In retail banking, for example, the

number of transactions across all chan-

nels will increase 9.9% through 2010,

according to the Tower Group’s 2007 Web

seminar “Going from ‘In Line’ to Online:

Transaction Migration in the U.S.” By 2010,

40% of transactions will be on the Internet,

with 23% to the call center and 19% each at

a branch or ATM.

Internet use is not limited to PCs. “Online”

increasingly means mobile phone connectiv-

ity via Web access protocols (WAPs), which

accommodate phone screen sizes. The con-

tinued growth in mobile phone sales—now

at 3 billion—along with WAP capabilities

means continued unprecedented growth in

the number of Web transactions. The latest

technologies let users download custom cou-

pons and boarding tickets, as well as transfer

money—mobile cash—onto their phones.

Smarter Web systemsThe Teradata depiction (see figure, page 49)

of the decision-making maturity continuum

can be adapted to highlight opportunities to

use enterprise information and insights to

make Web systems smarter.

Stages 1-3 show how the enterprise data

warehouse (EDW) is used to develop strate-

gic insights. Stage 1 might include reports on

how many people are using the Web, when,

and how much product they buy. Another

report might show the number of customers

who are “lookers” versus “bookers” and how

many “lookers” are buying at a store instead

of online. Other examples are scoreboarding

The growing importance of the Internet requires an Active Enterprise Intelligence approach. by Dave Schrader

Change the

Of all the “active” channels

to customers, the Web is

growing the fastest. Approximately

1.4 billion people, 21% of the

world’s population, are now

online, according to www.

internetworldstats.com, a site

that tracks Internet usage and

population trends. Web use ranges

from 73% of people in North

America to 5.3% in Africa; about

half of Europe is connected.

Transaction volumes are rising on

every channel; however, the mix

of use is changing, with the Web

channel growing the fastest.

Web Channel

PAGE 1 | Teradata Magazine | September 2008 | ©2008 Teradata Corporation | AR-5716

reports of internal operations, such as which

packages are at risk of missing guaranteed

delivery deadlines or how many widgets are

being produced per hour.

Stages 2 and 3 focus on using the data

warehouse with business intelligence (BI) and

Web analytics packages to do ad hoc and pre-

dictive analysis of customer activities, includ-

ing Web browsing. By capturing click-stream

sequences in the EDW, an organization can

see the history of each customer’s interac-

tions. The tools can be used to spot where

dwell times are highest—perhaps because

individuals are reading about products of

interest—or analyze where they might be get-

ting confused and bailing out. These insights

might be used to drive Web site redesigns.

In Stage 3, organizations use predictive

tools like SAS and KXEN to build models of

customer segments and their cross-channel

activities, to provide answers to various ques-

tions: What is the next best product to offer

based on up-to-the-moment store purchases

when the customer returns to the Web site?

Does this customer have a high propensity

to churn, based on clues from Web-browsing

behavior, like looking at new call plans?

By conducting pricing experiments on the

Web, an analyst might build price elasticity

insights—at what price this customer seg-

ment will buy online.

Stages 4 and 5 concentrate on the use

of these strategic insights to improve

front-line, operational systems. Such

insights can be applied to improve real-

time, tailored variations of the Web for

each customer:

> Customized Web screens. Provide

recommendations on custom advertis-

ing in one portion of a home page for

the next best travel deal, an invitation to

a free wealth management consultation

on a financial Web site or a suggestion

pop-up to switch to lower-priced generic

drugs on a healthcare site.

> Customized sequence of Web screens.

Add “decision points” based on insights

ABN AMRO, an international bank and insurance company

with 19.8 billion euros in revenues in 2007, uses its data

warehouse for strategic insights and drives those insights into

Web operational systems.

A typical application involves customized Web

advertising. At any time, the marketing group has 50

advertisements ready to display on the home page

when a customer or prospect comes to the site. The question is:

Which offer should be made to each customer? Using a call-out to

its Teradata system from the Web engine for guidance, ABN AMRO

displays the best-suited ad within two seconds. With 175,000 Web

sessions per day, the result is 63 million personalized offers per year.

Does it pay off? A typical non-targeted bank ad achieves a

0.2%, or 1 in 500, click-through rate. But by

applying better insights, ABN AMRO reports

click-through rates of 1.1% to 5.5%, resulting in

purchases of additional bank products. And a

bonus from their disciplined approach to next best offers is that

the same insights are reused on call center agent screens.

