Blog: Claudia Imhoff

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August 31, 2005

Best BI Blog Awards

OK -- here is your chance to let me know how you really feel about this blog. SearchCRM.com is holding a contest to find the most outstanding and popular blogs in the CRM and BI markets. Anyone can nominate a blog, but it must be on the topic of CRM, BI or a related field, and it must be maintained on a regular and consistent basis. Be sure to get your nomination in by September 30. To nominate a blog, click here.

Thanks for reading -- and voting!

Yours in BI Success,

Claudia

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August 25, 2005

Microsoft Wants to Keep Track of Your Packages

Microsoft is getting into the package tracking and delivery business. Yes, the mighty software company has partnered with hardware vendors to create its own version of the RFID (Radio Frequency Identifier). Today they are offering it to post offices throughout the world but who knows where they will go tomorrow...

The technology allows a postal service, the package sender and the receiver to view precisely where a package is at any time. Currently most of the big package senders, Fed Ex, UPS, DHL, have services similar to this.

Microsoft's technology goes further though in terms of its ability to personalize package delivery. Their RFID chip has the ability to send out notifications to the receiver indicating when the package will arrive. It can even send out alerts to senders via MSN Messenger or your mobile phone that the package has been signed for at its destination. The chip can hold much more information than a bar code that is used today by other carriers.

Microsoft has combined its software with hardware from partners like Texas Instruments to come up with a RFID tag that is about the size of a playing card. The card has a sticker on one side to hold it onto the package and contains information about the package's contents, the sender, receiver, destination, etc. This information helps not only to track the package but can also be used to make the mailing process more efficient by telling other electronic devices -- like sorting machines -- where the package should be sent.

I can see a future where the RFID not only directs its own shipment but could even relay back to the postal service if its machines were not performing correctly. "Yo dude, your sorting machine just ate my packaging..."

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August 23, 2005

Disloyalty Amongst the CRM Vendors' Customers

Here's one for ya -- vendors that supply CRM software to US companies wishing to improve their customers' loyalty have the lowest percentage of loyalty amongst those very companies when compared to other software segments. Ouch! So says a new report from Walker Information...

According to an article from destinationCRM, only 52% of US customers stated that they wanted to continue the relationship with their CRM software providers. Compare this to enterprise software providers who had the highest loyalty percentage of 59%.

US CRM software providers scored high in another area (not good either) -- they had the highest percentage (22%) of high-risk customers. These are customers who have a low commitment and low intention of furthering the relationship with their current vendors. Twenty-one percent of customers surveyed felt "trapped". Look out, CRM providers -- if given a viable alternative, your customers will likely defect.

Why, you ask? Well, here are just a few of the factors contributing to these dismal statistics:

-- Total cost of ownership
-- Product quality
-- Reliability
-- Ease of use

Among the CRM software providers examined, Microsoft came out the only winner have earned the loyalty leader distinction in the US. Sixty-three percent of its US customers are truly loyal - congratulations to them! By comparison, SAP only had 48% of its customers deemed truly loyal.

According to Phillip Bounsall, EVP at Walker, "The line of thinking is -- If you were more customer friendly and you were more focused on me, you would be making products that are more what I want, that are easier for me to use, and that are reliable for me".

Gee, isn't this the very selling line from the CRM software vendors to their customers on why THEY should buy their CRM applications? Maybe these providers should use their own software to understand their customers better...

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August 19, 2005

And a Good Time Was Had by All at TDWI...

This week the Data Warehousing Institute held their Summer conference in lovely San Diego, CA. The theme this time around was bringing the business and IT organizations together. The attendees, vendors and presenters alike learned a great deal about how to do this. In addition, I tried my hand at pod casting... Read on to find out more.

TDWI's education director, Dave Wells, started the show off Monday morning with a keynote address concerning building the critical business and IT relationships so necessary for a successful BI environment. This was followed by an entire track dealing with forming and maintaining the business-IT relationships in support of BI initiatives.

In my own track -- Six Steps to Building a Successful Corporate Information Factory -- we discussed the need to recognize that a BI environment must be governed as a program not as a series of loosely related projects. We discussed the need for business sponsors, a steering committee (or as one of my attendees put it - a "Clarity Counsel"), and business involvement in the design and ultimate rollout of the final deliverable. This was in addition to the normal project management activities used to construct the CIF.

