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November 4, 2009

Getting Business and IT on the Same Page

The Business Intelligence blogosphere is abuzz with questions about how IT and BI personnel can become more effective in serving their internal customers. In fact, a recent study by the Society for Information Management shows that even in today's tough economic times "IT/Business Alignment" is right near the top of CIOs' business concerns.

In the process of providing tools that help CIOs do their jobs and playing a consultative role in helping to bridge the gap between IT and business, PBBI often faces the issue of alignment as well. Over and over, we've found that the key lies in asking the right questions upfront.

Too often IT asks (or is told the answer to) the question: "What information do you need?" Armed with the answer, IT then goes off to ensure that they find a way to get that information back to the business as quickly and efficiently as possible.

However, if IT is to be truly business-aligned, the question that really needs to be understood before "What information do you need," is this one:

What problems are you trying to solve?

This is the place we always try to start with our clients, for three key reasons:

Reason #1: The information the business needs is invariably an outgrowth of the problems it is trying to solve. Questions - and the answers to them - evolve and beget more questions. The CIO and IT team that is actively participating in the process of defining and solving problems and questions rather than just taking orders for information is in the best position to provide true insight - and that has the greatest long-term value.

Reason #2: Information provided in a vacuum often has severe limitations. I'll give you a good example: quite a number of factors, if not addressed up front, can limit the accuracy of any predictive analytics. This point is illustrated in this recent PBBI white paper developed by our crime-mapping expert, which provides an insightful listing of the types of limitations that need to be considered.

You'll see that there are quite a variety of factors, ranging from underreporting of certain crimes to seasonality to data compatibility issues and more. Crime maps provided without acknowledgement of these limitations is just order-filling. And an IT team that fills these orders runs risks of running afoul of any or all of these issues. However, crime maps produced with an understanding the problem(s) the business is trying to solve, and the nature of the impact these limitations could have, can be adjusted for a more accurate reflection of circumstances.

Reason #3: Working collaboratively with the business also provides IT with a much greater opportunity to make its case for investing in necessary improvements in data quality. I blogged a bit about this back in August, citing a Information Difference Research Study, The State of Data Quality Today that reported that a full 63% of organizations had no idea what poor data quality may be costing them. By taking on a collaborative role, IT is likely to have better access to both the business' ear, and its purse strings. When you’re just taking orders, you're less likely to be able to sell the importance of data-quality investments across the business.

The bottom line: Information can be valuable. But Insight can be priceless.

In our experience, the best road to insight is collaboration between the business and IT, starting all the way back at the point of problem definition - do you agree?

Cross-posted at http://ebs.pbbiblogs.com/

Posted by PBBI at 12:45 PM | Comments (0)

November 3, 2009

What's next for the USPS?

By David Robinson

Cross-posted at the http://postalupdates.pbbiblogs.com/blog.

On September 30th, Congress approved legislation that gave the United States Postal Service a one-year reprieve on its obligations to pre-fund retiree healthcare benefits - averting a potential crisis as the USPS did not have the cash on hand to make this payment. (As noted previously, no other federal agency is subject to this requirement.)

With fiscal year 2009 in the books, the USPS now turns its attention to 2010 - and the outlook for postal profits remains bleak. Addressing the National Press Club last month, Postmaster General John Potter remarked:

Without a big change in the way we're required to do business, we're likely looking at a deficit of more than $5 billion dollars - for years to come. This is a critical public policy issue.

We've commented earlier on the various efforts the USPS has taken in light of their current budget challenge. And you have to give them a lot of credit. This past year, like a lot of companies, they stepped up their cost cutting, trimming $6 billion from their expenses and cutting almost 115 million work hours. All while service and customer satisfaction reached record highs.

One also has to agree that mail still ranks as a critical communication vehicle that connects businesses with their customers. Even with the recession, the USPS delivered 176 billion pieces of mail last year and generated over $68 billion in revenue - sales figures that most companies would envy.

The problem, according to Potter, is that the business model created to support the mail simply doesn't work anymore and changes are necessary. We agree.

