In Living Color

The need to manage customer interactions in real time is a driving force behind the "new" CRM

By Mark M. Davydov

ONE OF A KIND

These integrated technical services help reduce IIM time to delivery and cost of ownership An integrated development environment (IDE) supporting various programming models (HTML, XML, Java, ActiveX, HDML, DHTML, Cascading Style Sheets, Java Script, VB Script, and so on) via a universal editor or best-of-breed tools Universal database access to major databases and ODBC/JDBC support via native or third-party drivers Security services supporting SSL, SHTTP, socket communication, LDAP, auto message encryption, and an API for custom-built security features Application isolation features that maximize portability by accommodating standalone Java applications, Servlets, JavaBeans, NSAPI, ISAPI, WAI & WAP, and traditional C/C++ options Dynamic load balancing, to efficiently exploit CPU resources as IIM engines automatically scale to meet peak loads State management for fault tolerance and global interaction integrity with application, session, user, object, and string state management via an independent state server that eliminates scalability problems SNMP integration that incorporates system management utilities via SNMP messaging User profiling services for gathering customer information and categorizing profiles Interaction monitoring for monitoring the status of interaction sessions with the customer Personalized content syndication for enabling customizable colors, schemes, and other major publishing functions.

We can all agree that the Internet has evolved out of the early adopter phase. Instead of simply publishing static information on the Web, most organizations are now focusing on solutions that will help them profit from Web-based transactions. Two main approaches are possible here: profiting explicitly, by making online sales; and profiting implicitly, by creating e-marketplaces for buyers and sellers to meet and exchange goods and services (“re-intermediation”). Regardless, both approaches imply radical changes in business processes, technologies, and organizational structures.

This complete retooling of business structures will clearly have a major impact on how organizations interact with potential and existing customers. Reorienting business activities around the customer is already one of the hottest emerging trends in IT, and as the need to maximize profitable customer relationships attracts even more attention, that trend will accelerate.

Customer relationship management (CRM) is a good example. Many companies — including Hewlett-Packard, Acer America Corp., Lucent Technologies, and Capital One Financial Corp. — are now moving their attention from “traditional” CRM solutions, which focus on transaction-oriented views of the customer, to new ones that go beyond transactional data to drive virtually every aspect of managing customer satisfaction and loyalty. These strategies are the basis of a new subcategory of CRM systems, variously known as Internet interaction management (or IIM, the term I’ll use here), Internet customer relationship management (ICRM), Internet relationship management (IRM), and electronic CRM (e-CRM). Regardless of the acronym, the goal is the same: to enhance customer satisfaction by meeting business performance promises and to improve the quality of customer interactions over the Internet.

The more intensive the Internet-based contact, the more chances exist to accomplish these four main goals:

• Thoroughly understanding customers needs

• Convince customers to initiate revenue-generating transactions (buying goods or clicking on banner ads, for example)

• Decrease customer migration rate through an increased customer involvement

• Attract potential customers through personalization.

Based on these goals, only those systems with a comprehensive set of “getting-to-know-the-customer” functionality will help New Economy organizations meet their goal of managing customer relationships efficiently and effectively. In today’s business environment, long-term competitive advantage is possible only if your organization has knowledge about a customer that your competitors don’t. That goal implies the need to capture vast quantities of information about individual customer needs and their perception of your organization, and to use that information to customize products and services on a one-to-one basis. For many leading “e-business transformation” companies such as FedEx, U S West, and Bank of America, and for more than 30 major dot-coms such as Amazon.com and Tickets.com, it didn’t take long to grasp the value of this new customer interaction management approach. These companies are already actively implementing it to forestall margin erosion and improve customer retention.

What is IIM?

Let’s start with a working definition of IIM. In essence, it implies the use of a platform for the design, development, and application of information management techniques (data warehousing, data mining, and so on) in combination with other advanced e-business enabling concepts (such as intelligent agent technology and Web content management infrastructure) to manage Internet-based interactions with economically valuable current or future customers. The ideal result is an emergent architecture for dynamic, personalized, Web-based customer- facing systems. Although a complete IIM solution is not yet commercially available, several interesting players — such as Vignette Corp., Motive, Kana Communications, and NetDialog — provide pieces of it. Furthermore, the major CRM vendors (Siebel Systems Inc., PeopleSoft-Vantive, Oracle, and so on), database makers (Informix), and data analysis vendors (MicroStrategy Inc., for example) are entering the race.

The application of decision-support technologies to IIM is similar, but not identical, to their application in “traditional” CRM. A major goal in the former is to gather and analyze customer profile and behavior data as an essential value-add to customer information, integrating disparate islands of customer-focused data (from Web sites, knowledge bases, and call-tracking systems) and enabling highly targeted delivery of content (products and services) based on customer personal interests. (See Figure 1) Broadly speaking, using IIM, all online interactions with customers are formed based on the context of who the customer is and what his or her needs are.