Then I got to do a really fun thing -- I interviewed a whole slew of vendors attending the conference for around ten minutes each. These mini-interviews were then made available as pod casts by the wizardry of Shawn Rogers. Not sure what a pod cast is? Think it has something to do with aliens invading human bodies? Well, so did I until this week. Now I am - like - so savvy, dude.

Pod casts are audio vignettes that you can download to your iPod or other MP3 player and listen to at your leisure. Just click here to see the list of available pod casts done live from TDWI! You will learn as I did all about what TDWI is up to from Wayne Eckerson, the real story to Microsoft's SQL Server launch, and what's new at FirstLogic, IBM, Cognos, Teradata, ProClarity, SAP, Trillium, QlikTech, CSI, and RightOrder. I hope you find these interesting and entertaining! I sure had fun doing them. Look for more at the next TDWI conference in November.

Until then --

Yours in BI success,

Claudia

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August 17, 2005

Capitalizing the Data Warehouse and Making it a Real Asset!

I attended a most interesting “night school” at the Data Warehousing Institute’s conference this week in San Diego. It was taught by Sid Adelman and dealt with the new accounting requirements that companies assign a “fair value” to their data warehouses and BI environments. Read on about this controversial and confusing new accounting practice.

Did you know that you and your accountants must put a fair value upon your data warehousing environment that includes not only the software and hardware but the intangible value it brings to your company (better decisions, timely reporting, quality data, etc.)? Yes, it is true. The new FASB (Financial Accounting Standards Board) rules requiring that data warehouses show up on your balance sheet as an asset will kick in fully in 2006. At that time, it becomes “the law” to record the full value of this critical company asset just as you just record the value of your inventory, capital assets such as buildings, financial assets, and so on.

Yikes! Where do you begin to estimate (yes – it is a statistical estimate at best) the asset value of BI? The key is to determine the future value of the data warehouse and be able to express that in today’s dollars. According to FASB, “Assets are probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events” (FASB Concept Statement No. 6).

Let’s start with the easy stuff – you know with relative accuracy the cost of the hardware and software, consulting and contracting resources costs, and employee costs (the number of hours they worked on creating the BI components times their loaded hourly rate). These are “hard” dollars that you spent on the construction of the data warehouse and its associated marts or applications.

But what about the other benefits of the warehouse that are not so easily valued? These include such things as the benefits garnered from its usage like lowered costs or expenses, better marketing of your customers, more productivity from analysts, reduced fraud, better quality data for decision making, etc. How do you put a fair value estimate on these?

Other considerations are the data quality improvements, meta data, data models, enhancements to the warehouse, value of integrated data, the performance and availability capabilities. Each of these increases the fair value of this asset. Note though that poor data quality is just as important in decreasing the value of the warehouse!

Note – some things cannot be capitalized and must be expensed. These include maintenance costs, training, ongoing administration and support, the cost of the help desk and – significantly – a failed data warehouse project!

And, as if that were not a big enough headache, you or your accountants must determine the useful life of the warehouse. This is the time frame that will be used to amortization this asset. Do you amortize it over three years? Five years? Perhaps ten?

For more information on this subject, read Sid Adelman’s complete article entitled "Capitalizing the Data Warehouse".

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August 11, 2005

IT Job Prospects: The Best of Times or the Worst?

I recently read two very opposing articles regarding IT hiring. One was an InformationWeek article on a report from Robert Half Technology that was incredibly optimistic about the hiring plans of CIOs. This article claims these plans were at the highest levels in three years. The other article appearing on the exact same date in the exact same magazine (InformationWeek) claimed that Gartner Inc. research predicts all is doom and gloom and that the demand for IT workers is in fact shrinking. Seems to me that InformationWeek is getting really mixed signals... In any case, you decide which report you believe -- then let me know, OK?

Let’s start with the good news. According to the Robert Half report, 14 of the CIOs polled expect to add IT staff in third quarter of this year and only 3% expect cutbacks. That’s a net gain of 11% and is the most optimistic hiring expectation from CIOs since third quarter 2002.

It appears the hiring binge is regional. If you live in New England, life is really looking up. Twenty-four percent of the CIOs from New England plan to increase their hiring. The report reports this is possibly due to the recent expansions in the biotech industry in that part of the US. The south central states come in second with 20% of CIOs planning to add staff. Good for you, Arkansas, Louisiana, Oklahoma and Texas.

