Category Archives: Vertical
I recently wrapped up two overseas trips; one to Central America and another to South Africa. As such, I had the opportunity to meet with a national bank and a regional retailer. It prompted me to ask the question: Does location matter in emerging markets?
I wish I could tell you that there was a common theme on how firms in the same sector or country (even city) treat data on a philosophical or operational level but I cannot. It is such a unique experience every time as factors like ownership history, regulatory scrutiny, available/affordable skill set and past as well as current financial success create a unique grey pattern rather than a comfortable black and white separation. This is even more obvious when I mix in recent meetings I had with North American organizations in the same sectors.
Banking in Latin vs North America
While a national bank in Latin America may seem lethargic, unimaginative and unpolished at first, you can feel the excitement when they can conceive, touch and play with the potential of new paradigms, like becoming data-driven. Decades of public ownership did not seem to have stifled their willingness to learn and improve. On the other side, there is a stock market-listed, regional US bank and half the organization appears to believe in meddling along without expert IT knowledge, which reduced adoption and financial success in past projects. Back office leadership also firmly believes in “relationship management” over data-driven “value management”.
To quote a leader in their finance department, “we don’t believe that knowing a few more characteristics about a client creates more profit….the account rep already knows everything about them and what they have and need”. Then he said, “Not sure why the other departments told you there are issues. We have all this information but it may not be rolled out to them yet or they have no license to view it to date.” This reminded me of the “All Quiet on the Western Front” mentality. If it is all good over here, why are most people saying it is not? Granted; one more attribute may not tip the scale to higher profits but a few more and their historical interrelationship typically does.
As an example; think about the correlation of average account balance fluctuations, property sale, bill pay account payee set ups, credit card late charges and call center interactions over the course of a year.
The Latin American bankers just said, “We have no idea what we know and don’t know…but we know that even long standing relationships with corporate clients are lacking upsell execution”. In this case, upsell potential centered on wire transfer SWIFT message transformation to their local standard they report of and back. Understanding the SWIFT message parameters in full creates an opportunity to approach originating entities and cutting out the middleman bank.
Retailing in Africa vs Europe
The African retailer’s IT architects indicated that customer information is centralized and complete and that integration is not an issue as they have done it forever. Also, consumer householding information is not a viable concept due to different regional interpretations, vendor information is brand specific and therefore not centrally managed and event based actions are easily handled in BizTalk. Home delivery and pickup is in its infancy.
The only apparent improvement area is product information enrichment for an omnichannel strategy. This would involve enhancing attribution for merchandise demand planning, inventory and logistics management and marketing. Attributes could include not only full and standardized capture of style, packaging, shipping instructions, logical groupings, WIP vs finished goods identifiers, units of measure, images and lead times but also regional cultural and climate implications.
However, data-driven retailers are increasingly becoming service and logistics companies to improve wallet share, even in emerging markets. Look at the successful Russian eTailer Ozon, which is handling 3rd party merchandise for shipping and cash management via a combination of agency-style mom & pop shops and online capabilities. Having good products at the lowest price alone is not cutting it anymore and it has not for a while. Only luxury chains may be able to avoid this realization for now. Store size and location come at a premium these days. Hypermarkets are ill-equipped to deal with high-profit specialty items. Commercial real estate vacancies on British high streets are at a high (Economist, July 13, 2014) and footfall is at a seven-year low. The Centre for Retail Research predicts that 20% of store locations will close over the next five years.
If specialized, high-end products are the most profitable, I can (test) sell most of them online or at least through fewer, smaller stores saving on carrying cost. If my customers can then pick them up and return them however they want (store, home) and I can reduce returns from normally 30% (per the Economist) to fewer than 10% by educating and servicing them as unbureaucratically as possible, I just won the semifinals. If I can then personalize recommendations based on my customers’ preferences, life style events, relationships, real-time location and reward them in a meaningful way, I just won the cup.
Emerging markets may seem a few years behind but companies like Amazon or Ozon have shown that first movers enjoy tremendous long-term advantages.
So what does this mean for IT? Putting your apps into the cloud (maybe even outside your country) may seem like an easy fix. However, it may not only create performance and legal issues but also unexpected cost to support decent SLA terms. Does your data support transactions for higher profits today to absorb this additional cost of going into the cloud? Focus on transactional applications and their management obfuscates the need for a strong backbone for data management, just like the one you built for your messaging and workflows ten years ago. Then you can tether all the fancy apps to it you want.
