Tuesday, December 3, 2013

Why is the understanding of the consumer relevant for a Business Intelligence solution?

I was recently surprised when one of my customers asked me if I thought that understanding the mind and behavior of the customer was relevant when designing a Business Intelligence solution. My gut was telling me that the answer was absolutely yes, but I did not have any elements to qualify my response and in all honesty typically it is the other way around, we design Business Intelligence solutions to get insights into the mind and behavior of consumers.
Presented with this conundrum, I really had to go back to my college days and pull out some material on psychology and examine it in the light of my professional experience and role as a consumer. The findings were really interesting as they helped me to put many variables in perspective. I will attempt to document my conclusions on this blog with the hope that others will find them useful as well.

My investigation began while searching for an answer to a basic question: what are our motivations behind consumption? If you think about it, at a basic level, we all have the same physical needs: food, sleep, etc. but our consumption habits are extremely different, even with physical identical twins they might choose different styles, colors or just entirely different products when given an opportunity.

I used Maslow’s hierarchy of needs (Google it if you don’t know what I am talking about) as a base to create my own interpretation of a consumer acquisition patterns (Figure 1)

While it is true that a basic level we all need to satisfy the same physical needs to survive, once these needs are covered, we immediately tend to start looking to satisfy higher level needs that truly vary from person to person according to personality, experience, emotional intelligence, etc. At the end of the other spectrum we have a purely intellectual need that is a reflection of the self where each of us IS truly different.

Definitively an interesting finding, but it and on by itself it does not tell us anything truly new, however it does set the principle that a base level we all need to satisfy the same physical needs. How we decide to satisfy these needs that is entirely up to the self.
Retailers understand this principle extremely well; in fact most of the retail definitions (e.g. stores and brands) exist as the intersection of three variables: Product, Price and Place. It is all about what we want to consume, at what price, where.
So, if it is all about the self and given the choice each of us will select something different, how can we influence what the consumers will pick?
Going back to our retail example, the “easiest” variable to play with it is typically “Price”, as the location of the stores and the item assortments cannot be changed by the minute (while pricing literally can).

Using “Price” to motivate consumption is a science by itself; however, for the purpose of this blog I will attempt to simplify the concept within a continuum as depicted in Figure 2 below.

Most of the consumers will be motivated to acquire a good/service only if it falls within the value zone (the ratio of satisfaction received is proportional to the price), if the price goes too high or even too low we will find extreme behaviors driving the purchase. For example, who can remember when the first Application Store opened for the iPhone there was an application that did not do anything but display the image of a Gem? The developer wanted to charge 1000 USD for the application which only purpose in life was to showcase your friends you were wealthy and had a significant position or social status. Most of the iPhone users ignored the application, but surprisingly 5 people bought the app before Apple pulled it out from the store. The other extreme is an item which is priced too low and we immediately start associating the low price with low quality, for example who would buy a 50 inch LED TV for 250 USD when we know the average price for those TVs is much higher? Again, during 2013 Black Friday there were long lines outside of Target to buy this TV mostly because people enjoyed the trill of getting a very good deal or truly because they did not have money to buy anything better.

During this journey of consumer discovery, we cannot forget that people are social entities that do not live in isolation, but rather in a very complex network of relationships. Our ability to perceive the world is many times tied to the people that we interact more closely, not to mention our emotional and sometimes hormonal fluctuations. In fact, a typical person’s mood might vary significantly during a day in respond to these stimuli as depicted in Figure 3 above.

Retailers or service providers who understand this principle are able to position their offerings in such a way that they connect emotionally with the consumers. For good or bad an emotional connection is many times stronger than logical connection thus once an emotional connection is made the consumer is extremely likely to remain most loyal to the brand and truly go out of their way to acquire the provider’s product or services (e.g. who can forget the long lines at Apple stores with the launch of the early generations iPhones?)

However, it is also worth noticing that while emotion can influence a purchase, the reverse is also true.  For example, for years retailers have been able to determine the shopping occasion by the number and type of items in a shoppers market basket, however using signage, promotions and key interactions with sales associates, the retailer is able to influence and sometimes convert the initial purpose of shopping trip to a completely different outcome. Again, taking our example of Black Friday, many shopper do the lines with the expectation to buy the door buster item and go after the next bargain, but once in the store they can be influenced to stay and shop for other items that were not originally on their list.

I hope that this exploration of the consumer motivations and behavior has shed some light on our original question to determine if this insight is relevant when designing a Business Intelligence solution? A Business Intelligence solution is all about using data facts to measure specific variables against established baselines. However, the key value of the solution is in the understanding of what to measure and more importantly against what baseline. These two variables are invariable linked to the outcome that one wants to optimize and most of the BI implementations are deployed with the objective of improving consumer sales.  

Sunday, October 13, 2013

The final retail battle: Brick and Mortar vs. eTailers

For many years retail was a simple art: stand-up a store, fill it with merchandise and let the shoppers take home what they like. The advent of the internet and on-line retailers like Amazon changed all that. This blog will attempt to explain how the electronic retailers changed customer shopping habits and what “hurdles” remain for electronic retailers or eTailers, for short, to completely disrupt what was once the beloved brick and mortar model. This blog will also comment on what opportunities and actions are available to brick and mortar retailers to restore their competitive advantage against the threat of complete domination of eTailers.