—D.S.

Decision-making maturity continuum

The decision-making maturity continuum highlights opportunities to develop and apply insights, in this case, to the Web.

ABN AMRO

PAGE 2 | Teradata Magazine | September 2008 | ©2008 Teradata Corporation | AR-5716

to enrich the customer experience

with greater depth and relevance. For

example, instead of a telco home page

providing lists of all available prod-

ucts, the Web rendering engine might

use insights to trim it to service pages

for the products a customer already

has, coupled with sales pages for only

the products that person is most likely

to buy.

In the Web world, most companies

have built standardized portals, often

three—one each for customers, partners

and internal employees. The focus is on

widening simple information access and

using the insights to drive context-aware

sequences of Web pages that anticipate

what users are trying to do based on roles

or personas. The system uses current data

about the customer (Where is the person,

perhaps based on GPS feeds or ATM loca-

tion?) along with historical context (Have

we seen this situation before?) and system

state/optimization rules (What can we do

to optimize this customer’s experience?).

An example from the airline industry is a

passenger missing a connection. The airline

knows the passenger is on the first leg of

a trip and that a flight delay will prevent a

planned connection. It knows whether the

individual is en route on the plane or wait-

ing to board. It also knows the rest of the

system’s status, so it can construct alternate

connection plans. Additionally, the airline

is aware of the value of this particular cus-

tomer and the likelihood that the person

will defect because of other recent incidents

like lost bags or canceled flights. When the

plane lands and the customer accesses the

Web via a mobile phone, an “active” airline

would make the first Web screen be the

contextually most relevant one. In this case,

“Your revised travel options” might appear

first on the WAP page.

Making it happenAs Web use grows, it’s more important

than ever to drive projects that connect

data-derived insights to your online chan-

nels. But what will that take?

An Active Enterprise Intelligence approach

works only if you can forge the right triad

of application architects, operational system

owners and database administrators (DBAs),

coupled with a change agent who sees

the opportunities generated by your data

warehouse investment. A DBA can start

by educating the owners of the Web, then

participating with corporate architects in

building a company-wide, customer-centric

vision of how to use and reuse information.

With business groups, you might need

to foster a “customer dialogues” project,

working with your customer relationship

management team leaders and BI users,

and possibly a governance committee. This

ensures that customer insights are captured

in one place, documented and systemati-

cally reused across various channels and

departments for competitive advantage.

Finally, “making it happen” requires

good project management skills, because

cross-organizational projects are difficult to

direct. But with focus and persistence, you

can activate the Web channel with deeper

insights, resulting in wider use of your data-

base investment, as well as fostering better,

more consistent customer experiences. T

Dave Schrader is director of Strategy and Active

Enterprise Intelligence Marketing for Teradata.

A prime example of operational use of the Web

comes from Norfolk Southern Corp. (NS), a

$9.4 billion-per-year railroad company. More than

three years ago, NS was looking into helping the

power users help themselves faster. Wider sets

of users—internal front-line groups as well as more technologically

savvy business partners—needed access to up-to-date and histori-

cal information about shipments by themselves without waiting

for NS to help. The approach taken by Blair Hanna, manager of

e-commerce, and Mark Wittl, manager of customer applications,

was to build a Report Wizard, with access to more than 125 fields of

information so that users could modify existing reports or easily build

their own. The philosophy was “Serve yourself,” anytime, even at 3

o’clock in the morning!

It worked. Expanding access to information led to wider use

of the Teradata system, with more than 12,000 customers now

using the accessNS Web portal. In addition to

the 1,900 standard reports that NS Support

provides to more than 30,000 users each week,

users themselves created 9,500 variations of

the reports and 4,400 new reports. They can set

run schedules and delivery options for their reports. The system

holds 8TB of data, with 4TB of user data. Various data elements

are refreshed at different rates—by the minute, hour, day, week or

month—depending on the business needs.

“The users love it,” Hanna says. “It takes most business users only

five to 10 minutes to customize their reports, and sometimes new

users never even need to contact us at all while creating their own

reports.” New Web reports, created by NS Support, are typically

built in a half-day or day, depending on the complexity. These capa-

bilities definitely improve the ease of doing business at NS.

—D.S.

Norfolk Southern

PAGE 3 | Teradata Magazine | September 2008 | ©2008 Teradata Corporation | AR-5716