Have any emerging markets’ war stories or trends to share? I would love to hear them. Stay tuned for future editions of this series.
Saeed, what does Decision Point do?
We are a healthcare engagement analytics company…essentially we help clients that are “at risk” organizations to improve performance, including STAR ratings. We do this by providing data driven insights to more effectively engage members and providers.
What type of data do you use to make these recommendations?
Well, taking better care of members is about emotionally involving them in their care. Information to help do this resides in data that plans already have available, i.e. utilization patterns, distance to doctors, if they are compliant with evidence based guidelines, do they call into the call center. We also seek to include information about their behavior as a consumer. such as their lifestyles, their access to technology, and so forth.
Claims data makes sense, everyone has that but the other data you mentioned, that can be harder to capture. Why does non-claims oriented data matter?
We develop predictive models that are unique for each client – specifically based on the demographics and variables of their population. Variables like exercise and technology access matter because — for example, exercise habits influence mood and access to technology demonstrates a way to contact them or invite them to participate in online communities with other members like themselves.
The predictive models then determine which members are at most risk?
Yes, yes they do but they can also determine a member’s barriers to desired behavior, and their likelihood of responding to and acting on health plan communications. For example, if we identified a diabetic member as high risk of non-compliance, found their primary barrier to compliance as health literacy, and determined that the member will likely respond positively to a combination of health coaching and mobile health initiatives, we would recommend outreach that directly addresses these findings..
Noreen, when you were working on the payer side of the house, how were you going about determining which members were in your at risk population?
We had teams of people doing mining of claims data and we were asking members to complete surveys. This made for more data but the sheer volume of data made it complex to accurately review and assess which members were at highest risk. It was very challenging to take into consideration all of the variables that impact each member. Taking data from so many disparate sources and bringing it together is a big challenge.
What made it (and continues to make it) it so challenging, specifically to STARS?
So much of the data is collected as surveys or in other non-standard formats. Members inherently are unique which creates a lot of variability and it is often difficult to interpret the relationships that exist between members and primary care physicians, specialists, facilities and the rest of their care team. Relationships are important because they can provide insights into utilization patterns, potential overlaps or gaps in care and how we can most effectively engage those members in their care.
What are Informatica and Decision Point doing together?
To optimize the predictive models, as Saeed described, it’s imperative to feed them as much data and as accurate of data as possible. Without data, insights will be missed… and insights are the path to discovery and to improving CMS STARS ratings. Informatica is the data integration company — we ensure that data is reliable), connected (from any source to any target) and safe (avoiding data breaches or HIPAA violations). Informatica is delivering data to Decision Point efficiently and effectively so that clients have access to the best data possible to derive insights and improve outcomes. Our technology also provided the Star team with a member profile which brings together that disparate data and organizes it into the 360 degree view of that member. In addition to fueling Decision Point’s powerful algorithms, this is a tool that can be used for ongoing insights into the members.
Excellent, how can readers learn more?
According to a recent article in the LA Times, healthcare costs in the United States far exceed costs in other countries. For example, heart bypass surgery costs an average of $75,345 in the U.S. compared to $15,742 in the Netherlands and $16,492 in Argentina. In the U.S. healthcare accounts for 18% of the U.S. GDP and is increasing.
Michelle Blackmer is an healthcare industry expert at Informatica. In this interview, she explains why business as usual isn’t good enough anymore. Healthcare organizations are rethinking how they do business in an effort to improve outcomes, reduce costs, and comply with regulatory pressures such as the Affordable Care Act (ACA). Michelle believes a data-driven healthcare culture is foundational to personalized medicine and discusses the importance of clean, safe and connected data in executing a successful transformation.
Q. How is the healthcare industry responding to the rising costs of healthcare?
In response to the rising costs of healthcare, regulatory pressures (i.e. Affordable Care Act (ACA)), and the need to better patient outcomes at lower costs, the U.S. healthcare industry is transforming from a volume-based to a value-based model. In this new model, healthcare organizations need to invest in delivering personalized medicine.
