august2011 volume9 enterprise...

ENTERPRISE CIO DECISIONS • AUGUST 2011 1

INSIDE

Want BIBuy-in?Buy a Tablet

One on One:Innovatinga BetterBI Strategy

An IntelligentApproach to BI

Cloud-BasedBI: A FasterSolution

TransformSocial MediaInto CustomerIntelligence

Follow theCrowd …Computing

AUGUST 2011 VOLUME 9

BusinessIntelligence:DataMiningDone RightEmerging technologiesare revolutionizingenterprise data collectionand analysis strategies,and CIOs are leading thisBI brigade.

EnterpriseCIODecisions

Guiding technology decision makers in the enterprise

I TAKE IT as an axiom of the moderncorporation that each departmentbelieves it’s the most essential partof the company. The marketers sayeverything depends on the mar-keters; the same goes for sales,operations and, of course, seniormanagement. They are all correct,of course, but only as links in achain.

In IT, that self-image can be fur-ther broken down into its compo-nent parts: The company could notfunction without the storage, net-working and security personnel. Butnone, I believe, has a better casethan business intelligence (BI). Afterall, what is it that the original com-puter scientists all the way up tocurrent CIOs have demanded fromtheir technology? Information aboutdata.

In this edition of Enterprise CIODecisions Ezine, we take a look at thelatest trends in business intelligenceand find that BI holds more cardsthan ever in the success or failure ofa business. As SearchCIO.com con-tributor Niel Nickolaisen writes. BI isall about making better decisions. Inturn, better decisions directly andclearly enable the development ofstrategy.”

Two trends stand out as BIevolves. One is social media, which

will have a huge impact in comingyears due to the large amounts ofdata generated from those plat-forms. Social media has become a“megaphone [that] poses both achallenge and an opportunity to pro-fessionals who work with customerintelligence,” writes contributor Elis-abeth Horwitt. It gives them accessto a rich, constantly updated troveof customer insights. … [but] thatgood stuff is buried in vast quanti-ties of irrelevant and dubiouslysourced material.”

The second trend is, naturally, thecloud. As business intelligence databecomes Big Data, cloud technolo-gies are emerging to help captureand analyze BI without requiring aninfrastructure overhaul.

In the end, it may not be businessintelligence that’s the key to suc-cess, but all of the things that enableit. And that means everybody. �

SCOT PETERSEN

Editorial DirectorCIO/IT Strategy [email protected]


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1 EDITOR’S LETTER

BI: The Key to Success

E

mailto:[email protected]



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1 NEWS, VIEWS AND REVIEWS FORSENIOR TECHNOLOGY MANAGERS

UpFrontNews, views and reviews

for senior technology managers

OONN TTHHEE JJOOBB

want BI buy-in? buy a tabletDEMOCRATIZING business intelli-gence software is the anthem of theindustry—and the rallying cry of lotsof BI stories. Users can become mas-ters of their own dashboards! But—nobig surprise—the slogan doesn’talways match reality.

“Adoption is still the weak link,”according to Gary Gallant, vice pres-ident of Coty Inc.’s global applica-tions center of expertise, as well asBI point man for the New York-based perfume manufacturer.”What we are trying to do with BInow is build some prototypes togive to leadership so they can get abetter feel for BI, because what wehave now is, ‘Well, what do I do witha dashboard?’”

Indeed, many BI pros know thatthe widespread adoption of BI tools

by the business awaits the rise ofthe digital natives in corporate man-agement. In the meantime, Gallanthad an interesting suggestion forbringing the “cool” factor to BIreporting for the C-suite: Forget thelaptop and get your CEO an AppleiPad.

“I do think the iPad has the abilityto change things,” Gallant said.

Part of what prevents CEOs andother C-suite executives from reallyliving with business intelligence, heexplained, is the physical barrier ofhaving to reach into the computerbag, lug out the laptop and wait forit to boot up.

“The time it takes you to get toproductivity—they just don’t do it,”he said.

The BlackBerry screen is too smallto see results on. But the iPad? “Itgives you landscape to look and drilldown,” Gallant said. “Plus, anythingconnected with Steve Jobs has sexappeal.” —LINDA TUCCI

UF

OONNEE OONN OONNEE

innovatinga better BI strategyNAME: Atefeh RiaziTITLE: CIOTIME IN THIS ROLE: Two yearsORGANIZATION: New York City Housing AuthorityHEADQUARTERS: New YorkEMPLOYEES: 13,000

Atefeh Riazi, CIO of the New YorkCity Housing Authority, presidesover the nation’s largest such entity,with 2,300 buildings that providepublic housing for more than400,000 New Yorkers. She saysshe’s a big believer in gut instinctbut, when it comes to IT and busi-ness alignment, she’s convincedthat intuition must give way to decisions based on business intelli-gence—and predictive analytics in particular.