I-                    Traditional Shopping model
In the traditional brick and mortar shopping model, a merchant decides to build a store in a community taking into consideration the people within a particular distance radius of where the store will be located. It is assumed that the store’s merchandise will cater to those people and as such the assortment is carefully selected – within the constraints of space at the store – to maximize the product turnaround. Careful analysis of the store demographics is performed to fine tune the assortment, and pricing is determined both by demographics, and other competitive options that people might have available within the store radius of influence.  This model worked well for many years, allowing the creation, consolidation and growth of national, regional and local retailers that followed pretty much these same principles when opening new stores.
This model had a very good advantages, the customers knew what to expect and how to operate within the model and It was very straightforward: 1) look for something that you like on the shelf, 2) take to the register where it will be bagged and 3) pay for it and take it home. This model was also defined by some as “Cash and Carry”, as you would pay for things with cash (or equivalent) and take the merchandise home with you. This model provides an immediate gratification to the buyer and it is fairly simple for the retailer to operate as most of the goods were delivered to the store from a distribution center (Figure 2)
In order for the traditional model to work, both the Distribution Centers and the customers should be close to the store. Physical distance was of paramount of importance because both the cost of delivering goods to the store and the hassle for customers to get to the store increase proportionally to the distance it takes them to reach to the store (Figure 3)
So while people could potential drive a longer distance to get to their favorite store, the reality is that if the store is too far, they would probably not do it, and they would probably just settle for a comparable alternative that was convenient to them.

II-                  The Internet Shopping model
The internet changed the entire paradigm by opening a virtual store that is always a click away, taking the shopping convenience to an entirely new level where you can shop from anywhere you have a connected device without worrying about distance, gas or how you look.

The virtual store itself brought significant advantages to shoppers given them access to an expanded assortment – not limited by physical shelve space constraints, lower prices – giving that the ecommerce retailers could pass on the savings in store personnel, store maintenance, parking lots, etc – and in many instances lower taxes –typically companies are not required to withhold local sales taxes for out of state shoppers.

Many old time retailers were skeptical of the new model as it require access to a computer, internet and the ability to buy based on a limited description of the item rather than having access to the item itself, however time proved them wrong as the internet expanded into everybody’s pockets with the advent of the smartphone and tablets. Further, the benefits of price and selection outweighed any potential concerns of not being able to touch the item, especially for commodity such as books, electronics and many others categories.
The new model was not perfect; it had a small chin in the armor, the wait time. Typically shoppers would need to wait between 3 to 5 business days to get their item after submitting the order. (Figure 4).

The battle was on, with location and immediate gratification as its only weapons, brick and mortar retailers tried to wage war on their ecommerce counterparts with limited success. The ecommerce retailers counterattacked by building additional distribution centers closer to their customers and by introducing special programs that allowed members to receive their orders in about 2 business days. Having lost the battle on price and selection to the internet retailers (Figure 5), brick and mortar retailers could not afford to let them eliminate the location hurdle to wipe them over, so a new strategy was needed.

III-                Transforming Location into a competitive advantage
The strategy for the brick and mortar retailers needed to incorporate elements of the eCommerce counterparts by adding an internet channel but rather than replacing the traditional store channel creating a hybrid strategy that allowed pushing flexible and valuing add services, such as:

a)      Inventory origination flexibility: If the inventory for the item was not available at a particular store, you could find availability of that product within the “distribution cloud” – e.g any distribution center or even other stores that had the item(s) in stock could function as the shipping center, either sending the product to a nearby store where the customers could pick-up the items or directly sending the purchased items to the customer’s home

b)      Personalization: You could order the item on-line with your specific instructions, e.g. A birthday cake with a particular design and/or theme and pick it at the store,  or perhaps an engraving line for that new tablet

c)       Value added-services: like remembering your past purchases and offering you the ability to repeat the same purchase. Especially useful for prescription like items that you need to refill every month, or even for seasonal items that you bought last year and would like to complete the set or maybe for remembering the wine and cheese pairing that your significant other bought that was delicious and you cannot longer remember

