TDWI | Training & Research | Business Intelligence, Analytics, Big Data, Data Warehousing

Customer Data Integration: Five Areas for Improvement

We explore five areas where CDI has the most room for improvement -- and opportunity for greater benefit -- and recommend corrective actions that user organizations can apply successfully.

• By Philip Russom, Ph.D.
• February 11, 2010

Business and technology users regularly tell me how useful customer data integration (CDI) is for improving customer service, the 360-degree view of each customer, and sales and marketing activities. Yet, these same users lament the regrettable condition that their CDI solutions have deteriorated into over the years. That's because most CDI solutions today are homegrown legacies that lack modern technologies such as data quality and master data management. Many organizations suffer numerous CDI solutions that are siloed and redundant, sometimes contradictory and non-compliant. Aggregated customer data is all too often incomplete, poorly modeled, and myopic.

It's no wonder that half of users responding to a TDWI survey consider their organization's CDI success to be mediocre. Yet, CDI's success could be greatly enhanced if user organizations enhanced their CDI solutions in the right ways. Allow me to point out the top five areas where CDI has the most room for improvement -- and opportunity for greater benefit -- and recommend corrective actions that I've seen user organizations apply successfully.

1. Consolidate or Federate Disparate CDI Solutions

Survey data from TDWI Research shows that user organizations have 5.2 CDI solutions on average. That's actually a very manageable number of systems. The number isn't the problem; it's the fact that the solutions are owned by diverse departments and are connected to a short list of systems, such that each is a silo -- the very thing that CDI is supposed to cure!

If you're serious about 360-degree views of customers and data consistency, you'll consolidate redundant CDI solutions and federate or otherwise integrate the ones you can't consolidate. If possible, such corrections should be in the context of a larger plan for evolving CDI from a point solution to an enterprisewide practice that treats customer data as an enterprise asset instead of a departmental commodity.

2. Update or Replace Legacy CDI Solutions

Some solutions are 15 or even 20 years old. By now, all these are legacies that need to be replaced or modernized significantly. After all, we know a lot more today about integrating and modeling customer data than we did back then, and there are many more data management tools available that you could apply to CDI.

A compelling reason for an update or replacement is to satisfy new technology requirements for data integration, data quality, master data management, and data governance. Other modern techniques to consider include service- oriented architecture, real-time interoperability, and bidirectional data synchronization. Without these, it's hard for your CDI solution to stay relevant as your business becomes more digital.

3. Close the Loop with Integrated Customer Data

Almost all home-grown CDI solutions integrate customer data one-way into a mid-tier database but rarely push the data back upstream to operational applications where most of it came from. Ideally, the improved and completed customer data of the CDI solution should close the loop back to source systems, so they and their users benefit, too.

4. Revise Your Data Models for Better Analytics

Customer data is usually modeled in flat tabular structures. This is fine for CDI solutions that support front-office operational activities such as direct marketing, customer service, and sales. However, as more firms move deeper into analytics, they need customer data aggregated and modeled in hierarchical or multidimensional views for analytic tasks, such as customer segmentation, propensity to churn, and customer profitability.

5. Make Aggregated Data as Complete as Possible

You may need to alter business processes (especially for sales and service) to capture more data about the customer at each touch point. Silo'd CDI solutions take a departmental view, whereas the consolidated systems mentioned earlier yield a complete enterprise view.

Furthermore, internal data tells you only what the customer does with your organization; to find out what the customer does elsewhere, you need to acquire third-party customer data from an external provider.

For more tips on getting more out of CDI, see TDWI's Best Practices report on CDI, available for download at www.tdwi.org/research/reportseries.