To appreciate the potential of personalized medicine, think about your own healthcare experience. It’s typically reactive. You get sick, you go to the doctor, the doctor issues a prescription and you wait a couple of days to see if that drug works. If it doesn’t, you call the doctor and she tries another drug. This process is tedious, painful and costly.
Now imagine if you had a chronic disease like depression or cancer. On average, any given prescription drug only works for half of those who take it. Among cancer patients, the rate of ineffectiveness jumps to 75 percent. Anti-depressants are effective in only 62 percent of those who take them.
Organizations like MD Anderson and UPMC aim to put an end to cancer. They are combining scientific research with access to clean, safe and connected data (data of all types including genomic data). The insights revealed will empower personalized chemotherapies. Personalized medicine offers customized treatments based on patient history and best practices. Personalized medicine will transform healthcare delivery. Click on the links to watch videos about their transformational work.
Q. What role does data play in enabling personalized medicine?
Data is foundational to value-based care and personalized medicine. Not just any data will do. It needs to be clean, safe and connected data. It needs to be delivered rapidly across hallways and across networks.
As an industry, healthcare is at a stage where meaningful electronic data is being generated. Now you need to ensure that the data is accessible and trustworthy so that it can be rapidly analyzed. As data is aggregated across the ecosystem, married with financial and genomic data, data quality issues become more obvious. It’s vital that you can define the data issues so the people can spend their time analyzing the data to gain insights instead of wading through and manually resolving data quality issues.
The ability to trust data will differentiate leaders from the followers. Leaders will advance personalized medicine because they rely on clean, safe and connected data to:
1) Practice analytics as a core competency
2) Define evidence, deliver best practice care and personalize medicine
3) Engage patients and collaborate to foster strong, actionable relationships
Take a look at this Healthcare eBook for more on this topic: Potential Unlocked: Transforming Healthcare by Putting Information to Work.
Q. What is holding healthcare organizations back from managing their healthcare data like other mission-critical assets?
When you say other mission-critical assets, I think of facilitates, equipment, etc. Each of these assets has people and money assigned to manage and maintain them. The healthcare organizations I talk to who are highly invested in personalized medicine recognize that data is mission-critical. They are investing in the people, processes and technology needed to ensure data is clean, safe and connected. The technology includes data integration, data quality and master data management (MDM).
What’s holding other healthcare organizations back is that while they realize they need data governance, they wrongly believe they need to hire big teams of “data stewards” to be successful. In reality, you don’t need to hire a big team. Use the people you already have doing data governance. You may not have made this a formal part of their job description and they might not have data governance technologies yet, but they do have the skillset and they are already doing the work of a data steward.
So while a technology investment is required and you need people who can use the technology, start by formalizing the data stewardship work people are doing already as part of their current job. This way you have people who understand the data, taking an active role in the management of the data and they even get excited about it because their work is being recognized. IT takes on the role of enabling these people instead of having responsibility for all things data.
Q. Can you share examples of how immature information governance is a serious impediment to healthcare payers and providers?
Sure, without information governance, data is not harmonized across sources and so it is hard to make sense of it. This isn’t a problem when you are one business unit or one department, but when you want to get a comprehensive view or a view that incorporates external sources of information, this approach falls apart.
For example, let’s say the cardiology department in a healthcare organization implements a dashboard. The dashboard looks impressive. Then a group of physicians sees the dashboard, point out erroes and ask where the information (i.e. diagnosis or attending physician) came from. If you can’t answer these questions, trace the data back to its sources, or if you have data inconsistencies, the dashboard loses credibility. This is an example of how analytics fail to gain adoption and fail to foster innovation.
Q. Can you share examples of what data-driven healthcare organizations are doing differently?
Certainly, while many are just getting started on their journey to becoming data-driven, I’m seeing some inspiring examples, including:
- Implementing data governance for healthcare analytics. The program and data is owned by the business and enabled by IT and supported by technology such as data integration, data quality and MDM.
- Connecting information from across the entire healthcare ecosystem including 3rd party sources like payers, state agencies, and reference data like credit information from Equifax, firmographics from Dun & Bradstreet or NPI numbers from the national provider registry.
