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  1. Customer Data Integration & Master Data Management Summit London 2006 13-14 July, London, UK Produced by : In Association with :

  2. CUSTOMER DATA INTEGRATION Trends & Strategies for 2006-07 Aaron Zornes Founder & Chief Research Officer The CDI Institute The-CDI-Institute.com a.k.a. tcdii.com

  3. How Many Analysts Does It Take To Change a Light Bulb? • Gartner analyst • “We feel that a new bulb is necessary & that the bulb will be replaced (0.99 probability) — we have a new service that addresses that issue” • Forrester/Giga analyst • “In 5 years, the new illumination technologies will replace what you currently have ... Wait” • Ovum/Aberdeen analyst • “We’ll write about the old bulb for $25,000” • IDC analyst • “There are 1,230,245 burnt-out bulbs in the world — for $2,500, we will tell you where they are ...” • Big Three consultant • “It’s time to re-engineer the sun ...” © 2006 The CDI Institute The-CDI-Institute.com

  4. About the CDI Institute Founded in 2004 Focused on CDI-MDM business drivers & technology challenges CDI Advisory Council™of fifty G5000 IT organizations with unlimited advice to key individuals, e.g. CTOs, CIOs, data architects CDI Business Council™ website access & email support to 3,000+ members CDI-MDM Road Map & Milestones™ semi-annual strategic planning assumptions CDI Alert™bi-weekly newsletter CDI Market Pulse™ monthly surveys Budgets, success/failure rates, mindshare of 250+ major in-flight CDI-MDM projects Examples: evaluation process for CDI SI, CDI ROI in Telco M&A, … CDI Fast Track™ One-day public & onsite workshop Fee-based & rotating quarterly through major North American, European, & Asia-Pacific metro areas Semi-annual CDI-MDM SUMMIT™ About Aaron Zornes Most quoted industry analyst authority on topics of CDI & MDM Founder & Chief Research Officer of the CDI Institute Conference chairman for DM Review’s CDI-MDM SUMMIT conference series Founded & ran META Group’s largest research practice for 14 years M.S. in Management Information Systems from University of Arizona “Independent, Authoritative, & Relevant” © 2006 The CDI Institute The-CDI-Institute.com

  5. CDI Institute Advisory Council Representative Members • Advisor agrees to provide Institute’s consultants with advice & insight regarding the use of CDI software & related CDI business processes at Advisor’s convenience • Advisor agrees to participate in at least one fifteen (15) minute survey teleconference call every sixty (60) days • Optionally, Advisor may respond to the bi-monthly survey request via email or Internet-based survey fulfilment • Results of such CDI market research surveys shall be aggregated by the Institute & made available to all Advisory Council members • In no case, shall any Advisor-specific survey information be made available to other parties unless Advisor has specifically agreed to the release of such information in writing • Bell Canada • Canadian Tyre • Caterpillar • Citizens Communications • COUNTRY Financials • Educational Testing Services • GE Healthcare • Honeywell • Intuit • MCI • McKesson • Microsoft • Motorola • National Australia Bank • Nationwide Insurance • Novartis • Roche Labs • Rogers Communications • Scholastic • SunTrust • Westpac • Weyerhaeuser Fifty organizations who receive unlimited CDI advice to key individuals, e.g. CTOs, CIOs, & CDI project leads © 2006 The CDI Institute The-CDI-Institute.com

  6. Recent CDI Alerts • Oracle Data Hubs: “The Emperor Has No Clothes?” • Subtitle: Considering Oracle’s Data Hubs? Then Consider This … • SAP Master Data Management “Extreme Make-Over” • Subtitle: SAP MDM went under the architect’s knife – Is the outcome attractive to Global 2000 enterprises? • IBM/DWL Customer Center: Strategy-Driven vs. Urgency-Driven M&A • Subtitle: Who’s Minding the Metadata? (Does the “new” IBM software business have a coherent strategy to integrate its treasure of acquisitions?) • Siebel CDI Assets to Help Oracle Battle IBM & SAP • Subtitle: How Many More Software Firms Must Oracle Buy to Catch Up with SAP? “Independent, Authoritative, & Relevant” © 2006 The CDI Institute The-CDI-Institute.com