Riazi uses business intelligenceand predictive analytics to chal-lenge—as she puts it—”urban leg-ends and sacred cows” of publicassistance programs. Everything—from how best to reduce operatingcosts and increase building efficien-cies to which investments will actu-ally improve the quality of life of theauthority’s residents—is beingexamined with BI and predictiveanalytics tools.

How do you weigh the costs and benefits of IT innovation as part of your job?That is a complex question, and I think it changes with time, theeconomy and the environmentaland political situations. You know, Ialways think of a CIO as someonewho is a mix of a Kamikaze pilot, aChurchill and Mother Teresa. So,

depending on where the organiza-tion is, where your customer is,where your competitors are andhow your product offering is, youchange your approach to innovation.

I think, historically, we havethought that innovation is makingbig things, completely transformingthe business, and, as a result, weforget innovations—smaller innova-tions—that can have tremendousresults. So I think and I believe theCIOs who are transformational andcan help the business grow and


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1 NEWS, VIEWS AND REVIEWS FOR SENIOR TECHNOLOGY MANAGERSUF

“We have thoughtthat innovation ismaking big things,completely trans-forming the busi-ness … we forgetinnovations—smallerinnovations—thatcan have tremen-dous results.”

increase margins and improve cus-tomer service, improve the relation-ship between the agency or thecompany and its customers, are theones who look at the way the busi-ness is done and try to transformthe way the business is done. And iftechnology has a role to play in thattransformation, that is terrific, butultimately it is thinking outside thebox and bringing new ways of work-ing, taking time and cost out ofprocesses.

You know, there is a CIO paradox.We used to think that our job wasabout technology, about hardware,about deploying software. Today, weknow that it is not about that. It isthe experience of technology and the

way it makes the business becomemore robust. So, we are in a differ-ent business. We are kind of mov-ing, I would say, from the left-brainCIO to the right-brain CIO, and youhave to really be transformationaland innovative. Without it, I thinkthat the future of the company andstakeholders is at stake.

You brought up two issues relatedto IT innovation. One is the neces-sity of thinking outside the box.What does that actually require ormean for a CIO? And the otherquestion is your point about deliv-ering on an innovation, and howthat requires bringing a spectrumof people to the finish line, from the


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OONN TTHHEE AAGGEENNDDAA

TRIMMING THE FATDo you plan to consolidate your BI tools in the next five years?

pppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppppp

47%No, we have

no plans to changeanything

29%Yes, we plan to consolidate on one BI platform

24%Yes, we plan to consolidate on 2-3 applications

SOURCE: 2010 BUSINESS INTELLIGENCE CHALLENGES AND PRIORITIES SURVEY OF 255 IT AND BUSINESS PROFESSIONALS, SEARCHBUSINESSANALYTICS.COM.

enthusiasts to the doubters.So, thinking outside the box is ourjob—it is what we are required to do.As a CIO, your job is deploying inno-vative tools, using innovative tools,to do the business differently than itwas done before. Now, if the organi-zation doesn’t have the stomach forit—and many organizations don’t—what you end up doing is computer-izing an old process. And when youcomputerize an old process, you’vetried to think outside of the box,[but] there is a great deal of resist-ance that comes from the businessthat says, “You know, I like the way Iwork and I don’t really like the newway of working.” So, that kind ofidea dies a quick death.

Now, I mentioned power. Theproblem we have as CIOs or IT pro-fessionals is that we think when itcomes to the power play in theorganization, we think the organiza-

tion itself is a rational organization,but most organizations are political.We also think power—and if youlook at the power quadrant, we only

play in a small segment of thatquadrant, which is the expert power.So, we are the experts in technolo-gy; we know what we are going todo and we are going to deliver it.


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BBYY TTHHEE NNUUMMBBEERRSS

the data integration plagueData quality and data integration challenges are two of the biggest

problems plaguing enterprise BI initiatives. In a SearchBusiness-

Analytics.com poll,44% of respondents said data integration

would be one of their biggest BI-related challenges in the year ahead

—an increase from just23% a year earlier.


“The problem we have as CIOs or IT professionals is that we think ….the organization itself is a rational organization, butmost organizationsare political.”


But if you look at the power quad-rant, there are different aspects ofpower as a C-level professional—itis persuasive power. So we have a

great strength in awareness, muchless sophistication in persuasion.That is something we have to build.Because now you have come upwith an idea, you have kind ofshown where nirvana is in terms ofhow wonderful business is going to

be in taking cost out, but you gottatake everybody with you. It is yourresponsibility as a C-level executiveas much as the business’ to drivethe change. And some CIOs think,“No, it is just my job to drive thetechnology.” You can’t do one with-out the other.