- Establishing consistent data definitions and parameters
- Thinking about the internet of things (IoT) and how to incorporate device data into analysis
- Engaging patients through non-traditional channels including loyalty programs and social media; tracking this information in a customer relationship management (CRM) system
- Fostering collaboration by understanding the relationships between patients, providers and the rest of the ecosystem
- Analyzing data to understand what is working and what is not working so that they can drive out unwanted variations in care
Q. What advice can you give healthcare provider and payer employees who want access to high quality healthcare data?
As with other organizational assets that deliver value—like buildings and equipment—data requires a foundational investment in people and systems to maximize return. In other words, institutions and individuals must start managing their mission-critical data with the same rigor they manage other mission-critical enterprise assets.
Q. Anything else you want to add?
Yes, I wanted to thank our 14 visionary customer executives at data-driven healthcare organizations such as MD Anderson, UPMC, Quest Diagnostics, Sutter Health, St. Joseph Health, Dallas Children’s Medical Center and Navinet for taking time out of their busy schedules to share their journeys toward becoming data-driven at Informatica World 2014. In our next post, I’ll share some highlights about how they are using data, how they are ensuring it is clean, safe and connected and a few data management best practices. InformaticaWorld attendees will be able to download presentations starting today! If you missed InformaticaWorld 2014, stay tuned for our upcoming webinars featuring many of these examples.
“Trying to improve the quality of asset data when you don’t have a solid data management infrastructure in place is like trying to save a sinking boat with a bailing bucket,” explained Dean Balog, a senior principal consultant at Noah Consulting, in this webinar, Attention Utility Executives: Don’t Waste Millions in Operating Costs Due to Bad Asset Data
Dean has 15 years of experience in information management in the utilities industry. In this interview, Dean and I discuss the top issues facing utility executives and how to improve the quality of mission-critical asset data for asset management / equipment maintenance and regulatory reporting, such as rate case submissions.
Q: Dean, what are the top issues facing utility executives?
A: The first issue is asset management / equipment maintenance. Knowing where to invest precious dollars is critical. Utility executives are engaged in a constant tug of war between two competing priorities: replacing aging infrastructure and regular maintenance.
Q. How are utility executives determining that balance?
A. You need to start with facts – the real costs and reliability information for each asset in your infrastructure. Without it, you are guessing. Basically, it is a data problem. Utility executives should ask themselves these questions:
- Do we have the ability to capture and combine cost and reliability information from multiple sources? Is it granular enough to be useful?
- Do we know the maintenance costs of eight-year-old breakers versus three-year-old breakers?
- Do our meters start failing around the average lifespan? For this example, let us say that is five years. Rather than falling uniformly into that average, do 30% of our meters fail in the first year and the rest last eight years? Those three extra years of life can certainly help out the bottom line.
Knowing your data makes all the difference. The right capital investment strategy requires combining performance, reliability, and cost data.
Q. Why is it difficult for utility executives to understand the real costs and reliability of assets?
A. I know this does not come as a shock, but most companies do not trust their data. Asset data is often inaccurate, inconsistent, and disconnected. Even the most basic data may not be available. For example, manufacture dates on breakers should be filled in, but they are not. If less than 50% of your breakers have manufacture dates, how can you build a preventative maintenance program? You do not even know what to address first!
A traditional approach to solving this data problem is to do a big data cleanup. You clean the data, and then before you know it, errors creep back in, and the trust in the data you have worked so hard to establish is lost.
I like to illustrate the pain of this issue by using the sinking boat analogy. Data cleanup is like bailing out the water collecting in the bottom of the boat. You think you are solving the problem but more water still seeps into the boat. You cannot stop bailing or you will sink. What you need to do is fix the leaks, and then bail out the boat. But, if you do not lift up your head from bailing long enough to see the leaks and make the right investments, you are fighting a losing battle.
Q. What can utility executives do to improve the quality of asset data?
A. First of all, you need to develop a data governance framework. Going back to the analogy, a data governance framework gives you the structure to find the leaks, fix the leaks, and monitor how much of the water has been bailed out. If the water level is still rising, you have not fixed all the leaks. But having a data governance framework is not the be-all and end-all.
You also need to appoint data stewards to be accountable for establishing and maintaining high quality asset data. The job of a data steward would be easy if there was only one system where all asset data resided. But the fact of the matter is that asset data is fragmented – scattered across multiple systems. Data stewards have a huge responsibility and they need to be supported by a solid data management infrastructure to ease the burden of managing business-critical asset information.