d)      Social: you could immediate share what are you buying, your experience with the retailer and your experience with the product to your inner circle or to the masses with a few clicks
The most complex and daunting initiative was perhaps the establishment of the distribution cloud (Figure 6). This distribution cloud would become the new virtual hub to the retailer delivery operations, coordinating across stores and distribution centers to find the most optimal location to ship the inventory from; depending on availability, distance to destination and handling speed/cost.
 IV-               Enabling visibility within the new distribution cloud
Retailers quickly realized that the implementation of this new distribution cloud was a game changer, but they also realized that in order to achieved the promised competitive advantages they needed a way to get visibility into what was happening within the distribution cloud as their existing information systems were not design to provide the visibility required by the additional, smaller transactions being generated by the on-line channel. The new system required the implementation and sometimes definition of the new capabilities, including reverse logistics (e.g. if the customer returns the item to whom would it be shipped back - probably not the original inventory location of the item) and the ability to detect potentially fraudulent transactions, including money laundering. Further, additional business rules needed to be captured that enabled the proper routing of orders to the best suited distribution points, including equipment and labor available on a quasi-real time basis.
While many existing data warehouses already had some of these elements and were producing reports that measured some of these metrics, it was required to retrofit them with the new business rules of a hybrid, order on-line pick in store/receive at home system. New capabilities were required for an end-2-end Business Intelligence distribution platform that could provide the visibility and thus corroborate the effectives, savings and the acquisition/retention of key customers through this system (Figure 7)
V-                 Summary
In summary, in order to survive the brick and mortar retailers are being forced to adopt some of the same strategies that they are competing against. However, if they want to win the race, they need to leverage the competitive advantage their physical locations provide them over pure ecommerce retailers to implement a hybrid strategy that leverages the physical assets that in close proximity to the customers and integrate well with an on-line ordering channel that enables value add services. 
The brick and mortar retailers also need to be prepared to invest in expanding & enhancing their supply chain and distribution cloud business intelligence systems to enable the proper measuring of the new key metrics, thus accounting for the intelligence needed to fine-tune the system and make it delivers the game changer results they need.

Sunday, October 6, 2013

How much is loyalty worth?

Have you ever wondered how much is loyalty worth? Ever since the beginning of business history, business owners have tried to reward their best customers to entice them to continue to do business with them. The practice definitely got more popular when American Airlines launched their AAdvantage in 1981, establishing a competitive differentiation for the airline.
Let us explore why loyalty programs were such a game changer in business. If you think about it, most of the items and services you buy are considered commodity (e.g. they can be acquired from more than one service provider or manufacturer with very little differences between the two (or more) companies that provide that service or product). The airline business truly reflects this, if you are traveling from LA to New York, you will get the same if you fly airline A, airline B or airline C. All the planes travel at more or less the same speed, leave and arrive at the same airports and offer similar amenities (or lack of these days). So if three airlines fly the same route, you will always pick the one with the best price right?
Well, here is where things start to get interesting. The best loyalty programs not only give a kickback (or reward) with every purchase, but they are designed in such a way that the more you consume that product or service, the greater the rewards become. Going back to our airline, all the three airlines give you “miles” when you fly with them, but the differences are significant for people who fly them occasionally to people who fly them more often. More frequent flyers start to move up in tiers that offer additional perks such as “priority boarding”, “free bags”, “upgrades”, “better availability of award tickets”, etc.
If you are thinking that these perks hardly matter, think again, these so called perks influence millions of people to acquire products or services from a particular provider just to maintain or attain a particular tier or milestone in the program. In fact, many travelers will choose a particular airline for a route even if the price is higher than competition because of their status in the loyalty. Before you start thinking that these people should be criticized for letting airlines get away with higher fares, let us analyze the reason behind the behavior and what these travelers get in exchange for a few(or a lot) extra dollars: Most people think that if they travel a particular airline often enough they will get upgraded to first class. For good or bad this is true, most (if not all) airlines allocate unsold first class tickets to their most loyal customers often times as a free upgrade. Not to mention that frequent travelers enjoy priority lines and other benefits that do not cost the airline anything extra but they make the traveler feel important and do provide some additional comfort.
So far so good, it seems that users are willing to stick to a particular service provider in exchange for perks even if the price is a little higher for a commodity like service, but what happens when something does not go according to plan? Let us stick to the airline examples and revisit a real life scenario that happened recently in an American Airlines flight from Charlotte to Dallas. The next flight to Dallas had an empty seat that was allocated to the people on stand-by, one executive platinum (the highest American Airlines tier level) got the seat (even though his confirmed flight was four hours later) and boarded the plane early as per the airline policies. When he boarded the plane he noticed that a seat was broken and it was marked with masking tape, because the seat was not assigned seat he did not think much about the issue. Fast forward 20 minutes later when boarding was almost complete and surprise there is a person standing because she got allocated the seat that was broken. Given that no other seats are available the airline personnel needs to make a decision to ask one person to leave the flight.
If the airline truly valued the customer loyalty, who do you think they would asked to deplane? The last person who bought the ticket? The last person who checked-in? The person that got assigned the broken seat? Maybe the person who had the least miles in the airline loyalty program? Well no. By federal law when bumping a passenger from a flight for mechanical reasons (e.g. a broken seat), a confirmed passenger is entitled to compensation, which typically varies from 200 to 400 USD travel voucher for a domestic flight. So in order to minimize the expense the local airline supervisor decided to ask the Executive Platinum passenger who got the stand-by seat to deplane as this passenger was not entitled to any compensation because he did not hold a confirmed seat.
You must be thinking hum, so the loyalty program is good and valid only when the marginal cost to the airline of providing those “benefits” is marginal, when there was a real cost involved the loyalty of this frequent traveler was not worth as much as compensating a confirmed passenger for the next flight… So going back to the original question that this blog posed, how much is loyalty worth? Certainly for American Airlines it was worth much less than a couple of hundred bucks. Do you think the local supervisor made the right decision? What would you have done in his place?
More importantly, while this example applies to a particular airline, what greater lesson can we derive from this experience? My recommendation: be sure that you have a good way to measure the benefits (consumer) and cost (business) of the loyalty program, so the effectiveness can be objectively evaluated. And most of all, keep in mind that even the best loyalty programs will require trade-offs at some point in time and most importantly define that loyalty cannot be taken for granted. It gets renewed with every iteration consumers and business and it gets define over time taking into consideration all the acceptable alternatives.
In conclusion, like it or not, loyalty programs are here to stay. They provide a systematic way to influence consumers towards a particular brand and have proved to be extremely successful in encouraging repeat business. However, we need to be aware that everything comes at a cost for both consumers and business and that as good as the programs might or might not be, at the end is the people element that will make a lasting impression and determine the memory of the experience.