So, you have to play in a full powerquadrant—even the power of fearand hope, where you force theorganization to move forwardbecause, without it, many organiza-tions are going to be asleep. So youhave to play the power quadrant,and you have come out of this mind-set that power is bad. When you arein management, the power is givento you, and if you don’t use thatpower properly, you are not doingyour job. And the power is to deliverthe best for the customers and toimprove your business.—L.T.


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WHAT’S THIS?

Business intelligence competency center (BICC):A TEAM RESPONSIBLE for managing all aspects of an organization’s businessintelligence (BI) strategy, projects and systems. This includes developing aBI strategy; implementing BI tools, applications and training; and supportingthe business users who rely on them. BICCs are commonly created as part of,or directly following, a major BI initiative to consolidate multiple, disparatedata sources into a single data mart or data warehouse. One of the key func-tions of a BICC is to help corporate executives and business managers betterunderstand the potential benefits that BI can provide in managing businessoperations. —WHATIS.COM

“When you are in management, the power is given to you, and if youdon’t use that power properly, you are not doing your job.”


A LONG, LONG time ago, I attemptedto distill the role of IT down to anice, concise motto. It took severalyears, a host of good and bad expe-riences, and several iterations, but Ithink I finally did it: IT has two, inter-dependent roles: to enable strategyand to achieve operational excel-lence.

This motto helped me crystallizehow I approach business intelli-gence (BI) strategy. To me, BI is allabout making better decisions. Inturn, better decisions directly andclearly enable the development ofstrategy. Here is my rationale:

The essence of strategy is com-petitive advantage, according toMichael Porter, one of the most-admired gurus of business strategy.So, if one of their roles is to enable

strategy, CIOs should directly sup-port the ways their organizationscreate and maintain competitiveadvantage.

One way to create competitiveadvantage is to consistently makebetter decisions—about products,markets, operations, customers andso forth—than our competitors. Bet-


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1 AN INTELLIGENT APPROACH TO BI

An Intelligent

ApproachtoBI For CIOs looking

to make better decisions about products, markets, operations and customers, the right BI strategy

is vital. BY NIEL NICKOLAISEN

BI is all aboutmaking better decisions. Betterdecisions directlyand clearly enablethe developmentof strategy.

ter decision making is the key func-tion that, if we take the rightapproach, BI can support in ourorganization.

So, whenever I start to ponder a BI project, I put the project into thecontext of better decision making. Iask myself and the organization twoquestions:

� “If there were no barriers, whatdecisions would you like to be ableto make?”

� “What information would youneed in order to make thosedecisions?”

The answers to these ques-tions help us avoid the trap ofconfusing BI with reporting and,thus, thinking that BI isowned by the IT depart-ment. Rather, BI is aboutbetter decision making—and that is the role ofdecision makers. Our roleis to provide the tools forbetter decision making.

Taking this decision-making approach to BIsets the right attitudebut does not by itselfguarantee success. Toreally make sure thatwe get BI right, there aretwo more things I like to do:

� Start small. Often, design-ing BI around decision mak-

ing involves a seismic shift in think-ing that can be daunting for theorganization. Decisions implyaccountability. What happens if wearen’t sure we are up to the task? Toovercome this, I like to start small—sometimes really small, beginningwith targeted prototypes and pilots.

For my pilots, I enlist either thegroup that is the most willing to try(then support) new things, or thegroup that is in the most pain. Wework closely on the decisions thegroup would like to make and on theinformation it needs to make those

decisions. We then select a sub-set of these decisions as ourtest case. We design our BI andthought process to support justthese decisions. Once we have

confirmed that thingsare better, we moveonto the next subset,or pilot group.

This prototype-pilot approach pro-vides the addedbenefit of helpingto justify theinvestment. Often

the benefits ofimproved decision

making can be difficultto quantify, and the

process is little more thanguesswork. By doing pilots,however, we can keep the


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oNiel Nickolaisen, VP of strategy and innovation, EnergySolutions Inc.

project small while we prove itsbenefits through the results the pilotgroup achieves.

� Think about the perfect future. Apersistent issue in designing for bet-ter decisions is the feeling that weare limited by either technology oraccess to the right information. Isolve this by basing my BI designson the assumption that, at somepoint in the future, both businessintelligence technology and accessto information will be perfected. Aswe envision without any limitationsthe decisions we could make, our BIdesign will anticipate the technolo-gy and information as they becomeavailable.

Taking a decision-centricapproach to BI helps me generateamazing value. In one case, wewanted to make better decisionsabout new product development.We asked ourselves which informa-tion we needed to make better deci-sions. Then we gathered informa-tion outside our transactionalsystems so that we better under-stood our customers’ needs. That, inturn, improved our customer rela-tionships.

