Blog: William McKnight

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September 27, 2005

Customer Specific Pricing

Customer Specific Pricing (CSP) allows retailers to vary the price they charge their customers for the same products. I find it occurring more and more, especially in the online environment. Business intelligence is the prime enabler of this strategy. Many retail organizations are afraid of publishing the fact they do this, fearful of irritating the customer base. Most customers, even those on the receiving end of better pricing, would instinctively say they are opposed to CSP. It cuts against our grain somehow. But it shouldn’t necessarily. Retail has been doing forms of this for years.

CSP gets back to the retail organization’s business model. As long as discriminatory features are not used in its application, I believe it is the responsibility of each organization to set their focus point, short-term or long-term, and price accordingly by customer.

Know, however, that those customers who are attracted to your pricing deals may not be the most loyal. Which is precisely why some retail organizations have gone “CSP-lite” with variants such as customer specific warranties and shipping charge fees and options. Or, some do CSP with a “couponing” strategy, selectively offering coupons as opposed to handling CSP directly at the checkout. Speaking of coupons, my friend Neal Rapoport is the creator of www.dealtaker.com where internet offers and how to get them are continually posted. Check it out.

This requires sophistication. It requires a data warehouse with years of history data so that customer profiling can be done with real information. I have written about profiling strategies before, based on what I've done with some retail organizations implementing business intelligence. At the time, the use of the profiling was primarily determining whether to invest in a customer in the form of general marketing and customer service. Today, that model includes pricing.

If you have any thoughts about customer specific pricing, from either the “good business” or consumer perspective, please post them here.

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Microsoft and SMB

One of my assertions recently has been that the business intelligence industry is momentarily distracted by the high end deals. Recent titan acquisitons (Ascential, Siebel) are clearly focused on bringing in the Fortune level customer. We now see some balance being brought into the equation. Microsoft has never neglected the lower end BI customer. Actually, you could say they have not neglected the lower end anything customer.

Microsoft is "on the hunt for SMBs" according to a recent article.

As well, their SQL Server product has always had appeal to SMBs for business intelligence. SQL Server 2005 has a launch on November 7 in San Francisco. Every major city will have an event related to this launch. SQL Server should be released on or about that date. I have been analyzing SQL 2005 for business intelligence and will provide that analysis here at a later date. But I can say that I'm excited about the BI possibilities for SMBs.

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September 26, 2005

Orlando, here comes Business Intelligence

I was in Orlando last week for the Teradata Partners Conference. This was my fourth Partners and it is one extremely well done conference which reinforces the great customer satisfaction that Teradata clients have for Teradata technology. Teradata has always been a leader in terms of data warehousing best practices and that came across through its customer case examples and promotion of best practices in the sessions.

I gave a session on "Enabling Business Intelligence Across the Enterprise." It was designed for those numerous programs who have achieved some early returns on their BI program and have met first targets but find themselves challenged in getting beyond those targets. My goal was to enable the attendees with advice to convert prospective users to daily users of the warehouse, using examples from numerous programs I've worked on that have crossed that chasm.

I caught Marcus Buckingham's keynote on Wednesday and I'm glad I did as I am very interested in how people achieve success and this is exactly where he focuses. He gave a presentation on becoming an excellent leader (one who targets a clear, optimistic future) or an excellent manager (one who focuses on enhancing people's strengths).

In succession, the following conferences are in Orlando in the next 7 weeks: DCI (Sept. 26-29), TDWI and Business Objects Insight. If you're going to be at any of these conferences and would like to meet, please let me know.

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September 24, 2005

I don't know Mindy McCready

I've received few phone calls and emails about the William McKnight in the news. Though mostly coming from people who know better, I thought I'd say here that it's not me folks.

Reminds me of a similar happening in 2002, shortly after I moved away from the San Francisco area and many people still thought I lived there (I live in Texas now.) That wasn't me either.

This one is me. And hey, it's just about this blog, nothing as exciting as aggravated burglary of a country star.