But how does this process differ from that characterizing “traditional” CRM? In simple terms, the main differences are the focus and “timelessness” of decision-support processing. In traditional CRM, decision-support technologies are focused on optimizing customer service, sales, and support processes. Data warehousing is the primary instrument here for forging a centralized view of the customer through the integration of back-end transactional systems, front-end customer facing systems, and external information sources. Much of this processing involves offline analyses of historical trends and comparative data in order to understand why certain events occurred. Based on this historical perspective, analysts then build predictive models to understand what may happen in the future before putting changes into effect.

In IIM, however, the emphasis is on optimizing interactive, personalized, and relevant communications with customers across electronic channels. Decision- support technologies and data mining especially help analysts make realtime decisions about messaging, offers, and channel delivery. Furthermore, in IIM, those technologies focus on understanding how the economics of online customer interactions affect the business. In a nutshell: The main goal of IIM is to create a comprehensive Internet-based application platform capable of facilitating the development of customer loyalty and satisfaction across all aspects of online interactions.

For example, although you could classify Vignette’s StoryServer as a traditional Web content management tool, it’s actually much more. StoryServer exploits user profiling extensively; it records information about a user’s navigational behavior in a database where you can analyze it using Vignette-supplied and third-party analytic tools in order to personalize content delivery and build statistical user profiles. Moreover, StoryServer includes specialized intelligent agents (such as a “matching” agent and a “recommendation” agent) that tailor the content to the user’s explicit and implicit interests and preferences.

Technical Architecture

IIM requires a complex combination of tightly integrated software technologies. Fortunately, you have many options to consider.

The IIM architecture I’ll describe here specifies the component and technology frameworks required for successfully building and deploying specific IIM solutions. In other words, this architecture is a “guiding blueprint” for choosing the software that will help your company implement e-business application solutions with IIM characteristics. Furthermore, like any comprehensive architecture, IIM comprises a range of common technical services to reduce delivery time and total cost of ownership; it also incorporates certain unique architectural requirements. (See sidebar, “One of a Kind.”)

At the strategic level, the IIM architecture is a “living” (that, is extendable) application server deployment architecture designed to provide technical capabilities for building e-business applications in the IIM mold. These features fall into seven functional categories, or IIM technology “engines”: information integration services across enterprise data and application resources, advanced content management, personalized content syndication and broadcasting, business components and prebuilt application modules, built-in data mining services, and workflow process-management services.

FIGURE 1 IIM architecture.

Information Integration

The first engine, information integration services, addresses the issue of enterprise application integration (EAI) within the IIM framework. Two requirements are important here: the deployment of tools and services that ensure highly flexible operating systems, languages, database access, communication protocols, and distributed services such as CORBA or Enterprise Java- Beans (EJB); and deployment of tools and services that generate complex “answers” from any customer information source within the enterprise.

A complete implementation of this IIM engine would give you a true, advanced-function EAI infrastructure that leverages extensible markup language (XML) to exchange information among disparate systems, including native data integration modules that plug into ERP applications (such as SAP, PeopleSoft, and Baan), transaction systems (such as CICS, MQSeries, and Microsoft Transaction Server), e-commerce environments, object systems, legacy applications, modeling tools, and security systems. Such robust integration is necessary to rapidly exchange information among the many applications that manage the complex interconnections associated with customer interactions (such as communicating with the customer, taking and fulfilling orders, providing service-related information or tips, and so on). For example, one telecommunications company, which has integrated its systems in the manner I just described, has the ability to suggest at the time of customer contact new products or services based on realtime data mining and up-to-the-minute call history. If a customer orders a new line via the Internet, for example, the phone number and date of service are provided immediately.

For this reason, an IIM server must provide a highly productive integrated development environment as well as a flexible component assembly platform. When deployed into an IIM application server environment, applications should interoperate across CORBA, COM, Java- Beans, and EJBs without custom coding, and access and exchange information with diverse internal and external enterprise systems.

Advanced Content Management

The second engine, advanced content management, is a comprehensive environment for team-based production and delivery of content. A fundamental need in establishing a successful IIM infrastructure strategy, this engine lets your organization collaboratively distribute information over the Internet by automatically gathering, versioning, testing, and deploying vast amounts of Web content.

Typically, content management is a custom-coded environment built on programming languages such as C/C++ or Java, various scripting languages, and template-based page layouts. In these environments, application developers spend a lot of time producing and maintaining content through programming. In order to dynamically assemble personalized content, for example, a simple HTML page has to fully generate in real time. Generating every page on the fly is a challenging endeavor that requires not only complex programming for customer personalization, but also significant hardware investments to scale to acceptable performance levels.

To exploit adaptive navigation, dynamic content assembly, and personalized content delivery, a successful IIM strategy must incorporate powerful content-component site management software that lets you define individual displayable components (a combination of content, format, and related application logic) without tying them to the specific pages on which these components might appear. Using such software, application pages are defined by specifying a series of nested content-component elements (or blocks) for building the page. This modular approach enables an inherent, dynamic ability to separate content from presentation logic, letting users without programming expertise get involved in content production and maintenance.