In another case, we wanted tomake better decisions about inven-tory and supply chain management.As we looked for the information

that would improve our decisionmaking, we exposed several infor-mation gaps. In filling those gaps,we identified process improvements

that more than paid for the BI toolswe implemented.

In a final case, we designed our BIsystem anticipating that we eventu-ally would know the location of ourretail customers. That way, whensmartphone technology came to thefore, we were ready to use the data.We had already thought throughwhat we would do when locationinformation became “perfect.” �

Niel Nickolaisen is vice president of strategy andinnovation at EnergySolutions Inc. in Salt LakeCity. Write to him at [email protected].


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As we envisionwithout any limitations the decisions wecould make, our BI design will anticipate thetechnology and information asthey becomeavailable.


JUST HOW MUCH ketchup is a restau-rant using? Is it time to offer thecrab-cake special? These are thekinds of questions successful restau-rant managers have to ask. Beingable to get answers quickly and eas-ily can make all the difference in thehighly demanding restaurant busi-ness, where the margin betweensuccess and failure is often thinnerthan a slice of Carpaccio.

Distribution Market Advantage(DMA) in Schaumburg, Ill., is dish-ing up a helping of cloud-basedbusiness intelligence (BI) for itsrestaurant customers. For Jim Sza-tkowski, vice president of technicaland data services at the marketing

cooperative for food distributors, acloud-based solution was a muchbetter choice than an on-site sys-tem, which would have required acostly and time-consuming projectto get up and running.

“Supply chain professionals atmember companies can look attheir spend. They may want tonegotiate a new deal with a supplier.They may want to know how muchketchup they have consumed,” Sza-tkowski said. “When a restaurantprovides a limited-time offer, themanager needs to know that thefeatured product is availablethroughout the campaign. We pro-vide visibility daily into product


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2 CLOUD-BASED BI: A FASTER SOLUTION

Cloud-based business intelligence can deliver results like those from an enterprise BI system—faster.

BY STAN GIBSON

CLOUD-BASED BI:

AFaster Solution

movement. They can see what’savailable at all times.”

A cloud-based BI applicationmade sense to DMA because,despite the organization’s size andnational scope, Szatkowski had noappetite for a complex and expen-sive BI project. “We wanted to stayfocused on food-service distribu-tion.”

After examining several cloud BIservices for DMA, which services 11regional independent food distribu-tors and claims $3 billion in membersales, Szatkowski chose a cloud-based BI application from PivotLinkCorp. San Francisco-based PivotLinkis one of a number of small vendors(among them, Oco Inc. in Waltham,Mass., Birst Inc. in San Franciscoand Indicee Inc. in Vancouver, B.C.)offering these applications.

CLOUD-BASED BI ADOPTIONBeing able to get a BI application upand running quickly was critical toImperva Inc., an Internet securityappliances vendor in RedwoodShores, Calif. “Rather than treatbusiness intelligence as a big-bangprocess that would take time andcost a lot of money to roll out, wehave launched bite-size projectsthat take weeks versus months toroll out,” CIO Grant McCormicksaid. He is using a cloud-based BIapplication from GoodData Corp. inSan Francisco.

“GoodData allows us to approach

BI in a targeted manner, and deliverpoint solutions to those people whoneed them. Each unique project tapsinto a new set of data, and goes to anew set of users. We pay as we go. I

much prefer spending money thatway,” McCormick said.

Imperva is rolling out a cloud-based finance and ERP system, andhas several projects in the worksthat rely on GoodData technology.In one application, the vendor hascreated a commission summarystatement as a GoodData dash-board for each of its 150 salespeo-ple. Another application enablesmanagers to measure results


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“Rather than treat businessintelligence as abig-bang processthat would taketime and cost a lot of money to roll out, we havelaunched bite-sizeprojects that takeweeks versusmonths to rollout.”—GRANT MCCORMICK, CIO, Imperva Inc.


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against plans. Still another project isa competitive dashboard that pullsdata from both an on-premises sys-tem and cloud sources.

BI FOR THE MASSESThe cloud also is bringing the bless-ings of BI to nonprofit organizations,which in many cases have lackedthe resources for such sophisticatedapplications until now. Convio Inc. inAustin, Texas, provides marketingservices including cloud-based BIapplications to nonprofit organiza-tions.

“One of the things we like aboutthe cloud architecture is the notionof elasticity. That’s important in BIapplications. The ability to scale upand down quickly helps save money.That’s very important to nonprofits,”said Convio CTO Dave Hart. “We’reable to create affordable solutions.And we’re bringing technology tononprofits that was previouslyunavailable to them.”

