While analytic software has become more sophisticated in recent years, a new generation of these powerful tools is aimed at a broader constituency of business users, including marketing managers.
There are dozens of software packages that mine data repositories and present details on how a business is performing. Sometimes called analytics or business intelligence software, they aggregate data from disparate internal and external sources and display it in the form of customized views. The fashionable term for these views is digital dashboards.
Equipped with a digital dashboard, managers can check actual performance against a variety of benchmarks or can see which products are selling and who is buying. And, because digital dashboards connect to live data sources, such as sales transactions, managers can create reports with information that can help forecast or explain shifts in business performance. They can, for instance, study sales figures on a regional, product or customer basis.
The use of analytic software has increased steadily since the mid- 1990s, when providers of these tools started making it possible for employees to create and view reports over the Webâtypically on corporate intranets.
Now these tools are becoming more scalable, meaning they can run on multiprocessor servers. This makes it possible to gather more data and crunch more information in shorter periods of time than could be done previously. As a result, employees are able to develop their own queries and report on information relevant to their jobs. In many cases, these tools are providing answers in near real-time. For companies engaged in marketing campaigns, that means timely information that can provide the ability to react to sales trends in the middle of a promotion.
Market research firm IDC forecasts companies will spend $3.8 billion on analytic software this year and may spend $4 billion in 2004. IDC analyst Dan Vesset said the most noteworthy new capability in this software category is its improved functionality with Web browsers, which until recently had only a fraction of the functionality of the full Windows versions. (See vendor chart below.)
"When vendors migrated their Windows tools to the Web, they lost a lot of functionality because the Web infrastructures werenât robust," Vesset said. "But with the new releases they are nearly at parity."
Business intelligence tools come in various shapes and forms. Major software companies (such as IBM Corp., Microsoft Corp., NCR Corp.âs Teradata division and Oracle Corp.) have specialized repositories and tools of their own, though specialized tools from the likes of Business Objects, Cognos, Crystal Decisions, Hyperion, MicroStrategy and SAS Institute offer even more sophisticated forecasting and reporting capabilities.
Many providers of these systems have recently updated their products, boasting more functionality using Web browsers, improved ease of use and suitability for a broader population of users. For example, this summer, SAS Institute will release its new Business Intelligence Server. SAS predicts the product will boost use by 80%, thanks to simplified reporting tools and the ability to integrate with Microsoftâs widely used Office suite.
Already, many companies that market and sell goods and services to business customers are using analytic tools to track and note trends in sales to see where their marketing campaigns are working and where they are falling short. While CRM systems and campaign management software packages usually come with their own analytic capabilities, business intelligence tools can extract data from several operational systems and provide customized reports.
One user of analytic software for tracking b-to-b marketing campaigns is Milwaukee Electric Tool Corp., which manufactures items ranging from screwdrivers to gaskets, drill bits to heavy industrial machinery.
Because Milwaukee Electricâs customers vary so widelyâfrom traditional retail chains such as Home Depot and Lowes to industrial distributors who sell to construction companies and professional buildersâits marketing campaigns and rebate programs were hard to analyze.
Itâs not that the company lacked the data. Milwaukee Electric spent years deploying a business application software platform from J.D. Edwards, allowing the manufacturer to gather information on its distribution, financials, manufacturing, sales, marketing, purchasing, payables, receivables and manufacturing operations. But it wasnât enough just to have all that data; the company needed a way to bring it together, crunch the numbers and match trends.
"We produced a lot of data in a lot of different formats, but I donât know if we had a tool to sit down and analyze what the data meant," said Dennis Pfeil, Milwaukee Electricâs director of information services.
However, after the company deployed Hyperion Solution Corp.âs Essbase XTD Analytic Server and Customer Focus Suite, its marketing managers could understand the mix of products a specific customer group was purchasing and develop rebate programs to promote more sales.
At Cobe Cardiovascular Inc., which provides heart pumps and other devices used for cardiovascular surgery to more than 12,000 hospitals, a solution from SSA Global Technologies and Cognos helps predict shifts in customer demand.
Because delivery of Cobeâs products requires three to four weeksâ lead time, the ability to forecast demand is critical to maintaining satisfied customers. Before deploying the analytics solution, Cobe could deliver 95% of all orders on time. Since deploying the tools, that on-time rate has been pushed to 99%. "That can have a dramatic impact on the usage of our product," said Marsha Williams, Cobeâs CIO.
One company that has built a business analyzing data is Intellidyn, Bethpage, N.Y., a small company with large customers such as AOL Time Warner, JP Morgan Chase and Oak Street Mortgage.
Using software called Enterprise Miner from SAS Institute, Intellidynâs business analysts use their own repository of consumer data on more than 200 million U.S. households. The integrated decision support system provides performance management data that clients can use for marketing campaigns, channel management initiatives and overall risk management.
Intellidyn mines data for its clientele to help them measure the success of their b-to-b marketing efforts. For example, JP Morgan Chase wanted to find prospective business customers by mining the bankâs consumer credit cardholder accounts. According to Intellidyn founder and CEO Paul Harvey, its tools make it possible to analyze tens of millions of customers and identify which ones are business owners, what type of business they are in and which are the most attractive prospects.
Intellidyn is planning to provide Web-based access so businesses can determine their own benchmarks and perform analysis.
Still not easy
While analytic tools have become more scalable and Web friendly, they are hardly plug-and-play. These tools can give marketers better performance data, but not all can be linked to any campaign management suite, notes Mitch Kramer, an analyst with Patricia Seybold Group Inc.
"The linkage is not always there," Kramer said.
For example, Unica Corp.âs Affinium is optimized for Business Objectsâ analytic tools, and E.piphany Inc.âs CRM suite, E.piphany E.6, has its own analytic module but can leverage various third-party analytic applications, though integration may be required.
Meanwhile, Aprimo Inc., a supplier of marketing campaign management software, bundles Crystal Reports, an analytics package from Crystal Decisions, into its own software. "Our approach is we bundle Crystal, but we support other tools on a client-by-client basis," said Joe Meyer, Aprimoâs business development manager. "If they have a [business intelligence] package they prefer, they would use that to report out of our database."