These capabilities become highly important for companies that have Web sites containing a large number of content-intensive, frequently updated pages, and which have more than 10 people involved in content production, Web publishing and support of those sites. American Express, EMC Corp., and Sharp Electronics are a few of the companies using this approach to shorten Web-site management cycles and reduce costs.

Personalized Content Syndication and Broadcasting

This engine provides all the functional requirements of a Web-based IIM application. It provides the basis for a site navigational structure that adapts easily to different types of visitor browser environments, behavior, and preferences.

The engine simplifies the creation and management of a Web application by syndicating content, pushing it to the customer as personalized messages. This software should be capable of delivering these messages via any communications channel, including the Web, pervasive devices (wireless), and voice.

Consider a Web site that offers travel-related content — such as destination information, news, tips, maps, and travel recommendations — from different sources. Using an IIM-type technology with personalized content syndication features, this portal could not only provide multisource content as a monolithic information set, but also offer interesting personalization features such as personal travel pages and chat rooms.

Business Components and Prebuilt Application Modules

This IIM engine comprises a set of ready-to-use applications such as Web front-store sites, e-commerce payment processing modules, interfaces to office groupware systems (Microsoft Outlook or Lotus Notes), and other vertical market applications.

With IIM requiring tight integration among ready-to-use applications, the need for an overarching component architecture for Internet-based applications is an urgent requirement. Recently, several interesting developments have occurred on this front. For example, Information Management Associates, a global provider of synchronized, multichannel e-business solutions, recently announced the integration of its Internet component architecture with a new service and support software application developed by Servmark, a Germany-based marketing and CRM consulting firm. From many perspectives, ICA is an open, object-oriented, component-based architecture designed to deliver an integrated, “universal” approach for implementing prebuilt vertical applications solutions across multiple communications channels. Other important developments here include the combined efforts by ERP vendors and supply-chain management vendors companies such as i2 Technologies Inc. and Ariba Inc. to establish a framework for e-marketplaces, which would comprise prebuilt vertical applications solutions within an IIM-oriented platform.

In-Place Data Mining Services

In-place data mining technology serves as the “brains” of the IIM framework. In contrast to traditional “sample and extract” data mining methods, it executes data mining functions directly against the customer-focused data sources on the IMM server. This part of the IIM framework is a key variable in enhancing customer satisfaction and customer loyalty because it enables an integrated, “closed-loop” decision-support process.

You should consider two main characteristics here when evaluating specific products:

• Granularity of business analysis of visitor data – the software’s ability to help you better understand customers and their preferences for different types of content (product or services) on a stroke- by-stroke basis. Because more and more “face-to-face” interactions with the customer are disappearing, companies must build capabilities to compensate for their absence. Consequently, the ability to analyze customer interactions at the lowest level of detail (preferably, on a stroke-by-stroke basis) and in real time is critical for identifying the key factors in successful customer or prospect interactions and outcomes, and to ensure that marketing strategies and messages are covering all the bases.

• Scalability — the software’s ability to access and analyze large volumes of data quickly and efficiently, and to utilize and manage a range of predictive models. With e-business, most companies’ data volumes are growing more rapidly than before, especially if they are capturing low-level customer interactions. This situation will preclude the success of an IIM initiative unless the technology involved is scalable and supports the analysis of low-level detail.

Multiple technologies are involved in this area: data mining agents, large-scale application parallelization techniques, and advanced database software techniques such as compression or indexing. The best example of products in this category is KnowledgeStudio from Angoss Software Inc., which has a robust architecture that lends itself to rapid integration within the IIM framework for the purposes of in-place data mining.

Workflow Process Management Services

The last IIM engine, workflow process management services, addresses the issue of complexity. When you’ve implemented all the other engines, instituting a rigor to business process will help make it possible to coordinate multiple types of IT staff, including administrators, application developers, Web developers, and content providers. For this reason, the IIM framework must include workflow services. This engine is crucial if your company faces large-scale content management issues. If it does, content management is such a large space that it must be split in ways that make the problem manageable. Because of this split, however, several instances of the same content management system may address specific subsets of content. The result is a distributive set of management processes, tools, and development groups that you need to manage as a whole. This situation makes workflow management an integral part of content management within the IIM framework.

New Economy, New Rules

Clearly, the management of customer relationships is a major issue for e-business. To cope with these challenges you must approach the issue from two perspectives: customer information and customer interaction. The IIM concept takes into consideration existing and adapted techniques of CRM, but also involves additional techniques focusing explicitly on customer interactions. The major strategy decision for companies adapting to the New Economy will be how to model their IT infrastructures along the architectural requirements of IIM.

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Mark M. Davydov, Ph.D. (mark.davydov@den.galileo.com) specializes in advanced systems architecture and data management solutions. He’s planned and implemented enterprisewide systems architecture initiatives for more than 30 Fortune 500 companies.

RESOURCES Angoss Software: www.angoss.com IMA: www.imaedge.com Vignette: www.vignette.com