Convio’s BI application will inte-grate Force.com, the Platform as aService offering from Salesforce.comInc., with Convio servers and serversin Amazon Web Services’ ElasticCompute Cloud. “The applicationmakes sure data is stored in themost appropriate place. It featuressingle sign-on, so the user is notaware of where the data is comingfrom,” Hart said.

The ease with which a cloud

application can be accessed andpaid for is enticing some businessusers to bypass their corporate ITdepartments. “That is one of themost hidden trends and the mostinteresting,” said Boris Evelson, ananalyst at Forrester Research Inc. inCambridge, Mass. Managers arejumping the gun because waiting toget results from a corporate BIapplication might cause them tomiss an opportunity.

Still, enterprises shouldn’t replacetraditional BI applications with adhoc cloud BI applications, Evelsoncautioned. “If it’s a mission-criticalback-office application, you can’treally afford to let it out of yourcompany. That’s probably not agood candidate for BI in the cloud.”

Even so, if an organization oper-ates globally, a cloud-based applica-tion can deliver better performanceworldwide than a premises-basedapplication.

“If we went with client/server, wewould have had to choose where toset up the server,” Imperva’sMcCormick said. His company’scorporate headquarters is in Califor-nia, and its engineering offices are inIsrael, so performance could havevaried greatly between the two loca-tions. With a cloud-based service,however, performance is acceptablein Israel, even though the cloudprovider is in the U.S., he said. �Stan Gibson is a Boston-based contributingwriter. Write to him at [email protected].


INTUIT INC. DIDN’T expect any major customer pushback when itannounced in 2008 that the newversion of TurboTax would limit thenumber of tax returns per installa-tion and add a modest charge foreach additional tax return prepared.

The tax preparation software firmhad gathered plenty of customerintelligence via polling and researchbefore it decided on the changes.“Few customers were doing morethan one or two returns with the soft-ware, which after all was designedfor consumers, not professional pre-parers,” said Brian Andrews, Intuit’svice president for customer experi-ence and business excellence.

What Mountain View, Calif.-basedIntuit didn’t take into account, how-ever, was the power of social media

as a consumer soapbox. A few veryvocal customers posted furiousmessages on such blogs as Canadi-an Capitalist and forums such asRekords Rekords. Reviews on Ama-zon.com gave the new version justone star. “It was clear our ability toeffectively message our changewasn’t working, so we quicklyreversed our decision. We sacrificedmillions in revenue in order to pro-tect and foster our reputation as acustomer-centric company,”Andrews said.

Depending primarily on word ofmouth to sell its products, Intuit hasbeen a voice of the customer (VOC)pioneer since it was a two-personstartup nearly 30 years ago, Andrewssaid. Now, however, “word of mouthis even more important, because

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3 TURN SOCIAL MEDIA INTO CUSTOMER INTELLIGENCE

Sentiment analysis tools are creating a kind of customer intelligence that online marketers are finding

beats traditional market research. BY ELISABETH HORWITT


TurnSocialMedia into

Customer Intelligence

social media sites like Yelp, Face-book and Amazon have given cus-tomers a megaphone.”

CUSTOMER INTELLIGENCE: PLUSES AND MINUSESThat megaphone poses both a chal-lenge and an opportunity to profes-sionals who work with customerintelligence. On the positive side, itgives them access to a rich, con-stantly updated trove of customerinsights. On the negative side, thatgood stuff is buried in vast quanti-ties of irrelevant and dubiouslysourced material. And as companieslike Intuit have discovered, time is ofthe essence when it comes to zero-ing in on and responding to negativeposts and taking action before theygo viral.

Intuit uses Radian6 Insights, oneof a large and growing body of serv-ices that monitor social media forcustomer posts and analyze themfor relevance and sentiment, thencategorize the data by such factorsas influence, sentiment, geographiclocation and topic. End users canthen access the results and do fur-ther analysis via a so-called socialdashboard.

Intuit is in good company. Duringthe past few years, according toJames Kobielus, a senior analyst atForrester Research Inc., customersupport, sales, marketing and repu-tation managers have been trawlingthe Web for answers to such ques-

tions as: How do they feel about usand our products? Do they have astrong propensity to become or stayour customers or buy something?Initially, this search was a time-con-suming manual task that often pro-duced inconsistent results.

Now, however, much of the gruntwork has been eliminated by such

service providers as BuzzMetrics(now part of The Nielsen Co.),Crimson Hexagon, Cymfony Inc.,MediaMiser Ltd., NetBase Corp.,Radian6 (now part of Salesforce.com Inc.), Scout Labs (now part ofLithium Technologies Inc.), Synthe-sio and Wise Window Inc.

