
Which offer should be made to each customer? Using a call-out to
its Teradata system from the Web engine for guidance, ABN AMRO
displays the best-suited ad within two seconds. With 175,000 Web
sessions per day, the result is 63 million personalized offers per year.
Does it pay off? A typical non-targeted bank ad achieves a
0.2%, or 1 in 500, click-through rate. But by
applying better insights, ABN AMRO reports
click-through rates of 1.1% to 5.5%, resulting in
purchases of additional bank products. And a
bonus from their disciplined approach to next best offers is that
the same insights are reused on call center agent screens.
—D.S.
Decision-making maturity continuum
The decision-making maturity continuum highlights opportunities to develop and apply insights, in this case, to the Web.
ABN AMRO
PAGE 2 | Teradata Magazine | September 2008 | ©2008 Teradata Corporation | AR-5716
to enrich the customer experience
with greater depth and relevance. For
example, instead of a telco home page
providing lists of all available prod-
ucts, the Web rendering engine might
use insights to trim it to service pages
for the products a customer already
has, coupled with sales pages for only
the products that person is most likely
to buy.
In the Web world, most companies
have built standardized portals, often
three—one each for customers, partners
and internal employees. The focus is on
widening simple information access and
using the insights to drive context-aware
sequences of Web pages that anticipate
what users are trying to do based on roles
or personas. The system uses current data
about the customer (Where is the person,
perhaps based on GPS feeds or ATM loca-
tion?) along with historical context (Have
we seen this situation before?) and system
state/optimization rules (What can we do
to optimize this customer’s experience?).
An example from the airline industry is a
passenger missing a connection. The airline
knows the passenger is on the first leg of
a trip and that a flight delay will prevent a
planned connection. It knows whether the
individual is en route on the plane or wait-
ing to board. It also knows the rest of the
system’s status, so it can construct alternate
connection plans. Additionally, the airline
is aware of the value of this particular cus-
tomer and the likelihood that the person
will defect because of other recent incidents
like lost bags or canceled flights. When the
plane lands and the customer accesses the
Web via a mobile phone, an “active” airline
would make the first Web screen be the
contextually most relevant one. In this case,
“Your revised travel options” might appear
first on the WAP page.
Making it happenAs Web use grows, it’s more important
than ever to drive projects that connect
data-derived insights to your online chan-
nels. But what will that take?
An Active Enterprise Intelligence approach
works only if you can forge the right triad
of application architects, operational system
owners and database administrators (DBAs),
coupled with a change agent who sees
the opportunities generated by your data
warehouse investment. A DBA can start
by educating the owners of the Web, then
participating with corporate architects in
building a company-wide, customer-centric
vision of how to use and reuse information.
With business groups, you might need
to foster a “customer dialogues” project,
working with your customer relationship
management team leaders and BI users,
and possibly a governance committee. This
ensures that customer insights are captured
in one place, documented and systemati-
cally reused across various channels and
departments for competitive advantage.
Finally, “making it happen” requires
good project management skills, because
cross-organizational projects are difficult to
direct. But with focus and persistence, you
can activate the Web channel with deeper
insights, resulting in wider use of your data-
base investment, as well as fostering better,
more consistent customer experiences. T
Dave Schrader is director of Strategy and Active
Enterprise Intelligence Marketing for Teradata.
A prime example of operational use of the Web
comes from Norfolk Southern Corp. (NS), a
$9.4 billion-per-year railroad company. More than
three years ago, NS was looking into helping the
power users help themselves faster. Wider sets
of users—internal front-line groups as well as more technologically
savvy business partners—needed access to up-to-date and histori-
cal information about shipments by themselves without waiting
for NS to help. The approach taken by Blair Hanna, manager of
e-commerce, and Mark Wittl, manager of customer applications,
was to build a Report Wizard, with access to more than 125 fields of
information so that users could modify existing reports or easily build
their own. The philosophy was “Serve yourself,” anytime, even at 3
o’clock in the morning!
It worked. Expanding access to information led to wider use
of the Teradata system, with more than 12,000 customers now
using the accessNS Web portal. In addition to
the 1,900 standard reports that NS Support
provides to more than 30,000 users each week,
users themselves created 9,500 variations of
the reports and 4,400 new reports. They can set
run schedules and delivery options for their reports. The system
holds 8TB of data, with 4TB of user data. Various data elements
are refreshed at different rates—by the minute, hour, day, week or
month—depending on the business needs.
“The users love it,” Hanna says. “It takes most business users only
five to 10 minutes to customize their reports, and sometimes new
users never even need to contact us at all while creating their own
reports.” New Web reports, created by NS Support, are typically
built in a half-day or day, depending on the complexity. These capa-
bilities definitely improve the ease of doing business at NS.
—D.S.
Norfolk Southern
PAGE 3 | Teradata Magazine | September 2008 | ©2008 Teradata Corporation | AR-5716
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