  7. Customer Data Integration (CDI) Definition Aggregation Customer Master Files/DBs CDI Extract Enterprise Transform Application Load Integration (ETL) (EAI) Replication Synchronization • Comprised of solutions(processes & technologies) • Recognizing a customer & its relationships at any touch-point • Aggregating, managing & harmonizing accurate, up-to-date knowledge about that customer • Delivering it in an actionable form “just in time” to touch-points Historical CDI Solutions CDI is mandatory first step for most organizations on journey to enterprise master data management (MDM) © 2006 The CDI Institute The-CDI-Institute.com

  8. CDI-MDM Milestones Market maturation Market momentum Market consolidation Budgets/skills Data governance MDM convergence Architecture Data models Customer identification Master data delivery Analytics Business services/workflow Roadmap of key areas to invest in CDI – i.e., “What are the key differentiators of a next-generation CDI solution in 2006-07?” “CDI/MDM Milestones” are strategic planning assumptions to assist IT organizations & vendors in coping with flux & churn of the emerging CDI-MDM vendor landscape © 2006 The CDI Institute The-CDI-Institute.com

  9. Market Maturation • During 2005-06, the CDI-MDM market shifted gears from “early adopter” to “mainstream” as 95%+ of financial services, communications services, and pharmaceutical/life sciences enterprises actively look to replace homegrown CDI solutions • During 2006-07, CDI solutions will come to market for the midsize enterprise from Microsoft and Oracle plus the Data Quality vendors (Pitney Bowes, SAS/DataFlux, Trillium) • By 2008, the market for CDI-MDM solutions (software and services) will exceed US$1B © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

  10. CDI Market to Reach $1B by 2008 Source: The CDI Institute’s 1Q2005 MarketPulse™ survey of fifty large-scale CDI initiatives Systems integrators (Accenture, Alliance, BearingPoint, Cognizant, CSC, Lockheed Grumman, IBM BCS, Infosys, Unisys) Mega vendor CDI (Oracle Customer Data Hub, SAP Master Data Management, Siebel Universal Customer Master) Best-of-breed CDI (DWL Customer, Initiate Systems Identity Hub, Siperian Reference Manager) ETL (extract-transform-load vendors IBM/Ascential, Informatica, SAS) EAI (enterprise application integration vendors BEA, IBM, Tibco) NOTE 1 = Data service providers (Acxiom, Dun & Bradstreet, Experian, Harte-Hanks, IMS International) revenues not factored in. NOTE 2 = Data quality vendor (Ascential, FirstLogic, Innovative Systems, Pitney Bowes/Group 1, SAS/DataFlux, Trillium) revenues not factored in. © 2006 The CDI Institute The-CDI-Institute.com

  11. Market Momentum • During 2006-07, CDI software solutions such as I2, IBM/DWL, ORCL/SEBL, & SAP will monopolize the majority market share; concurrently, a niche market will arise for hosted CDI-MDM solutions led by early to market vendors Alliance Consulting and Unisys • Through 2007-8, both mega & niche CDI-MDM vendors will aggrandize the traditional master customer DB business of data service providers such as ACXM, DNB, & GUS/Experian • By 2008-09, every major application & database vendor will provide either native or OEMed CDI-MDM capability – including DOX, MSFT, CRM, & NCR/Teradata © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

  12. CDI Momentum It’s All About “Relationships” Panoramic Customer View 360 º Customer View Customer- Centric View CDI Master Customer Info File Universal Customer View Customer System of Record • March 2005 – CDI Institute’s MarketPulse™ forecasts market for CDI S/W & services to reach US$1 billion by 2008 • April 2005 – Gartner recognized importance of CDI with its first Magic Quadrant™ for CDI Hubs • June 2005 – Forrester released their Wave™ report on CDI • October 2005 – IDC’s W/W Market Forecast stated MDM market will grow to US$10.4 billion by 2009 • January 2006 – DM Review & CDI Institute along with 25 leading vendors launched CDI-MDM SUMMIT 2006 as largest expo dedicated to CDI, MDM, & DG 55% of G2000 are actively evaluating an enterprise CDI solution; 42% “in production” with custom-built solution, & 3% “in production” with vendor-based solution © 2006 The CDI Institute The-CDI-Institute.com