WARNING SIGNS OF NEGATIVE PRThe customer intelligence providedby such services can be used tomeasure the success of ad cam-


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As companies like Intuit havediscovered, time is of the essencewhen it comes tozeroing in on andresponding to neg-ative posts andtaking action be-fore they go viral.

paigns while they are happening,assess customer loyalty, addresscomplaints and improve consumers’experiences. Customer intelligencecan also help identify product glitch-es and public relations problems—ideally before they go viral or hit the

mainstream press.Canada Post Corp., for example,

uses MediaMiser’s hosted platformto analyze its media coverage, whichlast year amounted to about 12,000articles, according to Anick Losier,director of media relations at thegovernment-owned national mailservice. This helps the organizationrespond more effectively to negativecoverage, she said.

When several unflattering articlesabout Canada Post recentlyappeared in the press, Losier figuredthe likely source was “our very vocalunion,” which she said is a commoninstigator of negative coverage.After she used MediaMiser to ana-lyze the articles, however, she dis-covered that it wasn’t the union thathad called the media this timearound, but a member of Canada’s

parliament (MP). She then alertedmanagement to the need to talkwith that particular MP.

Losier’s group also uses the plat-form to check out such social mediaas Facebook and Twitter “every halfhour, every day,” she said. This oftengives the team an earlier heads upabout customers’ attitudes andwhere the media (other than tradi-tional outlets like TV and newspa-pers) is going with a story, sheadded.

TRACK INTERNAL CUSTOMER DATASentiment analysis of online mediais catching on in the financial andinvestment sectors as well. Thom-son Reuters Canada Ltd.’s MachineReadable News and Dow Jones &Co.’s Lexicon services provide senti-ment analysis of their own financialreporters’ coverage. Deutsche BankAG’s Global Equity QuantitativeStrategies Group uses the ThomsonReuters service to enhance the ad-vice it gives institutional clients aboutportfolio management strategies.

“Sentiment is only a tiny fractionof the data we use, which includesevery trade and is on the order ofgigabytes,” said Rochester Cahan,vice president at the Deutsche Bankgroup. A recent simulation study bythe group found that using the serv-ice significantly improved yearlystock portfolio returns, he added.

Often, corporations get into senti-


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Sentiment analysis of onlinemedia is catchingon in the financialand investmentsectors as well.

ment analysis when one group ofpublic relations, investment orbrand managers signs up with asocial media customer feedbackservice. The potential problem isthat such deployments constituteinformation silos, with little or nosharing of insights with other organ-izations, said Bruce Temkin, a man-aging partner at Temkin Group.

Such services, furthermore, andtheir software tools and the datathey collect historically haveremained separate from more tradi-tional systems for collecting andanalyzing customer data, such ascall center platforms, customer rela-

tionship management software, sur-veys, market research and customeremails.

For an enterprise to exploit senti-ment analysis fully, “IT needs to takean enterprise view of text mining,and not treat social media contentas an isolated thing, but as one typeof unstructured [customer feed-back] data” to be collected, ana-lyzed and disseminated to differentgroups according to their needs,Temkin said.

Professionals in customer intelli-gence need to be able to mesh cus-tomer feedback from social mediawith that from more traditional


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New Uses for BIWhat are the most noticeable differences in how your organization

will use BI compared with past years?

More business users will access BI systems

More executives will use BI tools

More data sources will be integrated into the BI system

More operational workers will access BI

BI tools will be more integrated with other apps

More executive dashboardswill be deployed

0% 20% 40% 60%


channels, Temkin said. Insights fromsentiment analysis also should beshared by end users within andacross business organizations.

In this way, technical supportagents and brand managers, forexample, could get fast access tothe latest customer posts via theWeb so they could respond to com-plaints quickly and fine-tune mar-keting campaigns. On the otherhand, executives could get a high-level view of opinion trends to helpthem make more long-term strate-gic decisions.

WEB FEEDBACK BEATS MARKET RESEARCHBusinesses moving in this directionas part of VOC strategies recognizethat the value of social Web cus-tomer feedback extends far beyondmarketing and public relations. “Ifyou’re a plant manager, you cancapture negative feedback or anemerging problem that customersare having with your brand a weekfaster than by just using a marketresearch service,” said Gareth Her-schel, a research director at GartnerInc. Fixing the problem beforeanother week’s worth of productsgoes out to stores “could mean tensor even hundreds of millions of dol-lars,” he added.

In response to market demand fora more integrated and holisticapproach to sentiment analysis,vendors are extending their plat-

forms and services in several direc-tions. Sentiment analysis and text-mining software vendors likeClarabridge Inc., Attensity Corp.,IBM’s Cognos and SPSS groups,

Autonomy Corp., RightNow Tech-nologies Inc., and Kana SoftwareInc., whose platforms deal with thelarge masses of unstructured enter-prise data, have been extendingtheir reach aggressively into socialmedia through partnerships andacquisitions. In addition, socialmedia monitoring service providersare providing portals, workflow andcollaborative tools that enable endusers in separate departments toshare insights and collaborate onresponses.