Master Data Management (MDM) ensures business-critical asset data is consistent everywhere by pulling together data that is scattered across multiple applications. It manages and masters it in a central location on a continuous basis and shares it with any applications that need that data. MDM provides a user interface and workflow for data stewards to manage the tangled web of names and IDs these assets are known by across systems. It also gives utilities a disciplined approach to manage important relationships between the asset data, such as an asset’s performance reliability and its cost.
Q. Any other pressing issues facing utilities?
A. Yes. Another big issue is tightening regulations that consume investment dollars and become key inputs into rate case submissions and defenses. One of the complicating factors is the number of regulations is not only increasing, but the regulators are also requiring faster implementation times than ever before. So, utilities cannot just do what they have done in the past: throw more people at the problem in the short-term and resolve to fix it later by automating it “when things slow down.” That day never comes.
Q. How can utilities deal with these regulatory pressures?
A. Utilities need a new approach to deal with regulations. Start with the assumption that all data is fair game for regulators. All data must be accessible. You need to be able to report on it, not only to comply with regulations, but for competitive advantage. This requires the high quality asset information we talked about earlier, and an analytical application to:
- Perform what-if analyses for your asset investment program;
- Develop regulatory compliance or environmental reports quickly, because the hard work (integrating the data within your MDM program) has already been done; and
- Get access to granular, observed reliability and cost information using your own utility’s data – not benchmark data that is already a couple of years old and highly summarized.
Q. What is your advice for utility company executives?
A. If you are the one responsible for signing off on regulatory reports and you do not look good in an orange jumpsuit, you need to invest in a plan that includes people, process, and technology to support regulatory reporting and asset management / equipment maintenance.
- People – Data stewards have clear accountability for the quality of asset data.
- Process – Data governance is your game plan.
- Technology – A solid data management infrastructure consisting of data integration, data quality, and master data management is your means.
If you are responsible for asset management / equipment maintenance or regulatory reporting, particularly rate case submissions, check out this webinar, Attention Utility Executives: Don’t Waste Millions in Operating Costs Due to Bad Asset Data
Our panel of utility data experts:
- Reveal the five toughest business challenges facing utility industry executives;
- Explain how bad asset data could be costing you millions of dollars in operating costs;
- Share three best practices for optimizing asset management / equipment maintenance and regulatory reporting with accurate, consistent, and connected asset information; and
- Show you how to implement these best practices with a demonstration.
Maybe the word “death” is a bit strong, so let’s say “demise” instead. Recently I read an article in the Harvard Business Review around how Big Data and Data Scientists will rule the world of the 21st century corporation and how they have to operate for maximum value. The thing I found rather disturbing was that it takes a PhD – probably a few of them – in a variety of math areas to give executives the necessary insight to make better decisions ranging from what product to develop next to who to sell it to and where.
Don’t get me wrong – this is mixed news for any enterprise software firm helping businesses locate, acquire, contextually link, understand and distribute high-quality data. The existence of such a high-value role validates product development but it also limits adoption. It is also great news that data has finally gathered the attention it deserves. But I am starting to ask myself why it always takes individuals with a “one-in-a-million” skill set to add value. What happened to the democratization of software? Why is the design starting point for enterprise software not always similar to B2C applications, like an iPhone app, i.e. simpler is better? Why is it always such a gradual “Cold War” evolution instead of a near-instant French Revolution?
Why do development environments for Big Data not accommodate limited or existing skills but always accommodate the most complex scenarios? Well, the answer could be that the first customers will be very large, very complex organizations with super complex problems, which they were unable to solve so far. If analytical apps have become a self-service proposition for business users, data integration should be as well. So why does access to a lot of fast moving and diverse data require scarce PIG or Cassandra developers to get the data into an analyzable shape and a PhD to query and interpret patterns?
I realize new technologies start with a foundation and as they spread supply will attempt to catch up to create an equilibrium. However, this is about a problem, which has existed for decades in many industries, such as the oil & gas, telecommunication, public and retail sector. Whenever I talk to architects and business leaders in these industries, they chuckle at “Big Data” and tell me “yes, we got that – and by the way, we have been dealing with this reality for a long time”. By now I would have expected that the skill (cost) side of turning data into a meaningful insight would have been driven down more significantly.