  13. Market Consolidation & Diversification • During 2006-07, mega IT vendors (IBM, Oracle, SAP) will continue marketing gyrations in moving to an enterprise MDM strategy • IBM (ASCL/CRSW/DWL/SRD/Trigo) & ORCL (iFlex/JDE/PSFT/SEBL) will wrestle with many of the same architectural/BPM/metadata/platform issues that forced SAP to withdraw its product from the market (SAP MDM/A2i xCat) • While mega IT vendors IBM, ORCL, & SAP will dominate in the CDI/MDM hub market, niche/best-of-breed vendors (I2, Initiate Systems, Kalido, Siperian) will thrive in specific industries & horizontal/corporate applications © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

  14. CDI/MDM Genealogy Data service providers (Acxiom, Experian) fail at software makeovers into CDI Oracle, SAP, Siebel introduce 3rd gen/hybrid CDI 1st gen CDI solutions arrive (IBM CIIS, Hogan CIF) 2nd gen CDI vendors merge to form 3rd gen CDI solutions (Initiate/Journee, Siperian/Delos) Mega vendors digest acquisitions Nascent EII vendors arrive & flop Pre-2001 2002 2003 2004 2005 2006 CDI early adopters drive requirements (Fin Svcs, High Tech Mfg, Pharma, Telco) ETL vendors add modest CDI extension & avow CDI capabilities App vendors launch EAI infrastructure (SAP NetWeaver, Siebel UAN) ‘Process Hubs’ trounce‘Data Hubs’; 4th gen ‘Full Spectrum’ hubs support structured & unstructured Mega app vendors roll out CDI (Oracle OCO, SAP MDM, Siebel UCM) ‘EIM’ as yet another TLA 3rd generation CDI solutions are based on service-oriented architecture (SOA) to hybridize aggregation, replication & synchronization to provide enterprise-wide CDI infrastructure © 2006 The CDI Institute The-CDI-Institute.com

  15. Budgets & Skills • During 2006-07, the typical Global 2000 size enterprise will budget/spend US$1.2M for CDI/MDM software solutions, with an additional US$4M for systems integration services • During 2007-08, CDI/MDM skill shortages will greatly inflame project costs as demand for data stewards, enterprise data architects, & other individuals with strong affinity for data governance will outstrip the market for individuals with actual experience; concurrently, systems integrators will fill the void in their classic style by baiting & switching senior veterans for junior rookies • By 2008-09, the market will have stabilized as enterprises react by training & protecting their own data governance staff with specific software product expertise © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

  16. Career Tracks Product Neutral Enterprise Data Architect, Enterprise Data Modeler Centres of Excellence, Data Steward, CDI Project Lead Product-Specific • Scarcity of “hands on” CDI experience exists • By 1H2006, 1,500+ product-specific consultants albeit with little “real world” experience with mainstay CDI solutions • Current shortage lends itself to same scenario of 5-10 years ago with SAP’s ABAP 4GL– i.e., inflated prices & resumes with many junior systems integrator (SI) staff spinning up to speed at client’s expense (a.k.a. “Androids”) Market for CDI- & MDM-related expertise will create major demand for corporate CDI positions during next 3-5 years © 2006 The CDI Institute The-CDI-Institute.com

  17. Data Governance • During 2006-07, data governance will become a mainstay of large scale CDI-MDM projects as RFPs increasingly mandate that component • Through 2007-08, major systems integrators & CDI/MDM boutiques will focus on productizing their data governance methodologies • By 2008-09, data stewards will be a common position both in IT organizations & businesses as enterprises formalize this function amidst increasing de facto & de jeure recognition of information as a corporate asset © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

  18. Working Definitions Customer Data Integration (CDI) Master Data Management (MDM) Processes & technologies for recognizing a customer & its relationships at any touch-point while aggregating, managing & harmonizing accurate, up-to-date knowledge about that customer to deliver it ‘just in time’ in an actionable form to touch-points. The authoritative, reliable foundation for data used across many applications & constituencies with the goal to provide a single view of the truth no matter where it lies. Data Governance (DG) Formal orchestration of people, process, & technology to enable an organization to leverage data as an enterprise asset. “84% of businesses surveyed believe that poor DG can cause: limited user acceptance, lower productivity, reduced business decision accuracy, & higher TCO © 2006 The CDI Institute The-CDI-Institute.com