So, you ask, what sorts of IT job skills are in the most demand? Glad you asked. The report states that a whopping 77% of respondents say the highest demand skill is for Microsoft Windows administration (Windows NT, 2000 and XP). Over half said that SQL Server management skills are also in great demand. Almost half said they need wireless network management skills. I could sure use some of that skill at our office!

OK – now for the negative report. Gartner reports in a sister Information Week article that offshore outsourcing is sending thousands of once-desirable IT jobs overseas. They believe (with some percentage of probability, no doubt) that 15% of tech workers will drop out of IT by 2010 – just 5 years from now – mostly because they either can’t get jobs or can get more money or job satisfaction elsewhere. They also predict that worldwide demand for technology developers (apparently even in those countries receiving the outsourcing jobs) will shrink by another stunning 30%.

Gartner further affirms that most people associated with corporate IT departments will move into more line-of-business or “business facing” roles, focusing more on corporate strategy than on technologies and algorithms. Perhaps not a bad move for BI as long as there is still the infrastructure (read that as a data warehouse) in place to stop chaos from occurring.

According to Diane Morello, Gartner’s VP of research, “Employers are starting to want versatilists – people with deep experience with enterprise-wide applications and can parlay it into some larger cross-company projects out there”. So those of you working in enterprise BI environments, guess what? You will be worth gold to your employer!

Given that outsourcing is here to stay, the article goes on to say that Stanford career specialists are suggesting to their IT students that they develop foreign language skills in addition to the technical ones. These will be needed to land jobs as cross-cultural project managers – a position that may become highly desirable and rare in the very near future.

Hmm, sure seems like two very opposite views of the same market...

As always, I look forward to your comments…

Yours in BI success.

Claudia.

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August 9, 2005

BI Listed as a Top Priority in Corporations for the Next Few Years!

A recent InfoWorld Research Report on Business Intelligence gave very high marks to the use and adoption of BI among its readers. The results found that nearly two-thirds of respondents rated BI as high-to-critical priority for the next few years. This certainly bodes very well for BI in corporations worldwide but there were a few dark clouds looming too. Here are some of the results from the survey.

According to the report, spending on business intelligence software is now more than $8 billion and growing by more than $200 million per year. Given that, it becomes really important to understand what BI features are important to customers and prospects, what business requirements are satisfied with BI implementations, and what hurdles still remain to implementations. Here are some highlights from the report:

Almost half of the respondents already have implemented BI solutions and another quarter are actively evaluating the solutions available today. Vendors, this is good news for you because most seem to be evaluating BI packages.

What features are important? The most important was the ability to drill down into more detailed information with 78% of the respondents rating it as highly important. Sorting and filtering was next in line. Next came a consistent user interface. This has become increasingly important over the years as more and more novice or non-technical business people join the ranks of BI users.

Another feature that was highly sought after was the ability to visualize data. Again with new or novice users, the ability to access and understand massive amounts of data means that visualization becomes a critical component. This goes way beyond the old “ease of use” requirement, doesn't it?

When asked what drove the respondents to build a BI environment, the number one reason was to achieve better quality data. IMHO, compliance is starting to have a significant impact on our BI implementations. This response should certainly make the data quality vendors like FirstLogic, Ascential (now IBM), DataFlux, DataLever, etc., happy!

Other reasons cited for their BI implementations were the need to integrate BI software into their existing infrastructure (perhaps to better do BPM or OPM?), and a third said their BI environment was created for security and user rights management – an interesting utilization for BI…

So – what is holding back the growth of BI in corporations? No surprise here – MONEY. Almost half of the respondents said budget constraints are limiting their ability to roll out BI. CEOs and CFOs – listen up! Loosen up the purse strings and get these critical projects their funding. Obviously you think you need BI so put your money where your requirements are!

Another constraint was the time it takes to implement a BI project. Even though most projects take less than a year to reach production-ready states, it appears that this timeframe is still not fast enough. I hope the demand for BI does not cause project managers to cut corners by cutting out those parts of the architecture needed for sustainability and maintainability – like going straight to the mart and bypassing the warehouse. This shortsightedness will only cripple your BI effort in the long run.