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September 23, 2005

POS and SAP acquires Triversity musings

Whither the POS system. Retail has a broad range of POS systems deployed. Check out the varied POS systems you encounter in the next month. It is a very difficult process, especially for a large retailer, to make changes to their POS environment. It requires field work and is very disruptive. New POS systems typically are phased in and seldom reach 100% deployment.

I have been following and evaluating Triversity for some time now for my retail clients. Asked about a hot pick in an interview a couple of months ago, I mentioned them. This week, they announced they were being acquired by SAP. Triversity alleviates some of the pain associated with the POS rollout as well as adding some modern CRM functionality that interface to a data warehouse (DW). This is a hot pick with growth potential for SAP.

Here are some examples of modern POS functionality around interface to the DW or the usage of DW information:

POS interfaces to the DW - during a transaction, the POS system will collect a customer ID, perhaps by scanning a magnetic card, or by the cashier entering the customer phone number. It will send this ID to the DW and receive back a message containing customer data. From this message, the POS will retrieve customer eligibility data, in the form of a list of target groups. It will relate these groups to its own offer/segment mapping file, thus determining which offers the customer is entitled to. It will execute these offers if their criteria are satisfied.

POS will retrieve any messages directed at the customer, and print them at the end of the receipt.

POS will retrieve any continuity offer totals currently active. If spend within the transaction should trigger a continuity offer, its award will be given.

At the end of the transaction, POS will send a message to the DW indicating any updates which may have occurred within the transaction. This would include transaction spend, any contribution to continuity totals, and notification of any continuity awards.

When this message is sent, POS must wait for a positive acknowledgement before sending the next message. This process is normally done by a background process on the POS controller, to avoid impact on the POS terminal itself.

The Offer Management System performs Offer, Promotion definition, and campaign definition. It feeds the DW with customer/target grouping data, and the POS system with offer definitions and target group offer mapping.

The POS stream will be monitored for customers responding to offers and response information will be held.

It will be possible to target offers to specific customer target customers or household groups (of any size) at the POS.

Of course, to enable much of this functionality, the retail organization will need to track their customers through a frequent shopper program. Our wallets will be filling with more and more of these cards as time goes on - in order to enable this kind of functionality for the retail organizations.

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September 19, 2005

Should I go with proven technology or the best fit?

I was speaking with a sales associate in the BI vendor community recently. He had a sales experience where the client actually went with a technology that the client admitted was of a lesser fit and price/performance that his, but the comforts of selecting a bigger “name” vendor and how that name would look on the resume won out.

I call this the Resume Factor. Unlike the example above, the Resume Factor is usually subconscious and denied, but it comes into play when the person choosing the technology considers how the choice will have a positive impact on their resume.

Though I advocate that there are just a few reasonable business intelligence “frameworks” in the market to choose from today, some are newer than others and there is still serious movement happening as vendors joust to round out their complete BI set. From time to time, I'll review the frameworks here in the blog.

While the Resume factor can be consciously avoided, the real consideration is trying to determine what framework the product you are selecting will belong to, if you agree with it (i.e., philosophically, skill-set and system compatibility wise) and if that framework will be a winning framework.

Remember that today’s riskier vendor selection may be part of one of tomorrow’s frameworks, by virtue of acquisition or otherwise, that will lack needed market resources – and there you are, more marketable. There’s still a little room for this to happen, selectively, in the market.

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September 16, 2005

Cognos Launches Cognos 8

On Wednesday, Cognos announced Cognos 8 Business Intelligence.

BI has been focused very highly on the high-end, big-dollar deals, as evident by some of the titan mergers recently. However, many SMB needs are more basic than this. They would like a product that is easy to learn and also easy to use and manage.

The model of the BI software industry seems to be about delivering more and more complexity, making business harder instead of simpler.

Cognos 8 is a nice step towards something that reverses this direction and also provides a simplified approach for SMB. They have consolidated formerly separate Cognos products - ReportNet, PowerPlay, NoticeCast, Metrics Manager and DecisionStream ETL - into a single product on a single server built on a services-based architecture. And it's zero footprint.

I applaud this approach.

I also suggest this is further evidence of the standardization of business intelligence around a finite set of vendor frameworks.