Informatica has made a tremendous push in this regard with its “Map Once, Deploy Anywhere” paradigm. I cannot wait to see what’s next – and I just saw something recently that got me very excited. Why you ask? Because at some point I would like to have at least a business-super user pummel terabytes of transaction and interaction data into an environment (Hadoop cluster, in memory DB…) and massage it so that his self-created dashboard gets him/her where (s)he needs to go. This should include concepts like; “where is the data I need for this insight?’, “what is missing and how do I get to that piece in the best way?”, “how do I want it to look to share it?” All that is required should be a semi-experienced knowledge of Excel and PowerPoint to get your hands on advanced Big Data analytics. Don’t you think? Do you believe that this role will disappear as quickly as it has surfaced?
Murphy’s First Law of Bad Data – If You Make A Small Change Without Involving Your Client – You Will Waste Heaps Of Money
I have not used my personal encounter with bad data management for over a year but a couple of weeks ago I was compelled to revive it. Why you ask? Well, a complete stranger started to receive one of my friend’s text messages – including mine – and it took days for him to detect it and a week later nobody at this North American wireless operator had been able to fix it. This coincided with a meeting I had with a European telco’s enterprise architecture team. There was no better way to illustrate to them how a customer reacts and the risk to their operations, when communication breaks down due to just one tiny thing changing – say, his address (or in the SMS case, some random SIM mapping – another type of address).
In my case, I moved about 250 miles within the United States a couple of years ago and this seemingly common experience triggered a plethora of communication screw ups across every merchant a residential household engages with frequently, e.g. your bank, your insurer, your wireless carrier, your average retail clothing store, etc.
For more than two full years after my move to a new state, the following things continued to pop up on a monthly basis due to my incorrect customer data:
- In case of my old satellite TV provider they got to me (correct person) but with a misspelled last name at my correct, new address.
- My bank put me in a bit of a pickle as they sent “important tax documentation”, which I did not want to open as my new tenants’ names (in the house I just vacated) was on the letter but with my new home’s address.
- My mortgage lender sends me a refinancing offer to my new address (right person & right address) but with my wife’s as well as my name completely butchered.
- My wife’s airline, where she enjoys the highest level of frequent flyer status, continually mails her offers duplicating her last name as her first name.
- A high-end furniture retailer sends two 100-page glossy catalogs probably costing $80 each to our address – one for me, one for her.
- A national health insurer sends “sensitive health information” (disclosed on envelope) to my new residence’s address but for the prior owner.
- My legacy operator turns on the wrong premium channels on half my set-top boxes.
- The same operator sends me a SMS the next day thanking me for switching to electronic billing as part of my move, which I did not sign up for, followed by payment notices (as I did not get my invoice in the mail). When I called this error out for the next three months by calling their contact center and indicating how much revenue I generate for them across all services, they counter with “sorry, we don’t have access to the wireless account data”, “you will see it change on the next bill cycle” and “you show as paper billing in our system today”.
Ignoring the potential for data privacy law suits, you start wondering how long you have to be a customer and how much money you need to spend with a merchant (and they need to waste) for them to take changes to your data more seriously. And this are not even merchants to whom I am brand new – these guys have known me and taken my money for years!
One thing I nearly forgot…these mailings all happened at least once a month on average, sometimes twice over 2 years. If I do some pigeon math here, I would have estimated the postage and production cost alone to run in the hundreds of dollars.
However, the most egregious trespass though belonged to my home owner’s insurance carrier (HOI), who was also my mortgage broker. They had a double whammy in store for me. First, I received a cancellation notice from the HOI for my old residence indicating they had cancelled my policy as the last payment was not received and that any claims will be denied as a consequence. Then, my new residence’s HOI advised they added my old home’s HOI to my account.
After wondering what I could have possibly done to trigger this, I called all four parties (not three as the mortgage firm did not share data with the insurance broker side – surprise, surprise) to find out what had happened.
It turns out that I had to explain and prove to all of them how one party’s data change during my move erroneously exposed me to liability. It felt like the old days, when seedy telco sales people needed only your name and phone number and associate it with some sort of promotion (back of a raffle card to win a new car), you never took part in, to switch your long distance carrier and present you with a $400 bill the coming month. Yes, that also happened to me…many years ago. Here again, the consumer had to do all the legwork when someone (not an automatic process!) switched some entry without any oversight or review triggering hours of wasted effort on their and my side.