So as we ask "what’s next" for the USPS, it is likely that you can expect changes to fall into a few categories: operational, legislative, marketing and innovation.

Operational. We expect postal officials to continue their work to create a more effective, more streamlined organization. Technology and process re-engineering will continue to play an important in role in cost reduction.

Legislative. The Mailers Council - a coalition of corporations, nonprofit organizations and mailing associations - has a vested interest in effective, low-cost postal service. So it's not surprising that they've published a white paper calling for new laws that would allow the USPS to compete more effectively. Among their recommendations: making it easier for the Postal Service to reduce its head count, close unneeded facilities and consolidate its retail network. They also propose changing the pre-funding schedule for retiree health benefits. Plus, they would also like to see a study on whether five-day-a-week delivery makes sense.

Some would argue that these are the same benefits enjoyed by other companies - the freedom to make well-informed business decisions - and clearly the USPS would welcome these legislative changes.

Marketing. In recent months, we have seen the USPS employ marketing tactics that are common for most businesses, but new for postal officials. The 'Summer Sale' and the current First-Class Mail incentive program provided mailers with good reason to mail more - a concept that may be continued if talk about a 'Winter Sale' holds true. The USPS is also looking to maximize the value of the 37,000 retail outlets known as "Post Offices" by expanding the breadth of products and services offered at these locations.

Innovation. From its roots in ancient Persia where relay messengers delivered mail on horseback, to today's barcodes, priority services and e-notifications, the postal industry has demonstrated an ability to reinvent itself over its 4,000-year history. So it was refreshing that PMG Potter did not conclude his speech at the National Press Club by discussing how to get through another year. Instead, he talked about taking a fresh look at the future of the Postal Service and its role in serving America - examining what the Postal Service will look like 7, 10 and 15 years from now.

Potter spoke of establishing a public dialogue about the future of the Postal Service - and we invite you to be a part of it. What do you want the USPS to do next? When you think ten years down the road, how might the Postal Service add value to your business? We welcome your thoughts.

Posted by PBBI at 12:45 PM | Comments (0)

Customer segmentation: Canadian Style

By Sebastien Rancourt

Cross-posted at the Strategy & Analytics Blog.

Canadian privacy laws set ground rules on how organizations may collect, use and disclose personal information. Under the Personal Information Protection and Electronic Documents Act, for example, personal information can only be collected when it is gathered with the knowledge and consent of the consumer - and only used for the reasons for which it was gathered.

Despite these data challenges, marketers and strategic planners have found effective ways to understand customer needs and create actionable customer segments. These insights and best practices - while particularly germane in Canada - are relevant to anyone looking to improve results by targeting more effectively.

Today's leading solutions begin with geo-demographic clusters. While cluster segmentation strategies have existed for decades, contemporary clustering methods use robust statistical data and advanced analytical power to capture, create and measure more precise customer segments based on geography, demographics and lifestyles. With the right data and analytical tools, organizations can characterize the behavior of every clustered customer - from their favorite movies and foods to their preferred attire and avocations - enabling users to more accurately predict customers' responses to every campaign.

Professionals in retail, financial services, media planning, real estate and restaurants, among others, rely on cluster segmentation to improve decision making and business results. Yet with the enhancements made in recent years, some marketers have yet to incorporate the latest advances which can boost overall performance. In speaking with experts across Canada, we've identified a series of best practices to help guide your next steps.

Segment by neighborhood, not postal codes. Some segmentation strategies rely on postal codes, which can lead to problems down the road. Each month, as many as 5% of the roughly 850,000 six-digit Canadian postal codes change, as Canada Post updates this system solely on the basis of their mail delivery needs. Not only does this taint campaigns in the short-term, it makes it nearly impossible to manage year-over-year modeling and analysis.

The best neighborhood segmentation clusters begin with census data at the dissemination area levels - which are the lowest levels for which reliable census data are published - providing hundreds of reliable data variables. In addition to data accuracy, these neighborhood-based models offer year-over-year consistency, so marketers can build on past success over time.