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September 12, 2005

Oracle Agrees to buy Siebel

With the announcement that Oracle has agreed to buy Siebel today, Oracle will be no.1 in CRM solutions. I have spoke to several people this morning, including our Oracle expert and watcher Srini Sankar, about this acquisiton. We agree this clearly indicates that the CRM industry is going through major consolidation. In the last 18 months, Oracle has been checking off the list of companies to buy as it promised when it would was in court over the Peoplesoft acquisition. Here’s what Oracle has done:

1. Buys a majority stake in India's largest applications business, I-flex solutions Ltd
2. Buys Retail forecast software maker ProfitLogic
3. Purchased retail-software specialist Retek
4. Acquired Secure ID Software Provider Oblix
5. Acquired Peoplesoft
6. Acquired Context Media, a content integration company

To acquire Retek, Oracle went on a bidding war with SAP. This shows Oracle’s aggressiveness in acquisitions to position them as a leader in the industry. With these recent acquisitions it clearly indicates Oracle is pushing to be no.1 in the ERP suite market. None of these acquisitions have much to do with their stronghold database technologies. Their focus is on the Applications market. Oracle’s other targets could be:

1. Business Objects (BO)
2. BEA Systems
3. Hyperion Solutions

And the list goes on….

The acquisition of BO will be very fruitful and profitable for Oracle as it would advance their business intelligence analysis and query capabilities tremendously. The Discoverer tool looks up to BO in many categories. Similarly a BEA Systems purchase (tool Weblogic) would also be a key asset for Oracle’s growth as it would improve their Application Server technologies.

The game in enterprise software is to become attractive to Microsoft, Oracle, IBM or SAP.

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It's (still) about ease-of-use

A recent study by InformationWeek confirms that ease-of-use is still most important when purchasing BI software or selecting a vendor. This is well worth repeating since I still see many BI professionals, myself included at times, that get lulled into believing that modern data access tools are indeed "user friendly" to actual users.

Accoutrements to the development of the end user interface include training, metadata and data stewardship as well as effective usage design.

One company that brings us a new paradigm in data access for applications with a visual orientation is Tableau Software.

Tableau Software displays query results visually and graphically as opposed to displaying the actual results. This helps a user skip the step in his or her head that translate those numbers and text into something meaningful. It's a step where thoughts don't often complete and thought processes are abandoned. It could be useful for certain situations. You can take a product tour at their site.

Keep an eye on the real ease of use of your BI interface. The ones who make the final determination will be the users.

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September 9, 2005

Going "Around the Horn" with Business Intelligence

At DCI's Business Intelligence and Data Warehousing Conference Sept. 27-29 in Orlando: ,
I will be moderating the keynote panel on Sept. 28 entitled and modeled after the ESPN show "Around the Horn."

My 3 panelists will be Steve Pratt from FairIssac, Justin Lan from Data Management Group and John Williams from Collaborative Consulting.

I came up with this idea in an effort to "spice up" the boring panel format. I also didn't want any panelist dominating or getting off topic like I've experienced in the past so I wanted a hard and fast clock put on the answers. They'll be no dead time. This is an hour you can give in to attention span deprivation.

Here's how it will flow - after introductions, we will go through about 30 questions with each panelist having 30 seconds (or until they stop to catch a breath) for each response. So, you won't get the full day, or full hour, on any topic. Actually, you'll get a minute and a half plus my banter. Panelists will be SCORED on their answers by me and the winner will get a free minute with the audience at the end.

I've picked topics, and I have the panelists, to deliver a full fire-hose business intelligence what-you-need-to-know overview.

Here are some of the questions:
Are DW Appliances like Netezza and Datallegro worth consideration for large DWs today?
Will independent ETL vendors be able to remain independent or will the rush to all-in-one be overwhelming?
What is the role of Offshoring in business intelligence today?
Teradata recently announced its withdrawl from TPC submissions. Is TPC still relevant?
Are there too many BI vendors? How much of the herd needs to be culled?
What’s the one company in BI that you’d bet your kids on in the next 5 years?

If you have some ideas for questions, please let me know. We can still accommodate a few more.