  19. “Think MDM, Act CDI” • Data Governance • “Data Governance” is usually a generic term for an enterprise-wide data management initiative to manage how organizations permit & govern appropriate access to master data • This includes measuring operational risk & mitigating security exposures associated with access to data • For many companies, DG is part of an overall IT governance strategy & will cover all aspects of enterprise data • While much would be considered “customer data”, some is clearly not – e.g., product data & inventory data • “Customer Data Governance” is usually considered a subset of the overall Data Governance strategy for a company • Data Stewardship • Objective is to synchronize data collection processes, reduce data redundancy, & increase data accessibility, availability, & flexibility in a systematic manner CDI projects will focus on “customer data governance” & not necessarily all DG for an enterprise – if a robust IT governance or general DG strategy is in place, it will be easier to be successful at CDG © 2006 The CDI Institute The-CDI-Institute.com

  20. Why Data Governance? Why Now? • Businesses have been governing data for 20+ years, however, only a rare few are doing it well today • Many companies historically assigned DG to a data management group whose job is to integrate & manage data • Contemporary DG challenges are far greater • Break down functional stovepipes • Integrate processes across the enterprise – including corporate technology, all LOBs, functional areas & geographic regions • Engage all levels of management Based on recognition of issues at hand, an improving economy, & increasing regulatory requirements, businesses are now recognizing the opportunity to take a more strategic view of data governance © 2006 The CDI Institute The-CDI-Institute.com

  21. Why Data Governance? Why Now? – cont’d • Once you know what data is worth, you need to calculate probability for risk in a business processes • When you understand value of data & probability of risk, you can evaluate how much to spend to protect it, manage it, and invest in adequate controls • This is basis of modern underwriting – assets, risk, controls • Doing this systemically requires a combination of organizational structures, business processes, & technology – a “data governance blueprint” for: • Data quality • Information integration • Business intelligence IT management must work with business leadership to design & refine “future state” business processes associated with data governance commitments © 2006 The CDI Institute The-CDI-Institute.com

  22. Data Governance Juggernaut Data Governance Becoming“De Rigueur” Data Governance Must Become“De Facto” Data GovernanceWill Become “De Jure” Data Customer Master Warehouse  Data Integration  Data Management (Batch) (On-Line) (Just-in-Time) Enterprise risk management is emerging as a major issue within most financial institutions & is VERY data-centric © 2006 The CDI Institute The-CDI-Institute.com

  23. Demand for CDI-MDM Expertise Creates Major Opptys for Corp Positions Next 3-5 Yrs Data Quality Analyst CDI Project Lead Data Steward Enterprise Architect Data Warehouse  Customer Data Integration  Master Data Mgmt • Data Steward –Domain/business area expert responsible for quality of specific data entities for subset of enterprise customer data model; in large corporations, “data steward program manager” may exist who sets overall process & policy standards to formalize business’s overall data governance policy processes; additionally, “subject matter managers” may further divide responsibilities for metadata & master reference data (topologies, semantics, business metadata repository, etc.). • CDI Project Lead –Classical project manager with full lifecycle experience; experience with specific data model & SDK of specific CDI solution desirable; works with central IT group’s enterprise infrastructure team to define & implement business services related to customer data that comprise initial SOA efforts © 2006 The CDI Institute The-CDI-Institute.com

  24. Technical Maturity Level Source: February 2006 CDI Institute survey of 50 Global 5000 IT organizations • BASIC (“anarchy”) – App-centric approach; meets business needs only on project-specific basis • FOUNDATIONAL (“IT monarchy”) – Policy-driven standardization on technology & methods; common usage of tools & procedures across projects • ADVANCED (“business monarchy”) – Rationalized data with data & metadata actively shared in production across sources • DISTINCTIVE (“Federalist”) – SOA (modular components), integrated view of compliance requirements, formalized organization with defined roles & responsibilities, clearly defined metrics, iterative learning cycle Overall, FSPs are leading the way for non-FSPs © 2006 The CDI Institute The-CDI-Institute.com

  25. MDM Convergence • During 2006-07, customer & product data interdependencies will quickly broaden CDI requirements – i.e., from “customer” to “product” to “vendor” • During 2007-08, niche vendors will provide multi-hub connectivity (Kalido, Purisma, Siperian, Stratature) via hierarchical management extensions • By 2008-09, enterprises without an overall, long-term MDM strategy run the ironic risk of building “MDM silos” © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