Incorporate household-level insights. This past year, leading cluster models have found ways to use more comprehensive household level data, incorporating consumer information that goes far beyond census findings. These inputs, which conform to Canadian privacy laws, represent an unprecedented level of detail and behavior-based data - and create a more high-definition view of customers and prospects.

Maximize data points. Not all household level data is the same. Some cluster models are built extrapolating data from as few as 8,000 surveys across the full population of 33 million Canadians. More reliable cluster models will analyze self-reported data from as many as 10 million individuals - providing for more accurate targeting and a lot less guesswork.

Overall, organizations that employ these best practices will benefit from a multidimensional framework that makes it possible to sort through the complexity of Canadian consumer culture without having to manipulate literally hundreds of census and survey variables.

One such solution is PSTYE HD, the Pitney Bowes Business Insight segmentation system created using an innovative two-step clustering process. The 59 clusters identified, including Canadian Elite, Joie de Vivre, Urban Verve and Next Gen Rising, leverage the largest and most robust repository of Canadian consumer intelligence to date - making it easier for organizations to locate new opportunities, connect with customers and communicate more efficiently. We invite you to learn more and look forward to your feedback.

Posted by PBBI at 12:30 PM | Comments (3)

October 28, 2009

Who cares about seven cents?

by Cynthia Williams

Cross-posted at Pitney Bowes Business Insight

News that the USPS will begin assessing fees in January 2010 on mailers who fail the new address quality audits has left mail operation heads scrambling to make sure they are in compliance with all Move Update requirements.

After all, the cost of non-compliance - up to seven cents per piece on a portion of your mailing - can easily bust your budget, especially at a time when everyone is looking for ways to reduce expenses.

Details on the latest USPS effort to curtail Undeliverable-as-Addressed Mail can be found in our earlier post and white paper, The Truth About Move Update. This white paper outlines how samples will be audited and the calculations by which fees will be assessed when mailers exceed the 30% error-rate threshold. Today, however, we want to discuss why it's important not only that you comply - but also how you comply.

After all, if the goal were simply to save seven cents, you could save that and more simply by not sending the mail altogether. But you can't - because the communications you send have a purpose. They help you connect with customers and prospects, collect revenues, meet government regulations and sell products.

While that may sound like motherhood and apply pie, we were surprised to hear about a mailer who decided to outsource move update compliance to a third-party because he felt it was the simplest, easiest way to save seven cents. The USPS was happy because addresses were updated and the piece was delivered. But at the end of the day - the information about those customer moves never makes its way back to the company.

Month after month, bad records are corrected, but the company fails to recognize new opportunities associated with these moves. They fail to target offers correctly because their data is wrong. Eventually, when the customer's "change of address" notice expires, they simply lose touch altogether.

This can occur when you don't receive the new address information, but the same poor result can occur when you have the data and don't update your records. You see - getting and using the data about a customer's move is worth far more than seven cents.

But we understand that it needs to be simple and easy, too. That's why so many mailers are excited about our new VeriMove Access solution. It's an "on demand" offering which means there are no software agreements. No changes to your underlying systems. And no need to acquire and pay for the USPS NCOALink license normally associated with on-site updates. Your addresses get updated and you get to keep the new data.

If you're interested about closing the loop, you'll also want to learn more about ways you can automate the cumbersome, manual process of correcting customer addresses—turning the codes generated from NCOA and ACS into actionable information.

It's a cost-effective way to keep track of customer moves. And yeah, it can help you save that seven cents, too.

Posted by PBBI at 12:30 PM | Comments (1)

Bigger than the sum of its parts

by Kit Hamilton

Cross-posted at Pitney Bowes Business Insight

Business intelligence. Predictive analytics. Data mining. Businesses today are truly recognizing the power that lies in their customer data.

The challenge is in harnessing that power, and doing so efficiently. BeyeNetwork blogger Krish Krishnan captures this issue - particularly as it pertains to the gap in solutions that can help to transform data into actionable information:

With market consolidation, companies are left with a mixed bag of solutions and now need to reassess their investments, new market offerings have not reached enough maturity and open source is not accepted yet as enterprise capable in BI. Where we need to go with this situation is to setup an interoperable solution where the vendor consolidation will not impact current investments. There were third party companies that used to offer these kind of solutions and we need a new series of such technologies to be recreated.