We can argue all day long if these screw ups are due to bad processes or bad data, but in all reality, even processes are triggered from some sort of underlying event, which is something as mundane as a database field’s flag being updated when your last purchase puts you in a new marketing segment.
Now imagine you get married and you wife changes her name. With all these company internal (CRM, Billing, ERP), free public (property tax), commercial (credit bureaus, mailing lists) and social media data sources out there, you would think such everyday changes could get picked up quicker and automatically. If not automatically, then should there not be some sort of trigger to kick off a “governance” process; something along the lines of “email/call the customer if attribute X has changed” or “please log into your account and update your information – we heard you moved”. If American Express was able to detect ten years ago that someone purchased $500 worth of product with your credit card at a gas station or some lingerie website, known for fraudulent activity, why not your bank or insurer, who know even more about you? And yes, that happened to me as well.
Tell me about one of your “data-driven” horror scenarios?
I recently had a lengthy conversation with a business executive of a European telco. His biggest concern was to not only understand the motivations and related characteristics of consumers but to accomplish this insight much faster than before. Given available resources and current priorities this is something unattainable for many operators.
Unlike a few years ago – remember the time before iPad – his organization today is awash with data points from millions of devices, hundreds of device types and many applications.
One way for him to understand consumer motivation; and therefore intentions, is to get a better view of a user’s network and all related interactions and transactions. This includes his family household, friends and business network (also a type of household). The purpose of householding is to capture social and commercial relationships in a grouping of individuals (or businesses or both mixed together) in order to identify patterns (context), which can be exploited to better serve a customer a new individual product or bundle upsell, to push relevant apps, audio and video content.
Let’s add another layer of complexity by understanding not only who a subscriber is, who he knows and how often he interacts with these contacts and the services he has access to via one or more devices but also where he physically is at the moment he interacts. You may also combine this with customer service and (summarized) network performance data to understand who is high-value, high-overhead and/or high in customer experience. Most importantly, you will also be able to assess who will do what next and why.
Some of you may be thinking “Oh gosh, the next NSA program in the making”. Well, it may sound like it but the reality is that this data is out there today, available and interpretable if cleaned up, structured and linked and served in real time. Not only do data quality, ETL, analytical and master data systems provide the data backbone for this reality but process-based systems dealing with the systematic real-time engagement of consumers are the tool to make it actionable. If you add some sort of privacy rules using database or application-level masking technologies, most of us would feel more comfortable about this proposition.
This may feel like a massive project but as many things in IT life; it depends on how you scope it. I am a big fan of incremental mastering of increasingly more attributes of certain customer segments, business units, geographies, where lessons learnt can be replicated over and over to scale. Moreover, I am a big fan of figuring out what you are trying to achieve before even attempting to tackle it.
The beauty behind a “small” data backbone – more about “small data” in a future post – is that if a certain concept does not pan out in terms of effort or result, you have just wasted a small pile of cash instead of the $2 million for a complete throw-away. For example: if you initially decided that the central lynch pin in your household hub & spoke is the person, who owns the most contracts with you rather than the person who pays the bills every month or who has the largest average monthly bill, moving to an alternative perspective does not impact all services, all departments and all clients. Nevertheless, the role of each user in the network must be defined over time to achieve context, i.e. who is a contract signee, who is a payer, who is a user, who is an influencer, who is an employer, etc.
Why is this important to a business? It is because without the knowledge of who consumes, who pays for and who influences the purchase/change of a service/product, how can one create the right offers and target them to the right individual.
However, in order to make this initial call about household definition and scope or look at the options available and sensible, you have to look at social and cultural conventions, what you are trying to accomplish commercially and your current data set’s ability to achieve anything without a massive enrichment program. A couple of years ago, at a Middle Eastern operator, it was very clear that the local patriarchal society dictated that the center of this hub and spoke model was the oldest, non-retired male in the household, as all contracts down to children of cousins would typically run under his name. The goal was to capture extended family relationships more accurately and completely in order to create and sell new family-type bundles for greater market penetration and maximize usage given new bandwidth capacity.
As a parallel track aside from further rollout to other departments, customer segments and geos, you may also want to start thinking like another European operator I engaged a couple of years ago. They were trying to outsource some data validation and enrichment to their subscribers, which allowed for a more accurate and timely capture of changes, often life-style changes (moves, marriages, new job). The operator could then offer new bundles and roaming upsells. As a side effect, it also created a sense of empowerment and engagement in the client base.