  26. The CUSTOMER:PRODUCT Conundrum CUSTOMER Pricing Authorized Products Bundles Cross-Reference Hierarchies Geographical Variants Regional Variants PRODUCT • JIT, 21st century business models mandate both agility & integration across enterprise to provide higher profitability, reduce operations costs & increase accuracy of regulatory compliance • Contemporary supply chains mandate synergetic approach across both customer & product master systems via common business services • Key business drivers • Increased agility to deliver new product bundles/offers • Simplified PLM by automating key business policies to provide effective oversight & compliance • Reduced revenue leakage via consistent enforcement of offer policies re: provisioning & billing SOA mandates “Customer” + “Product” MDM – however, “customer” cannot simply be added as object to PIM products © 2006 The CDI Institute The-CDI-Institute.com

  27. Architecture • During 2006-07, Global 5000 enterprises will migrate en masse from custom-built customer data hubs onto commercial CDI-MDM solutions – primarily those of mega vendors IBM, Oracle/Siebel, & SAP • Through 2007-08, systems performance will remain problematic as enterprise infrastructure teams hedge between virtual, persisted & composite/hybrid hubs; applying point solutions such as EII middleware will help adjudicate both performance & political stalemates • By 2008-09, both market-leading enterprises & CDI-MDM vendors will have completed their transition from client/server to service-oriented architecture (SOA) by migrating from “data hubs” to “process/policy hubs”; concurrently, CDI-MDM requirements will drive vendors into 4th generation, full spectrum hubs (support for structured & unstructured info with extreme scalability) © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

  28. Most Common CDI Topologies “Composite (Hybrid Hub)” is architectural preference for 40% © 2006 The CDI Institute The-CDI-Institute.com

  29. Data Models • During 2006-07, mega CDI-MDM vendors (IBM, Oracle/Siebel, SAP) will continue to focus significant resources (R&D & marketing) on “industry content” aspect of data models which will force specialist CDI-MDM vendors to stay “data model lite” via specializations such as B2B hierarchy management & distributed CDI-MDM • By 2007-08, sophisticated hierarchy management will become a mainstay feature of all CDI-MDM vendors, yet support for metadata repositories to link mega vendors’ multitude of acquisitions will continue to lag significantly • Not until 2008-09, will mega CDI-MDM vendors have rewired software to fully support their strategic application infrastructure (Oracle Fusion, SAP NetWeaver, et al); concurrently, CDI-MDM vendors will migrated from data model-centric architecture to process model centricity © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

  30. Master Data Delivery • During 2005-06, EAI / EII / ETL vendors scurried to either add persistence to their products or align themselves with CDI-MDM vendors as a complimentary role by enabling customer data hubs to interweave data from multiple diverse master sources with master data persisted in a central hub • Through 2006-07, these vendors will thrive by providing increased throughput and additional repurposing & publishing capabilities to classical CDI-MDM solutions • By 2007-08, EAI / EII / ETL middleware will have been fully assimilated into broader CDI-MDM vendor community via M&A © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

  31. Industry-Specific CDI Requirements • Financial services providers (FSPs) • Communications services providers (CSPs) • Life sciences / pharmaceutical • Government • Healthcare • High-technology manufacturing (t.b.d) • Manufacturing (discrete, process) • Retail (t.b.d) • Hospitality (t.b.d) Early adopters of CDI solutions include: FSPs, CSPs, Pharma & High-Tech Manufacturing © 2006 The CDI Institute The-CDI-Institute.com

  32. Why are Market-Leading FSPs Adopting CDI? • Optimize customer profitability • Increase operational efficiencies • Enhance regulatory compliance • Improve overall BI • Deliver ROI on CRM initiatives • Provide “infrastructure rationalization” • Facilitate growth-by-M&A FSPs must transform from customer-hostile, batch business model to give customers actionable 360º view in “near real time” © 2006 The CDI Institute The-CDI-Institute.com

  33. Banking CDI Requirements Facilitate growth-by-M&A Comply with privacy mandates Improve compliance – e.g., AML, BXA, CIP 326, OFAC, SOX, … Increase sales productivity by modeling corporate hierarchies & structures of B2B customers Improve real-time portfolio view for both wealth management & internal risk management Increase customer satisfaction (retention/upsell) by streamlining routine customer maintenance Reduce IT infrastructure costs Increasingly complex business models (B2B2C) as “electronic storefronts” Demand for “near real-time” data lineage Rationalizing complex & dynamic business & individual hierarchies Hacker-proof customer data protection High-RAS (reliability, availability, scalability) nature of mission-critical infrastructure Business Drivers Technology Challenges BXA - Bureau of Export Administration CIP 326 – Customer ID Program of USA PATRIOT Act OFAC - Office of Foreign Assets Control Customer view must prevail over product view as higher margin customers dictate common set of products & services via rapid adoption of CDI © 2006 The CDI Institute The-CDI-Institute.com