He's right in some ways: companies that want to better understand their customers have in many cases assembled a hodgepodge of different solutions to address different challenges. As the sources of those solutions thrive and consolidate (or wither and disappear), companies that have acquired them are left with a collection of parts built in silos that are condemned to stay in silos unless they find an "interoperable" solution to enable those parts to work in concert.

However, there are solutions providers, including Pitney Bowes Business Insight, who've recognized this issue and have been working steadily to create options - such as the Pitney Bowes Spectrum Technology Platform - to address this very issue.

Rather than sending companies back to "square one", solutions like Spectrum work in tandem with companies' core data quality platforms. Spectrum is designed to facilitate improvements in customer data quality, and augment/assess data for a range of purposes, from Enterprise Tax Management to Global Sentry Watchlist Monitoring to Enterprise Routing for Fleet Logistics. It also provides data quality connectors for SAP and Siebel - again, enabling companies to make the most of the systems they may already have.

We agree with Krish and the others who tout the need for solutions that can grow and change with the companies they serve - and help to provide the tools for enterprise-wide business intelligence and predictive analytics. Today's leading-edge data and software technologies should continue to grow and change to address those specific needs.

To learn how a common data enrichment and management platform can support needs across your entire enterprise, you can read more about our Spectrum Technology Platform.

Posted by PBBI at 12:15 PM | Comments (0)

October 20, 2009

Equipping Google and Bing for heavy-duty lifting

Cross-posted at http://li.pbbiblogs.com/

At this year's insights '09 user conference, we shared the stage with Microsoft and demonstrated how organizations can "power up" their Bing Maps to make better decisions using spatial analysis.

Developers were particularly interested in learning how our leading software development kit turned the maps generated through Bing and Google into powerful business tools. In a sense, making it easy for developers to transform cartographic images into true location intelligence.

While there are advantages to comprehensive desktop applications, Web 2.0 does provide an environment where you can interact and modify and your map tile images instantly. So it's not surprising that the use of low-cost, web-generated imagery offered through Bing Maps (formerly Virtual Earth) and Google is common.

What's missing from Bing and Google? Two things. Your data and a powerful analytics engine. That's where SDKs comes into play. No matter how much you can accomplish in a browser, you need to do more if you want to make decisions that will advance your business.

Consider a retailer choosing a site for their next location. After you plot in your existing sites, you may want to overlay competitors, customers, market demographics, use SQL JOIN clauses, create buffers, run point-in-polygon analyses and more - that's where middleware and enterprise mapping comes in to play.

The right developer tools allow you to integrate your own data and conduct complex spatial analysts. A tile-based Rich Internet Application architecture ensures that map retrieval is fast, client side interactivity high, and server-side processing reduced. Designed for enterprise use, the tile-based approach provides for the navigation of sophisticated quantitative data in a consistent and intuitive manner - without sacrificing cartographic quality.

Tile servers are becoming increasing popular for web mapping because they allow the application to pre-render parts of the map and store them as images. The ability to combine web, proxy and private caches based on site and user needs provides developers with many options and possible configurations. In other words, with the right tools your favorite mapping applications can now do the heavy lifting needed to solve today's complex business challenges. If interested, you can learn more and download a free eval of the latest PBBI solution at http://www.pbinsight.com/welcome/mapxtreme7/

Posted by PBBI at 2:30 PM | Comments (0)

October 15, 2009

Holiday Trends Highlight Increased Role for Location Intelligence

Al Beery and Brian Hill

Over the next few months, consumers will head to the malls, superstores, and in increasing numbers, to their laptops - and retailers will be looking for any edge they can find to increase sales and margins during this holiday shopping season.

Given the sluggish economy, cost pressures and changing consumer behaviors, there has never been a better time to leverage Location Intelligence in your business. Retailers, manufacturers and shippers will find ways this year to move product to more people in smart, cost-effective ways by analyzing the relationship between distribution centers, retail sites, critical customer segments and household locations.