Sunday, August 18, 2013

eWallet: The next step in retail evolution

We live the in the “smart” age, everything seems to be connected to the internet these days, your phone, your TV, your car, but what about your wallet? Do you still have those last century old paper bills or maybe those molded plastic credit cards? Reality is that most of us still carry (and god forbid) use Twentieth century tools on a daily basis for buying goods and services in the Twenty first century.

So, how can come the digital revolution has yet to reach us in our pockets?  Don’t worry, it is coming and coming fast. With the new generation of mobile devices is now possible to link the device directly to bank and credit card accounts and many merchants have started to accept payments leveraging either a scan code displayed in the phone screen, or through “contactless” readers using the NFC (Near Field Communication) standards.

If you accept the fact that these technologies are already here, the next logical question is what will it mean for you, will it change what, where and how we shop? Most likely it will, let us explore what possibilities this new technology will bring and how it will impact shopper behavior:

First, let us think about how each of us gets to know about new products and what is happening in the market with our favorite retailers, chances are that you are part of either a mailing list and/or email campaign that periodically targets you with advertising. However, most of us find these kind of unrequested advertising irrelevant, annoying most times and occasionally a nuance. While some of the advanced shoppers would have no doubt signed-up for customized promotions the reality is that the information that we provide (or how these preferences are interpreted by the retailer) can only produce relevant hits once in a while. In my experience there is no better recommendation engine that the one which looks at every customer event: either purchase, on-line visit, or other interaction (e.g. call center), then uses advanced analytics (primarily event cluster – if you were wondering) to create a personalized profile that can distinguish every member of the household (so the dad does not his pregnant daughter specials) and their purchase occasions (e.g. when are you buying for yourself vs. a gift) to build a true historical profile.

In order to achieve this depth of customer knowledge, it is as important for the retailers to understand when you went to the store to buy something (which they can know by identifying you at the POS) and when you went to the store and did not buy anything and when you decided to go to a competitor’s instead -most the brick and mortar lacked the technology to identify you on this scenario. However, with the GPS technology added as a standard to all the “smart phones”, retailers have access to this data in almost real time. They can send promotions that will not only be specific tailored for you, but these promotions will only be delivered when are you physically on a location where you can act upon receiving them.  The possibilities become mind numbing: Imagine the scenario where you spend time in the store trying different outfits and then you decide not to buy anything, on the way out you receive a mobile coupon that is only valid on that visit, or the application could wait and see what other store you visit in the same shopping complex and then provide you an event better promotion that targets you as you enter the “competitor’s store”. Granted these scenarios will require you giving access to your geo-positioning to the retailer, but wouldn’t you do that to save some dollars on your favorite store?
Being able to pinpoint your location is just the beginning, thanks to Big Data, the retailers can play NSA with your purchases history and literally understand what your inventory is on hand, how old it is and how much you paid for it. These opens-up other possibilities, for example, if you are holding an Xbox® game which has strong demand and they know that there is one coming-up that you would definitively like to play, they could offer a higher trade-in amount for that game, which would lure into the store and then market to you to buy the new game at full retail price. You would be delighted and the retailer would have made good profit on your need to trade-up. In a more fashion driven example, imagine that you bought a jacket a month back which went out of fashion, the retailer could send you a reminder of the news trends and urge you to donate your old clothes (e.g. your month old jacket) to your local charity in exchange for a discount on new merchandise.  Better yet, in these scenarios, the credit for the trade-in game and the discount for new merchandise would be literally stored in your mobile device so you do not have to worry about carrying coupons or printed emails. Giving you an added level of convenience and giving the retailer a much closer relationship with you.

It is only logical that Digital Marketing, Mobile and eWallet will converge through Business Intelligence to bring a new level of personalization and convenience to shoppers, in exchange for their personal information and preferences. Reality is that this “Smart Wallet” already exists today and surely and inexorably will eventually replace our dear bills and credit cards. It is an evolution that truly started with Steve Jobs and the first iPhone and will now not stop until it has transformed the whole world. Retailers and Shoppers alike who don’t accept this new reality will be marginalized out of the digital economy, potentially taking the retailers out of business and increasing prices and reducing choices for merchandise (e.g. the shoppers will not receive discount coupons and announcements in real time).
There are still some open questions that will have to be answered, many will fear for their privacy while others will cherish the potential benefits of this deeper retailer-shopper relationship. Which one are you?

Monday, June 10, 2013

Big Data, are we there yet?