  34. Retail Banking – Business Objectives • Provide single view of customer • Across all channels • Across all products • Reduce operational costs • Improve cross-selling • Improve net credit loss • Increase marketing lift • Manage privacy centrally • Provide operational view for Basel II compliance • Provide improved customer service • Streamline account opening process © 2006 The CDI Institute The-CDI-Institute.com

  35. Retail Banking – Technical Requirements • Proven performance & scalability • Service-oriented architecture • Ability to handle complex hierarchies • Ability to integrate to existing infrastructure • Open architecture – J2EE compliant • Proven functionality for services layer • Existing CIF co-existence & eventual replacement strategy © 2006 The CDI Institute The-CDI-Institute.com

  36. Retail Bank – CDI Solution Architecture ATM Web Self- service VRU Telemarketing Call Center Branch Kiosk Personal Banker Front Office Customer Customer Customer Customer Customer Customer Customer Customer Application Server CDI Hub Data Integration EAI EII ETL RDBMS Server Credit Cards Wealth Management Consumer Deposits Customer Recognition Vendor Data Marts Data Warehouse Customer Customer Customer Customer Data Marts Back Office © 2006 The CDI Institute The-CDI-Institute.com

  37. Retail Banking – Key Drivers • Improve cross-selling & campaign lift • “Operationalize” marketing data • Leverage service interactions into sales opptys by following up on current campaigns • Regulatory compliance • Providing operational view of customer into existing data warehouse for Basel II compliance • Ability to store privacy preferences at a true enterprise level © 2006 The CDI Institute The-CDI-Institute.com

  38. Retail Banking – Business Outcomes • Ability to act on customer knowledge • Improved customer matching for customers with multiple risk-bearing products & improved benefits obtained from risk management • Risk scoring improvements – better collections decisions • Able to reduce costs based on reducing maintenance costs of legacy CIFs • Improved accuracy & completeness of the customer data within CDI hub vs. existing CIFs (96% vs. 85%) • Administrative cost reduction © 2006 The CDI Institute The-CDI-Institute.com

  39. Banking CDI Scorecard:“Top 5” Business Drivers & Technology Challenges © 2006 The CDI Institute The-CDI-Institute.com

  40. Key Business Benefits for FSP of “Product Information Pipeline” • Enhanced client reporting • Improved timeliness • Improved depth of product information (consultant support, consultant RFI responses, RFPs, fund fact sheets) • Enhanced customer servicing via e-channel management • Improved revenue generation opportunities • Enhanced executive mgmt transparency into risk mgmt (sales pipeline info) • Increased efficiency within Global Distribution functions (removing duplicated business processes, & improving speed & accuracy of key activities) • Improved business retention rates across global markets, product segments & business channels PIP is complement of CDI by employing same technologies centered around “product” – much more than CRM is required © 2006 The CDI Institute The-CDI-Institute.com

  41. Case Study: Major North American Bank Near term = cross-selling across product lines Longer term = customer service & retention Huge diversity of financial product lines Scalability of complex business model 10M+ retail consumer accounts 3K+ bank branches; 1K+ mortgage ctrs 25K+ internal users Custom-built CDI not keeping pace with market evolution Delivered workflow-based employee portal to integrate SFA, DW, BI, customer profitability, & loan pricing/approval applications Built on existing portal & message bus by incorporating new CDI technologies in R/T customer identification & data reconciliation plus cross-application process integration Coordinated multi-channel campaign mgmt, channel optimization, & advanced analytics Business Issues Technology Solution Increased cross-sell revenue by US$700M across sales, marketing, & portfolio mgmt — reducing underperforming assets by US$12B © 2006 The CDI Institute The-CDI-Institute.com