This is especially critical in light of expected shifts in customer behavior. The down economy means that many customers are buying less, they're more price-conscious, and they are more selective about what they buy. Many customers are also buying more online - increasing the role of logistics and fleet management,

Using location intelligence to chart how these trends are impacting your business is often the key to greater profitability. Better Location Intelligence can help you to:

• Better project performance of existing retail sites
• Determine optimal locations for new retail sites
• More effectively allocate marketing dollars
• Chart more efficient delivery routes
• Reassess distribution center locations in light of the increased proportion of direct-to-consumer shipping

In fact, companies that invest in top-quality location intelligence solutions often see positive ROI inside of six months. And many achieve a six-figure return on their investment within the year. Add in the intangibles - happier customers, happier delivery people, and happier customer service personnel - these all result from greater efficiencies, better communications, and better information sharing throughout your organization.

More information on how Location Intelligence and other data-quality improvements can enhance day-to-day and long-term business performance are available in our White Paper Special Delivery: Just-in-Time Savings or by speaking with your local PBBI representative at 800.327.8627 or via email at pbbi.sales@pb.com.

Posted by PBBI at 3:30 PM | Comments (0)

September 24, 2009

The impact of returned mail

By Cynthia Williams

This month, we interview Mike Cooper from Pitney Bowes Business Insight. Over the past year, Mike has met with organizations across the country, gaining first-hand insights on how returned mail can impact bottom line results.

Who should be concerned about return mail?
It's a problem that affects every organization. In the US, 2.5% of First-Class Mail is returned every month. In Canada, it can be as high as 4% - 5%. And we're talking about important customer communications, such as bills and checks.

It touches so many customers, why do these problems linger?
Most organizations we visit have traditionally looked at return mail from the perspective of the mail room. Mail is returned, corrected, resent. People calculate what it cost to resend mail then just assume it's a necessary cost of doing business. They assume that the mail room costs are the only impact.

But the impact goes beyond the mail room?
Absolutely. The bulk of the costs associated with returned mail are incurred outside the mailroom. The fact that returned mail impacts so many departments, though, can make it difficult to quantify. Five percent of incoming cash could be delayed for a month or longer, which has a huge impact on borrowing and cash flow. Call centers will spend $5 to $20 contacting customers by phone to follow-up on bills and checks that were never received. We've even uncovered insurance companies that were losing customers worth $500 sales because they simply lost contact with them. And these are just a few examples.

Given that it might take 40 days or more for the physical piece to actually be returned, it's a reoccurring problem, too. In many companies we've studied, nearly half of the returned mail had already been returned at least once before - but unless you make process changes, you just can't deal with the problem in a timely manner. In a large organization, the total cost or returned mail can quickly reach the mid-seven figures.

How can a company like Pitney Bowes Business Insight help?
With our expertise, we can investigate the problem of returned mail across departments and identify what improvements could provide the quickest financial gain for our clients. There are ways to shorten cycle times and reduce handling costs. These steps will lower the incidence of returned mail overall. After an investigation, we know enough to make specific process recommendations; and under our new business model, we will make those changes and guarantee our results.

What are some areas where improvements can be made?
First, you want to eliminate the physical handling of returned mail. It's slow, expensive and prone to error - so you need to understand which functions could be handled electronically. Secondly, the USPS offers a number of technologies that help organizations identify problems and deal with them sooner, and we help our clients leverage processes and technologies more effectively.

What advice would you give mailer today?
In many companies, the sheer size and scope of the returned mail problem can be daunting - and some use that as an excuse to avoid taking action. In actuality, given the budget pressures that everyone faces these days, the size and scope of this opportunity should be the reason why it should become a high priority initiative. Some companies have literally saved millions by addressing this head on.

If you are interested in learning more about how you can overcome the problems and costs associated with returned mail, contact your PBBI representative.