I see bits and pieces of some of this being used when I switch on my home communication systems running broadband signal through my X-Box or set-top box into my TV using Netflix and Hulu and gaming. Moreover, a US cable operator actively promotes a “moving” package to help make sure you do not miss a single minute of entertainment when relocating.
Every time now I switch on my TV, I get content suggested to me. If telecommunication services would now be a bit more competitive in the US (an odd thing to say in every respect) and prices would come down to European levels, I would actually take advantage of the offer. And then there is the log-on pop up asking me to subscribe (or throubleshoot) a channel I have already subscribed to. Wonder who or what automated process switched that flag.
Ultimately, there cannot be a good customer experience without understanding customer intentions. I would love to hear stories from other practitioners on what they have seen in such respect
As I continue to counsel insurers about master data, they all agree immediately that it is something they need to get their hands around fast. If you ask participants in a workshop at any carrier; no matter if life, p&c, health or excess, they all raise their hands when I ask, “Do you have broadband bundle at home for internet, voice and TV as well as wireless voice and data?”, followed by “Would you want your company to be the insurance version of this?”
Now let me be clear; while communication service providers offer very sophisticated bundles, they are also still grappling with a comprehensive view of a client across all services (data, voice, text, residential, business, international, TV, mobile, etc.) each of their touch points (website, call center, local store). They are also miles away of including any sort of meaningful network data (jitter, dropped calls, failed call setups, etc.)
Similarly, my insurance investigations typically touch most of the frontline consumer (business and personal) contact points including agencies, marketing (incl. CEM & VOC) and the service center. On all these we typically see a significant lack of productivity given that policy, billing, payments and claims systems are service line specific, while supporting functions from developing leads and underwriting to claims adjucation often handle more than one type of claim.
This lack of performance is worsened even more by the fact that campaigns have sub-optimal campaign response and conversion rates. As touchpoint-enabling CRM applications also suffer from a lack of complete or consistent contact preference information, interactions may violate local privacy regulations. In addition, service centers may capture leads only to log them into a black box AS400 policy system to disappear.
Here again we often hear that the fix could just happen by scrubbing data before it goes into the data warehouse. However, the data typically does not sync back to the source systems so any interaction with a client via chat, phone or face-to-face will not have real time, accurate information to execute a flawless transaction.
On the insurance IT side we also see enormous overhead; from scrubbing every database from source via staging to the analytical reporting environment every month or quarter to one-off clean up projects for the next acquired book-of-business. For a mid-sized, regional carrier (ca. $6B net premiums written) we find an average of $13.1 million in annual benefits from a central customer hub. This figure results in a ROI of between 600-900% depending on requirement complexity, distribution model, IT infrastructure and service lines. This number includes some baseline revenue improvements, productivity gains and cost avoidance as well as reduction.
On the health insurance side, my clients have complained about regional data sources contributing incomplete (often driven by local process & law) and incorrect data (name, address, etc.) to untrusted reports from membership, claims and sales data warehouses. This makes budgeting of such items like medical advice lines staffed by nurses, sales compensation planning and even identifying high-risk members (now driven by the Affordable Care Act) a true mission impossible, which makes the life of the pricing teams challenging.
Over in the life insurers category, whole and universal life plans now encounter a situation where high value clients first faced lower than expected yields due to the low interest rate environment on top of front-loaded fees as well as the front loading of the cost of the term component. Now, as bonds are forecast to decrease in value in the near future, publicly traded carriers will likely be forced to sell bonds before maturity to make good on term life commitments and whole life minimum yield commitments to keep policies in force.
This means that insurers need a full profile of clients as they experience life changes like a move, loss of job, a promotion or birth. Such changes require the proper mitigation strategy, which can be employed to protect a baseline of coverage in order to maintain or improve the premium. This can range from splitting term from whole life to using managed investment portfolio yields to temporarily pad premium shortfalls.
Overall, without a true, timely and complete picture of a client and his/her personal and professional relationships over time and what strategies were presented, considered appealing and ultimately put in force, how will margins improve? Surely, social media data can help here but it should be a second step after mastering what is available in-house already. What are some of your experiences how carriers have tried to collect and use core customer data?