  42. Credit Card Issuer CDI Requirements Aggregation within industry – exacerbated by big commercial banks emulating major monolines Heavy reliance upon direct mail marketing – & inherent increased fraud risk Improve compliance – e.g., AML, BXA, CIP 326, OFAC, SOX, … Support future business objectives – e.g., M&A Ensure consistent customer service across all channels Private label cards needing lifestyle event-based differentiation Reduce IT infrastructure costs Integration of new & old channels – e.g., collections, fraud, contact centre with kiosk, ATM, IVR & online self-service Contingency planning for future technologies – e.g., biometrics, smartcards, etc. Complex hierarchy mgmt – e.g., household-level risk mgmt Scalability – e.g, ability to integrate new block of customers Infrastructure costs of integrating new data sources & channels Business Drivers Technology Challenges Challenge is to move to portfolio-level integration despite the politics & technology inertia © 2006 The CDI Institute The-CDI-Institute.com

  43. Credit Card Issuer CDI Scorecard: “Top 5” Business Drivers & Technology Challenges © 2006 The CDI Institute The-CDI-Institute.com

  44. Case Study: Major U.S. Credit Card Issuer Reduce net credit loss Increase customer base Support M&A-based growth strategy Centralize privacy preferences management Reduce contact centre costs by providing “once and done” customer data management Ensure consistent customer service across all channels Deployed hybrid CDI hub — vs. front-end solution, data warehouse, or customer info file Integrated marketing campaign system to increase responses & increase customer base Managed privacy contact preferences in single location & provided to all channels — e.g., telemarketing, direct marketing, call centre, etc. Invested in strategic “SOA architecture” leveraged across entire enterprise Business Issues Technology Solution Achieved competitive advantage in operational excellence over nearest competitors — “M&A ready” © 2006 The CDI Institute The-CDI-Institute.com

  45. Insurance CDI Requirements Facilitate growth-by-M&A Comply with privacy mandates Increase deep understanding of data quality & reliability issues related to claims & fraud Embrace frequent regulation & de-regulation cycles – e.g., HIPAA, NPI Accommodate growing technical patchwork of proposed legislation – e.g., NHIN Reduce IT infrastructure costs Expand use of incumbent application systems (e.g., CRM) via enterprise customer identity service (universal key) across all applications Increase flexibility to add new channels, data sources, touch points, etc. via SOA High-RAS (reliability, availability, scalability) nature of mission-critical infrastructure Hacker-proof customer data protection Business Drivers Technology Challenges HIPAA - Health Insurance Portability & Accountability Act NHIN - National Health Identification Number NPI - National Provider Identifier Insurers need to move to “high touch” service model wherein near real-time channel integration is critical © 2006 The CDI Institute The-CDI-Institute.com

  46. Insurance CDI Scorecard: “Top 5” Business Drivers & Technology Challenges © 2006 The CDI Institute The-CDI-Institute.com

  47. Case Study: Major North American Insurer Increase quality of service via 360° customer view to support end-to-end, seamless business processes for call centres, claims processing, etc. Scalability of complex business model 5M+ policies 2M+ “customers” 3.5K+ agents 10K+ internal users Custom-built CDI not keeping pace with market evolution Selected “Buy” over “Build” of CIS extensions High performance identity management Extensible data model Support for complex hierarchies Data steward capabilities Faster time to market Lowest total cost of ownership Pioneered “chief customer officer” & “data steward” programs to drive design of core processes to focus on cross-enterprise customer view Business Issues Technology Solution “Go live” 3X faster & 4X cheaper for “Buy vs. Build”(US$50M over 5 years) © 2006 The CDI Institute The-CDI-Institute.com

  48. Top 5 Vendors’ Mindshare within Financial Svcs © 2006 The CDI Institute The-CDI-Institute.com

  49. Communications Services Provider Requirements Consolidation (M&A) Deregulation/re-regulation Increasingly "portable" customers Self-directed service to drive down customer care costs Real-time marketing & integrated campaign management using predictive analytics Fraud detection Bill presentation Ability to blend channels Complex supply chains Onerous regulatory mandates Extreme scalability in call centres, provisioning, etc. Flood of data due to ‘data services’ “Plan anywhere, build anywhere” investment strategies in new technologies that enable quicker new product introduction (NPI) at lower cost without sacrificing quality Business Drivers Technology Challenges Telco evolution will be radical as intense competition in wireless, LD, Internet, & local service commoditizes products & slashes profits – not to mention VoIP © 2006 The CDI Institute The-CDI-Institute.com

  50. Top 5 CDI Vendors’ Mindshare within Telco © 2006 The CDI Institute The-CDI-Institute.com