Posted by PBBI at 3:00 PM | Comments (0)

September 14, 2009

The Rx for healthy data

By Navin Sharma

Health care is certainly front and center in today's news. Without taking sides on the issues in Washington, I'd like to share some of the learning we've done at Pitney Bowes regarding health care - and how I think it relates to data and data quality.

Organizations - Pitney Bowes especially - define their employees as company assets; and they make major efforts to increase the value through productivity.

For example: Pitney Bowes makes a considerable investment in preventive healthcare for its employees, providing onsite monitoring and treatment for those with chronic conditions; and onsite care when employees are feeling under the weather. As a result, employees are better about getting the treatment they need: they start treatment sooner, and typically feel better sooner too. It's a win-win: employees benefit; and productivity improves.

Every corporate decision and operation has reliance on the underlying data. In other words, good quality data is as much an asset to the organization as a hard-working employee. It's time for businesses to recognize that data quality isn't a place to cut corners. In fact, by taking a page out of the healthcare book and performing good preventive maintenance on data and quick treatment when data-quality issues arise - data quality will be better, and productivity will increase.

A few weeks ago, we talked about how data governance is everybody's business. Just as employees stay healthier when it's easier to do so, we can expect that employees will do a better job of keeping data quality high if they recognize the value and find that its easy to do so. I think one of the challenges is to make the process of data governance meaningful and straightforward.

Join the conversation at http://ebs.pbbiblogs.com

Posted by PBBI at 11:15 AM | Comments (0)

September 8, 2009

When two worlds collide

By Steve Seabury

While the 2010 U.S. Census is still months away, a recent advance in data analytics demonstrates how amazing things can happen when customer and location intelligence comes together.

For years, real estate specialists and strategic planners have relied on spatial analysis to make decisions that required significant investments. The power of location intelligence proved invaluable on many fronts. The stability of neighborhood demographics enabled decision-makers to hone in on trends that could impact long-term profitability. The precise nature of geocoding provided for year-over-year consistency. Plus, the ability to visualize and map customers, prospects and competition against existing and planned sites let to key insights… insights that have enabled banks, retailers, utilities and many other industry executives to exceed expectations.

At the other end of the spectrum, marketers turned to household segmentation models. Robust demographic data at the household level could be used to create clusters—segments of consumers who shared similar lifestyles, characteristics and needs. This lifecycle approach made it easy to target the 'retired affluent', 'young families', 'single post-grads' and dozens of other key markets. And with records updated quarterly (or even more frequently), marketers could respond quickly to life events.

Now for the first time, these distinct approaches have been combined to deliver enhanced network performance management and customer analytics solutions. Using deeper, more precise demographic data, organizations can make more informed and timely decisions about critical real estate and marketing initiatives. These next generation demographic data tools incorporate advantages from both disciplines and can help organizations overcome today's top challenges, for example:

- Enables marketers and strategic planers to work from the same platform
- Compares changes in household make-up with neighborhood shifts to uncover pockets of opportunity
- Normalizes household data to block out the noise of short-term events to create more accurate projections
- Eliminates the need for ZIP Code targeting, which rarely reflect true neighborhood and lifecycle segments
- Links store network performance with customer relationship management strategies

Of course, creating the best of both worlds requires you to start with the best in both worlds. That's why Pitney Bowes Business Insight teamed up with the Gadberry Group and Acxiom Corporation and their PersonicX segmentation system.

These data sources compile consumer data from over 100 sources, including public records, the U.S. Census and self-reported data. Measurements for accuracy and completeness are part of a sophisticated multi-source build process where individual data attributes are compared across multiple providers. While mapping and analytic tools previously dealt with neighborhood and block-level data, these new tools drill down to race, ethnicity, gender, education, marital status, occupation, income and lifecycle on an individual household level.

In many ways, incorporating Gadberry and Acxiom data into PBBI predictive analytics models will enable organizations to bridge the gap between real estate decision-making and marketing strategy -- incorporating the best of both.

For more information on the newest technologies, visit http://go.pbinsight.com/household-derived-demographics.

Posted by PBBI at 3:15 PM | Comments (0)