A couple of years back, I wrote my first blog on Big data: –Getting in Shape with Big Data. While almost two years have gone by – almost an eternity for the Information age standards – I keep hearing the same question from my customer visits: are we there yet?  Reality is that Big Data is just starting to deliver – Yes the value is indeed real and tangible - but the technology is on the early stages and it takes a lot of vision, expertise and sheer hard work to make a Big Data solution work. Hadoop has become the least expensive file system in the world. Many organizations are starting to use it as a cheaper Data Archival alternative with the promise that if the data needs to be retrieved the cost of storage and access will be cheaper than tape itself. While data archiving might sound like a modest use case it has created quite a revolution in the BI ecosystem. If you think about it, many large organizations kept a lot more data in the DWHSE because of the perceived loss of the data once it was moved to tape. However, with the data now being kept on Hard Drives and available with a simple Java map-reduce programs, many organizations are literally cleaning house and moving old data out of the Data Warehouse thus delaying the upgrade of the infrastructure and effectively putting some projects on hold.
From an analytics perspective adoption has been slower, while open source brings some good tools into the ecosystem – including R (for advanced analytics) and Graphite (for advanced graphics and plotting), we have yet to identify how to leverage of the power of the data stored in Hadoop for the masses. While it is true that everybody with Data and Java skills can write Map-Reduce programs, let us face it the majority of the analysts are Excel and Access gurus with the advanced population being proficient on SQL, only a very small percentage actually know how to code in Java. This lack of Java knowledge among the analysts has truly become the bottle neck for Hadoop to be an effective replacement of the Data Warehouse. However, the innovation continues and some open source projects like HIVE & PIGS continue to evolve to enhance the data consumption experience. While still in the early stages, the technology is very promising and will eventually mature to the point that Java Map-Reduce will be an exception rather than the norm for accessing data stored in Hadoop. In fact, there are technologies today, albeit commercial such as Teradata Aster, which can insulate the analysts from writing Map-Reduce and will simplify access to data stored in HDFS (Hadoop File System).
So are we there yet? Maybe not, but the speed of change is accelerating. As of now, probably most of the Fortune 500 companies are defining a big data strategy which in turn will push software, hardware and services vendors to innovate at a faster rate to close the gap against the expectations (or hype) that Big Data has created with the business stakeholders. My prediction is that in two more years (mid 2015) we will be able to access Hadoop in different ways that put the technology much closer (from a data perspective) to the relational SQL databases that we know today.

Saturday, April 13, 2013

Business Intelligence: The enablement engine for a successful Omni-Channel Strategy

 Context Setting

Watching through the eyes of history one can witness retail evolve from a rudimentary trade between two cavemen to the multi-trillion global industry that it is today. However, while it is true the basics continue to be the same (how to procure a “good” that someone else has in exchange for compensation) the way we go about it has changed radically. Let us take a quick look at history and see how the evolution of the interaction has evolved over time: In the beginning a “good” would be traded for another “good” directly from the person who could provide it. The first evolution of commerce appeared in the form of merchants who would consolidate “goods” from multiple suppliers and then trade on behalf of the collective. The deal would still be made in person and compensation would be in the form of equivalent goods. The second evolution happened around 1500 BC with the invention of money, which was easier to carry and collect than physical goods and allowed for a system of pricing against a common element rather than against diverse set of goods. People were now enabled to accumulate wealth in a form that allowed for postponing the consumption or acquisition of the goods. This new capability prompted the creation of retailers, which were the next evolution of merchants that would consolidate goods and offer them to people for money.

Defining multiple retail channels

Retailing was simple at its infancy, people would visit a merchant, identify a “good” they liked and pay for it with money. The first retail channel: the physical store was established. History continued its course and people started to realize that they did not necessarily had to go to the store to acquire the goods if they could start a way to send their buy request to the merchant and the merchant could deliver the goods to a destination of their choice. This process could be made more efficient if the merchant sent word/pictures/drawings and eventually photos of the merchandise in stock for the potential buyer to decide on what to acquire. The second channel: the catalog and “mail” order was established. Fast forward a few hundred years with the invention of the telephone and people no longer needed to write down their order, but could actually place a voice call to make an order. The third channel: the call center was established. A few decades later, another breakthrough in communication – the internet – made its debut and it was now possible to place orders using a computer. The fourth channel: the World Wide Web was established. Just a few years later, phones became small, portable and smart and it was now possible to place an order using a phone application. The fifth channel: the Mobile Phone was established.  Every new retail channel created new possibilities in retail and allowed new players to change the market dynamics and challenge the status quo.
Coming back from our trip in retail history, we now have 5 fairly unique & well identified channels or methods of acquiring a “good” from a retailer (Reference Figure 1).

Combined, these channels create a much more complex retail environment today than what existed in the time of our ancestors, when all the commerce took place face-2-face within the confines of a store or selling space.

Understanding the challenges of an Omni channel strategy

Today’s retailers realize that in order to compete effectively in the market place, it is not enough to have a well-defined strategy for a single retail channel, but rather they need to have an Omni-channel strategy that provides consumers a consistent experience no matter which channel they use to interact with the retailer. Given the diverse nature and different levels of maturity for each channel, this is actually much more difficult than it sounds.