I'm a little apprehensive about it since it hasn't been tried before. I thank DCI for the opportunity to try something new. I hope we get a good crowd and it goes over well. We will see... and I will let you know here.

Here is the Priority Code that will enable you to get a $400 discount off of the conference tuition of $1295: IEDTLSP.

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September 7, 2005

Business Objects in Business Week online

There is a nice high-level overview of business intelligence in this interview in Business Week online with Business Objects CEO Bernard Liautaud. It's always interesting to see how the major press picks up business intelligence issues as it is doing more and more these days.

This article brings to mind a couple of points. One is about industry consolidation. We have only seen the beginning of business intelligence consolidation. I believe Hyperion, Microstrategy, Cognos, Informatica and yes, Business Objects are in play to the current and future industry titans.

I don't see a mad rush for this consolidation to happen however. These companies are doing quite well and Hyperion, Informatica and Business Objects have recently (past 2 years) created full lifecycle stories of their own. BI is already big enough to support at least one $1B company (Business Objects.)

Furthermore, though there's some consolidation amongst the vendors, we are merely on the cusp of business intelligence penetration. Sure, every company has some business intelligence, but how many programs are as efficient and consolidated as they need to be? How many have figured out how to get past first targets and extend BI to the enterprise? How many have developed differentiating analytics that are tracked by BI? How many have the elusive "single version of the truth" - with clean data?

From my perspective, BI spending is strong and hardly being moved by the macro factors of high oil prices, rising interest rates and Katrina. There's an amazing number of new or revamping efforts happening in DW/BI. Budgets are certainly allocated to BI enough to make this a record year for BI.... as long as the budget spend is the natural follow-on to the budget allocation!

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September 4, 2005

RFID tagging the cows

In what may be a precursor of things to come, India is set to use RFID tags in its wandering cows (article). To my knowledge, this is the first use of RFIDs in anything living. However, almost daily we see new and creative uses of RFID popping up all over the place. As the tag price drops, expect more and more uses.

I completed my 3-part interview with Michael S. Shiff of RFIDRecruiters in this month's DM Review Magazine. The 3 parts are meant to overview RFID for the business intelligence professional.

In the articles, I mention a few points of interest:

A fairly recent RFID projection called for 20 billion RFID tags to be used in 2008

As 20 billion RFID tags work their way through supply chains and other business environments in 2008, with each tag reporting data on a real-time or near-real time basis, there will be a lot more information for data warehouse and business intelligence applications to manage.

Jim Crawford, an analyst at Retail Forward in Columbus, Ohio, calculates that if Wal-Mart stored every RFID of every tagged item on every shelf, it would generate nearly eight terabytes of data per day.

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September 2, 2005

Data Warehousing Appliances

By now, I'm sure you've heard about so-called Data Warehouse Appliances, or the vendors Netezza or Datallegro. We are at a point where there are many new and revamping DW/BI projects and I believe every DW/BI professional should understand these emerging technologies to determine if or when they may have a fit with requirements.

I just wanted to let you know that I'll be giving a webinar with B-EYE on the topic "Data Warehouse Appliances: Will they boost your BI capabilities and lower TCO?" on September 13 at 2:00 ET. You can sign up for it here.

I also have a recent white paper on the topic of data warehouse applicances available here.

If you find data warehouse appliances interesting and want to discuss further, give me a call. My company has a couple of offerings whereby we evaluate the appropriateness of data warehouse appliances to a given situation and we can run an appliance proof-of-concept.

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Coping with Katrina

Like most Americans, my thoughts these past few days frequently are with the people suffering through the Hurricane Katrina aftermath in New Orleans and the entire Gulf Coast. It's one of the most devastating natural disasters in American history and we are hurting right now.

I wanted to keep this blog a refuge from the nonstop coverage, but I simply cannot today. I have enjoyed New Orleans many times and this disaster makes me keenly aware that those of us reading (or writing) a blog today are indeed fortunate.

I encourage you to give money to help the relief efforts and give blood if you can.

If you have any friends or family that are a victim of Katrina in the business intelligence business that need re-location from New Orleans, let me know.

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