Intuit, for example, uses Clara-bridge for Enterprise to gather cus-


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Social media monitoring serv-ice providers are providing portals,workflow and col-laborative toolsthat enable endusers in separatedepartments toshare insights and collaborate on responses.

tomer insights from internal andWeb-based sources, Andrews said.“Tax season only lasts a hundreddays, and we measure [customerattitudes to TurboTax] every day,using what we hear to drive improve-ments all the way to April 15. Wedon’t have time to go through all thecustomer comments manually, sowe need a sentiment analysis toolthat we can rely on and trust.”

WEB DATA QUALITY A CONCERNStill, many companies have beenslow to incorporate social mediainto such customer monitoring pro-grams. According to a third-quarter2010 Temkin Group survey of 114companies with formal VOC pro-grams, 22% of respondents areusing social media, 35% are activelyconsidering it and the rest are not.

A major concern is with the quali-ty of social-Web sentiment data,given the media’s notoriously lowsignal-to-noise ratio. Many businessleaders are addressing the issue byfocusing on sites that provide directfeedback from customers, such asFacebook fan pages, review sites likeYelp and TripAdvisor and onlinesocial communities they set up fortheir customers to interact andshare tips.

Meanwhile, businesses are recog-nizing the value of social media, notonly for monitoring customer senti-ment but also for engaging with and

responding to customers on a deep-er and more immediate level thanmore traditional feedback mecha-nisms can provide.

For example, when a customerposts a complaint about one of iRobot Corp.’s vacuum cleaners onYouTube, RightNow’s SmartSensecloud monitoring tool will automati-cally alert Maryellen Abreu, iRobot’sglobal technical support team direc-tor. In addition to contacting thatcustomer directly, iRobot is likely topost its response to the problem onYouTube, and perhaps initiate a dis-cussion on its customer forum, shesaid. “We not only want customersto be able to interact with us on thechannels of their choice, but to beable to respond to customers onthose same channels,” she explained.

And, ideally, respond to the nega-tive feedback before it goes viral. �

Elisabeth Horwitt is a Boston-based freelancejournalist. Write to her at [email protected].


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A major concern is with the qualityof social-Web sentiment data,given the media’snotoriously lowsignal-to-noiseratio.

ROB STEFANIC, CIO at Sensata Tech-nologies Inc., doesn’t come acrossas a revolutionary bent on topplingcorporate hierarchies. But accordingto leading research scientists ofsocial networking and collectiveintelligence—or crowd computing, assome are calling it—Stefanic is help-ing Sensata leverage information inways that threaten the status quo ofmany companies and their ITdepartments.

A supplier of high-tech sensorsand controls for automotive, appli-ance and aircraft manufacturers,Sensata is tapping collective intelli-gence to hone its corporate commu-nications, reshape its branding anddevelop an IT community portal.Instead of contracting with an IT

provider to rely on a group of 50paid developers, for example, Sen-sata is pooling the work of 2,000community developers to show theirwork on portal development. TheAttleboro, Mass.-based company istaking an equally broad approach tobusiness intelligence, grabbing datafrom the public domain and mash-ing it up with point-of-sale datafrom its automotive customers, aswell as its own data, to uncover pat-terns that could inform future busi-ness decisions.

“We are relatively new in boththese phases, but we are makingprogress and starting to show thevalue of this connectivity to cus-tomers as a corporate advantage,”Stefanic said.


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4 FOLLOW THE CROWD … COMPUTING

Tapping collective intelligence, or crowd computing, can yield big value for businesses—but it also

challenges the status quo. BY LINDA TUCCI

Follow the Crowd ...

Computing

Organizations have channeledcollective intelligence to accomplishthings since the dawn of civilization.The collective intelligence, social

networking, crowd computing—callit what you will—enabled by theInternet, however, is relatively newand largely unplumbed by the busi-ness world, according toresearchers.

“I get the impression their toesare being dipped in the water. Buthas [crowd computing] transformedthe way a company thinks about itsknowledge resources, its people? The answer is, ‘Not yet,’” said AndrewMcAfee, a principal research scien-tist at MIT who studies the impactof technology on business.

Companies are setting up Face-book pages and monitoring Twitter,McAfee said. But they have beenslow to utilize the collective intelli-

gence unleashed by the Web,despite “overwhelming evidence”that crowd computing can solvepressing business problems, fromgauging how many widgets yourcompany will sell next quarter bysetting up an online market, to pre-dicting housing prices by analyzingGoogle searches.