Let us take a simple example of three consumers trying to buy a ceiling fan from a typical retailer today. One of them is using a computer, another is using a cellphone and a third one is calling the company’s sales line. From a consumer perspective, buying something from a retailer looks like a maze, if we could represent the experience of these consumers graphically it would look like the image to the left (Figure 2).
While every consumer will have a different experience, eventually people will achieve the same outcome of buying the fan, but the level of personalization, customer service and messaging will be different. This situation is compounded as the modern consumer does not limit him/herself to only one channel. There is a very big likelihood that he/she will start the interaction on one channel, put the transaction on hold and resume the transaction later through a different channel. The alignment of goals and strategy becomes extremely important in such situations. The retailer can no longer afford to outsource a channel without making sure the consumer experience is consistent with the brand and core messaging that the company stands for. Further, the customer expects to be recognized as an individual across any of the channel(s) they interact through and expect the same level of service that they are used to.

Business Intelligence: The enablement engine for a successful Omni-Channel Strategy

Without a doubt, an Omni-channel strategy has many challenges that require collaboration of many parties, internal and external to the organization. However, the most effective way to enable Omni-channel is through a solid Business intelligence strategy (Figure 3)

 Through the proper use of Business Intelligence an organization can achieve six core objectives central to the Omni-channel strategy:

1)    Single view of inventory: Business Intelligence allows the integration and more importantly provides visibility of the inventory available across all channels. This is probably the most critical feature of an Omni-channel strategy as the last thing a company can afford is to be sold out of a particular item on-line, while having plenty of inventory at its brick & mortar stores (or vice versa). If the product is available, the consumer has a right to know regardless of the channel they are using to interact with the retailer at that particular moment.

2)    360 view of customer:  Through Business Intelligence, organizations can fully understand how their customers interact with them through multiple channels. While the use of a single customer ID, provided by loyalty card or other marketing programs facilitates this analysis, it is not always required. BI can pull multiple data sources together, internal and external to the organization, to identify a customer using other methods (e.g. cookies on the website, masked credit card numbers, transaction patterns, etc).

3)    Alignment of HR and compensation metrics: Business Intelligence provides a platform for visibility and alignment across the HR & compensation metrics from the multiple units of the organization that support, maintain and operate each retail channel. By having a consistent HR and compensation strategy, organizations incentivize a consistent behavior towards the organization goals.

4)    Message unification: BI allows for the continuous measuring of the response to the company sales messages, establishing a common framework and understanding to standardize and unify the successful messages across channels and measure their relative performance over time.

5)    Channel transparency: BI enables the channel transparency experience by measuring customer satisfaction in a way that can be measured separately and consistently for each channel, thus forcing the experience to be equally good across interactions, regardless of the origin of the same.

6)    Immersive experience: Perhaps, the most critical element of an Omni-channel strategy is providing an immersive and superior customer experience. BI can assist the organization on this goal by making each channel owner accountable to the defined organizational metrics and provide alerts mechanisms when the experience for a customer is less than desirable across any channel.

BI truly provides an opportunity to get to know the customer and their preferences for interaction with the retailer to create a profile that can facilitate the personalization and customization of the consumer experience through any channel.


Omni-channel as a strategy is here to stay, if anything we will see more channels added in the next few years (e.g. a smart watch, or a dedicated virtual assistant that will do our shopping while we sleep). Successful retailers will need to adapt and provide a consistent, personable, channel transparent experience to the consumers. Business Intelligence will literally become the star of the organization providing an enablement engine across each and every interaction or touch point.

About the Author:


Noe Gutierrez is a Sr. Director at Cognizant Technology Solutions. He leads the Retail, Transportation and Hospitality teams within the EIM practice, a 13,000+ strong practice focused on helping Fortune 1000 companies to effectively leverage their data assets. Noe maintains a personal blog on: http://noegutierrez.blogspot.com/ and he can be reached at gutierrez.noe@gmail.com

Mobile BI: The next frontier in Business Intelligence


Over the last few years we have witnessed unprecedented changes in how the world lives, communicates and interacts. The advent of the internet has disrupted well established business models by enabling new channels to get information, shop and communicate almost instantaneously from any computer screen. In a matter of years email and the web went from being niche tools, primarily for academic institutions to being tools at the service of the entire population. Reuters estimated that the number of internets users would exceed 2 billion by the end of 2010. However, Reuters did not factor-in that the PCs would be outsold by mobile devices by 2011. As of 2012, there are over 1.2 billion mobile web users; with this number only expected to grow as more of the 5.9 billion mobile subscribers upgrade to smart phones (85% of the phones sold in 2011 were smart phones).
This new connected world has changed how consumers shop for products and services establishing the need for businesses to provide a consistent experience regardless of the channel – web, mobile, brick-and-mortar, telephone, email – which the consumers use to interact with the service provider. Many of these empowered consumers are taking their devices to work and expect their firms to provide support for these devices for them to perform tasks that require access to sensitive or secure company information. Further, companies are looking to leverage this new symbiotic relationship between individuals and mobile devices to provide their employees with enhanced information services that enable them to make better decisions regardless of location or access device. This need for information to be ubiquitous has created a discontinuity that many companies will have to bridge to stay competitive, the purpose of this whitepaper is to help these companies understand this new paradigm and ease their journey into the next frontier in Business Intelligence: Mobile BI.