The last constraint mentioned was the user interface – again. More than a third of the respondents said the UI in their current BI solution is not appropriate for all potential users. More than half of the respondents wanted a UI that more resembled a simple search browser. I think this gets back to the changing demographic of BI users to the less technically-oriented ones. It appears that those BI vendors such as SAS and Microsoft who offer a full suite of BI offerings (running the gamut from simple querying and reporting to multi-dimensional analysis to advanced predictive and mining capabilities), all the while maintaining a consistent and simple user interface, may be the winners in the long run.

While these constraints may slow down BI adoption, the good news is that almost half of the InfoWorld respondents stated that their companies will spend MORE on BI next year, and a whopping 70% expect their business user base to increase. What this says to me is that despite a shaky economy, some less than successful implementations here and there, BI on the whole is meeting and actually satisfying a significant business need. Congratulations to all you BI Project Managers. Keep up the good work!

Yours in BI success!

Claudia

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August 3, 2005

Scott Humphrey Does It Again!

There is nothing like floating down a magnificent river in scenic southern Oregon to stimulate good discussions about Business Intelligence...

That's right. I said floating down a river. For the fourth year, Scott Humphrey , the founder and sponsor of the Pacific Northwest BI Summit, treated a number of innovative BI vendors and four leading BI experts to a highly stimulating and memorable weekend. Continue on to read what we talked about.

Scott designed the Pacific Northwest Business Intelligence Summit to "combine a stimulating exchange of ideas about key issues in the data warehousing, business intelligence and CRM sectors with equally stimulating opportunities for networking with true industry influencers. The setting is relaxed, the sessions are intimate, the
activities exhilarating, the scenery literally breathtaking."

The vendors were FirstLogic, Microsoft, Purisma, Celequest, DATAllegro, Informatica, and Teradata. The media was well represented by Ron Powell, B-EYE-Network, and David Stodder, Intelligent Enterprise, who also served as our moderator. The industry leaders were Colin White, BI Research, Jill Dyche, Baseline Consulting, William McKnight, CSI Consulting, and yours truly, Intelligent Solutions.

Indeed, it lives up to every bit of its billing. Here's what we discussed:

First up was Colin White. His topic dealt with data integration which included the techniques and technologies (e.g., EAI, EII, and ETL) available today. He discussed the preliminary research for his upcoming white paper. The three top issues so far are data quality, inadequate funding, and poor data integration infrastructure. The good news is that funding for data integration is increasing and more and more companies are forming centers of competency to handle this thorny issue.

I was next and my topic was data stewardship. There has been much written about this topic but companies today are still struggling with how to get the function funded, staffed and authorized to make the changes necessary to ensure the quality and consistency of this important corporate asset. It was agreed that data stewardship will not be successful without proper (and vocal) executive support, the authority to change the way the business does business, and not only responsibility for the data but also for those business processes that handle the data.

We then took a break for the rest of the first day to try our hands at kayaking down the Rogue RIver. What a spectacular natural beauty! And I am proud to say that we all made it down in one piece and I only fell out once...

The next day, William McKnight started us off with a lively discourse on Master Data Management (MDM). We talked about leading vendors in this space, how it was perhaps an outgrowth of the older reference data management, hopefully with more success this time around. MDM more often than not starts within a BI project but must move into a more enterprise-wide status. MDM is useful for just about any application or system within the enterprise.

Jill Dyche finished up the morning with another timely topic - Customer Data Integration (CDI). She described how there are two ways approaches to a CDI project: top down -- starting with an enterprise-wide effort and bottom up -- from application orientation. We discussed the idea that perhaps CDI was a subset of overall MDM initiative.

We finished the morning with a discussion of unstructured data and the state of meta data. For unstructured data, we covered its architecture, technological support available today, and how it can be combined with the structured data found in the data warehouse. For meta data, we discussed the current state of technological support for it Unfortunately, there is still not an enterprise-wide mechanism to handle all forms and sources of meta data. Parts of meta data are supported in ETL products and some data quality products.

OK -- that was enough work for the morning. We then spent the afternoon watching a charming and very funny play in Ashland, OR. The evenings were spent eating fabulous food prepared by the Weasku Inn's staff and continuing our discussions from the morning. By the way, Weasku is not a foreign word -- just spread out the name out to We-ask-u Inn. Cute, huh?

Now that is what I call a conference! Thanks, Scott, for putting together such an interesting group of people in a stunning location and topping it off with exciting and fun activities. My hat is off to you!

Yours in BI success,

Claudia

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