“The reason has to do with thingslike the geek reluctance to give upcontrol in the enterprise, the faiththat we have in things like workflowand hierarchy, in command and con-trol, in the mind-set that got instilledin us,” McAfee said.

CHALLENGES FACING CROWD COMPUTINGCrowd computing challenges thestatus quo, on many levels, accord-ing to the panel. The data collectedfrom social networks and throughcrowd computing is “big and shal-low and ragged,” McAfee said. Com-puter scientists are used to workingwith small pools of clean, well-structured data.

The model also suffers from whatRobert J. Laubacher, associate direc-tor and research scientist at the MITCenter for Collective Intelligence,calls the “IT zealots” who cast theuse of collective intelligence in polit-ical terms, heralding crowd comput-ing as the beginning of the end fortraditional corporate hierarchies. Farfrom a “free-for-all,” crowd comput-ing done right is a mix of openness


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“Has [crowd computing] trans-formed the way a company thinksabout its knowl-edge resources, its people? The answer is, ‘Not yet.’” —ANDREW MCAFEEprincipal research scientist, MIT

and very tight controls, saidLaubacher. Linux is a prime exampleof this. “Anybody can contribute anidea, but there is a tight lock boxwith lieutenants who decide whatgoes in,” he said.

Indeed, Sensata’s Stefanic saidhe’s currently focusing on offsettingopenness with tight controls as hisIT team helps the company tap largepools of people to shape ideas andproducts. “To ensure you have aconsistent delivery of quality is awhole area that needs to be workedon,” he said.

Another “huge cultural change” for Sensata is IT’s work on predictiveanalytics. The historical approach toBI at the company was largely reac-tive, he said. Data was mined for keymetrics, and decisions were madebased on scorecards. “Putting datain patterns to predict not only thenext three months, but the next sea-son or year over year, is a very dif-ferent way to look at the data,” hesaid.

CHECKBOX APPROACH TO SOCIAL NETWORKSEven at companies that are tappingcollective intelligence and socialnetworks for information, theimpact of crowd computing is oftenminimal (and soon abandoned)because the collected data does notresult in change for customers orthe corporation. “There is no feed-back loop,” said Adam Boyden, pres-

ident of San Mateo, Calif.-basedConduit Ltd., a network of Web andmobile application publishers.

Many IT departments have spent“significant sums of money buildingthese tools in their environment,”

Boyden said, “but it was like a check box”—done to say you did it.Notable exceptions are Conduit’scustomers in the social networkgames industry, a business based onleveraging information from socialnetworks. He relayed the story ofthe Zynga Inc. board member whoasked the CEO why the game devel-oper hadn’t moved its iconic cowfrom the left to the right-hand sideof the screen. The CEO reportedlyopened “the biggest computeryou’ve ever seen,” studied a spread-sheet for several minutes andinformed the board member thatthe move would result in a 0.1%drop in revenue per customer.Unlike Zynga, legacy companiesoften don’t know how to break the


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Even at companiestapping collectiveintelligence andsocial networksfor information,the impact ofcrowd computingis often minimal.

cycle of traditional development ofideas and products, Boyden said.

CIOs who want to explore thevalue in crowd computing should be prepared to deal with the noise.

Conduit’s Boyden said it’s importantto listen to the good stuff while notalienating the hordes who aren’t yetcontributing value. Game developerBlizzard Entertainment Inc., where“roughly 85%” of what everybody isshouting is rubbish,” said Boyden,has a clever way of dealing withWorld of Warcraft’s noisy audience:The company pleases only one ortwo of the many online communityconstituencies, and regularly rotatesthis perceived favoritism to otheronline communities.

Corporate communities don’t need to be nearly as diplomatic, saidMIT’s McAfee. “If you have some-body who is not useful and makingnoise, kick them out of the commu-nity.” �

Linda Tucci is senior news writer at SearchCIO.com. Write to her at [email protected].


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Enterprise CIO Decisions Ezine is producedby TechTarget CIO/IT Strategy Media,

© 2011 TechTarget.

Jacqueline BiscobingManaging Editor

Rachel LebeauxAssistant Managing Editor

Linda KouryDirector of Online Design

Scot PetersenEditorial Director

Chris GonsalvesExecutive Editor

Christina TorodeNews Director

Linda TucciSenior News Writer

Carol ZarrowCopy Editor

Ben ColeAssociate Editor

Stan Gibson, Elisabeth Horwitt, Niel Nickolaisen

Contributing Writers

FOR SALES INQUIRIES, PLEASE CONTACT:

Theron ShreveDirector of Product Management

[email protected](617) 431-9360

CIOs who want to explore the value in crowdcomputing shouldbe prepared to deal with the noise.



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