Levels of Engagement in Mobile BI
As organizations start exploring this new frontier, they will begin by exploring the territory, mainly in the form of enabling mobile access to their existing BI implementations. The next step in the journey will be to start leveraging the very nature of the mobile platform for their employees to engage, collaborate and share. Mature organizations in the Mobile BI space will have mastered the new possibilities enabled by built-in mobile features such as GPS. The diagram below illustrates this concept and provides a better definition of the levels of engagement in Mobile BI.

1)      The porting of existing BI and Information Management capabilities so they can be accessed through a mobile device

Most companies start their inroads into Mobile BI by enabling the mobile access of their existing reports, dashboards and information querying capabilities. This is the fastest way to get started as there are many Commercial Off The Shelf (COTS) products that can be leveraged to Mobile enable the existing BI Infrastructure. This approach can help an organization achieve benefits faster by providing a simple, easy and intuitive way of navigating the information free from the limitations of a mouse and keyboard from any location where the mobile device gets connectivity.

2)      The establishment of mobile BI as a new platform to engage, collaborate and share

The next level of Mobile BI is tapping into the social nature of the mobile devices; the mobile devices were designed with the intention to enable communication and collaboration regardless of the physical location of the person. When these native concepts are applied to BI we start seeing new users accessing the system, being pulled in by other users in the context of discussing a revelation within the “aha! Moment“.

3)      The enablement of advanced BI features through Mobile (E.g. geo location)

The highest category of engagement for Mobile BI is the enablement of new use cases or applications leveraging the location awareness capabilities of today’s mobile devices. In addition to empowering users to take immediate action, these new capabilities enhance the experience by providing a default context setting for the BI applications. For example, if a user is visiting a particular store, the application would detect the location of the user and provide specific reports for that store when the application is opened.

Mobile BI: Paradigm Shift

Mobile BI demands a different approach and mindset in conceptualizing and executing BI solutions.

From: Traditional BI

The traditional paradigm for BI is centered on Reports and Dashboards that will be accessed through a web browser from a computer. The user will interact with these components using a combination of keyboard and mouse to identify the areas of interest that will most likely be eventually printed, emailed or downloaded in Excel format for further manipulation. Typically many reports require the answering of multiple prompts before the user can access the information and few very users will leverage all the advanced data analysis features that modern BI suites provide.

To: Mobile BI

Mobile BI still leverages reports and dashboards, but these are usually arranged following a story board. Because of the space limitations on mobile devices the information is segmented in screens that are linked between them, enabling the users to follow-up their thought process from generic to specific using a few “gestures” on the touch screen interface. Mobile devices have the benefit of having intrinsic/built-in features that enabled a more natural interaction with the BI application. For example the built-in camera that most mobile devices have today can be used as a scanner and quickly capture information from a bar code (rather than the user typing the UPC number), also the GPS feature can be leveraged to default the application to a particular view based on the most common view of the information from that location. Further, given the very nature of mobile, decisions can be made right on the spot; a big leap from a generation ago where the decision maker had to take notes and then wait to be in front of a computer to execute.

Evaluating the need for Mobile BI

While the advent of Mobile BI can bring substantial benefits to an organization, it can also be highly disruptive. The recommendation is for every organization to evaluate the readiness to start a Mobile BI roadmap, across three major perspectives: People, Process and Technology. The chart below illustrates some of the key questions that most be answered when planning to start on this Journey.

Defining a Mobile BI Roadmap

Once the organization has decided to start their journey into Mobile BI, there will be a need to create a roadmap that answer such questions as: What do we want to achieve, Where do we want to go with this technology? While these questions might seem trivial, there is a large number of companies which started their journey into Mobile BI, committing million of dollars in Mobile equipment buys, that had to put their initiatives on hold because they realized they did not have a strong business case.

Typically the best way to start the roadmap exercise is by identifying a business sponsor and aligning the Mobile BI strategy to their information needs. The next step will be to identify what technology (combination of device &  software platform) will be best suited to address the needs of the business sponsor. Subsequently, there will be planning and prioritzation exercise  to align people expectations and set the context of what can be realistically achieved given the timeline and program constraints.

Choosing the right Mobile BI Platform

The most critical technical element of the Mobile BI Roadmap is the selection of the Mobile BI platform. While there are many offerings in the market and at first glance, all of them seem similar, the recommendation is not to rush into a decision, but rather conduct a formal tool selection exercise, including a POC. The tool selection exercise needs to start with the definition and endorsement of the Mobile BI reporting requirements from Business Stakeholders.


Final Recommendations

The author hopes that this whitepaper has met its goal of assisting organizations to better plan their journey into Mobile BI. It is indeed a journey full of potential but also plagued with many obstacles that will test the most experienced BI practitioners. The possibilities enabled by the new advanced mobile technologies are indeed vast but the benefits will only be realized by aligning both business and IT to meet well defined organizational objectives. Welcome to the new Frontier and best of luck on your journey!

About the Author:

Noe Gutierrez is a Sr. Director at Cognizant Technology Solutions. He leads the Retail, Transportation and Hospitality teams within the EIM practice, a 13,000+ strong practice focused on helping Fortune 1000 companies to effectively leverage their data assets. Noe maintains a personal blog on: http://noegutierrez.blogspot.com/ and he can be reached at gutierrez.noe@gmail.com


Sunday, March 10, 2013

Motivating a Business Intelligence team, igniting the self-passion

Who does not want to be great? But, are you willing to pay the price? If countless hard work hours and sleeping nights come to mind then it means you are not committed enough. What drives the human spirit to go beyond established boundaries? The answer: motivation.

Motivation has existed since the beginning of the time, at it is basic level it is instinct. Our ancestors were motivated to survive, so they found ways to more effectively leverage their resources as a community, living in caverns to protect themselves from the elements, hunting together to get a bigger prey, etc. While motivation is indeed root to the human spirit, how is it that some people perform better than others? Are they faster, smarter, or more energetic? May be, may be not, but I can tell you that my experience dictates that the outcome of something is directly correlated to the motivation that we have to get it done.

Let us put it in our context, how many of you have been placed in a team to execute a Business Intelligence program and you felt like the people around you did not have the skills to make it happen? What happened to the project? Did it fail because a developer lacked the latest training in the ETL tool? Maybe your graphic designer used red extensively and he/she doomed the project in the eyes of management? Take a step back and analyze the team logically. How many of the team members were truly motivated for the program to succeed? And if they were motivated what was driving them: a bonus for completing the project, a promotion, visibility between their pears, or recognition from management? There are many external factors that might partially motivate or de-motivate a person, but nothing is as powerful as the person adopting the goal as its own. External motivation needs to get continually renewed and after a while you need more of it to get the person going, but once the goal has been owned by the individual nothing will stop him/her of getting to the finish line.

 So, how do we motivate someone to the level that the motivation can be self-sustaining? The answer is we don’t, this is a level of maturity that cannot be forced upon an individual but needs to be achieved on one’s own means. Does this mean that I as the project lead cannot do anything to motivate my people? Far from it, in fact the project lead has a unique responsibility towards the team of facilitating the achievement of self-motivation for each team member. In order to accomplish this, the project lead needs to understand his/her own motivations, why does this project have to succeed? What are the implications of not achieving the goal? As a project lead you need to make sure you yourself are motivated and identify the rationale behind. Needless to say that if you are not motivated, you should ask your management for a different assignment.

Next you need to recognize that everybody is motivated to different degrees by different external factors and what you consider essential might not be on the critical list for one of your team members. In a perfect world, you should know your team well and understand how they react to stimulus. In practice, most times, you will have no clue as there will be at least one (if not many) new members in your team. As such, it is your responsibility that the team understands the business goals of the project, what is the positive impact that the project will create for the company and paint the most vivid picture of accomplishing the goal.

The human spirit is relentless when searching for motivation; it does not take much to ignite the fire of passion in each individual triggering their need for contribution to a larger goal that will result in the benefit of the collective. In fact, think that you are not alone, millennia of evolution stands behind you; if not we would be still living in caverns and then you would not need to worry about the project.


Sunday, January 6, 2013

Finding your shining star

Dear readers, happy New Year 2013! I hope you have a prosperous year and all your Business Intelligence implementations are wildly successful. For my first blog of the year, I truly debated what to write about, many thoughts came to mind including wishes, resolutions and stars. Before you write off this blog as another piece of internet fallacy, let me connect the dots, you will be glad that you gave it a chance.

If you remember my last entry, it talked about achieving success and chartering your next endeavor by truly defining yourself. As my good friend Sigmund would say:  “one cannot define oneself in isolation, as we exist in relation to others”. Have you ever wondered why Bill Gates left Microsoft to focus on his charity work? History proves that there is only so much a person can achieve by amassing large amounts of money; at the end of the day we all feel the need to realize ourselves by helping others. True, this urge is mostly ignored and superseded by our daily routines but no human can achieve a full realization of the self without tending to it.

 Ok, I promised that this blog would lead to something and so I am getting to it. A successful BI implementation needs to focus on helping someone in the organization fulfill their needs. As simple as this conclusion reads, the great majority of Business Intelligence projects set out with a bang trying to install the latest platform, consolidate the most amount of data, demonstrate to the organization who has the information, etc. In other words, very self-centered goals around the project team or immediate sponsor.

In order for a project to be not only successful, but to transcend it must really fulfill a selfless destiny that will have a “social” impact. This impact would be felt within the organization helping a group/department to be leaner and more productive. More importantly, the project should also create an impact outside of the organization delivering value: a better customer service, and/or better products & services for the customers. Then and only then the project will have accomplished its corporate and social missions, literally making the world a better place.

If you made it this far, you definitively gave this blog a chance. I ask you to do the same with this philosophy, let the “shining start show you the way”. The next time you define a project, start with challenging the project team to look beyond the “corporate” goals and think how your project will impact team members, your internal clients, and your company customers. Establish a link between what you are delivering and the wellbeing of the larger group of stakeholders.  Once you have established this link you will realize that the team will approach the project with a different perspective, fully propelling each team member to give their best, knowing that by doing so it will make a tangible difference in the lives of people around them.