To Market, To Market

In recent years, Xerox has focused its resources on establishing itself as a force in knowledge management, operating under the banner “The Document Company”. It’s only natural, then, that the company would strive to excel at getting the most out of its own customer information – something its Canadian operations are doing with the implementation of a sophisticated data warehouse.

Helping bring a customer focus to Xerox Canada’s IT strategy is CIO Gary Jarosz, who recently made a “leap of faith” from a sales and marketing executive position to the senior IT chair. He jumped at the chance to bring his years of experience on the front line to an IT function, where he could apply his knowledge of the customer environment to customer-related IT projects.

Over a 16-year period, Jarosz worked his way up through the ranks to senior sales, marketing and general management positions in large IT vendor organizations, where he focused on the financial services and manufacturing sectors. He has also led development teams in the design and implementation of complex, large-scale IT-based projects, a good set of credentials for a CIO. Along the way, he learned how to assess customer needs and preferences – and how to satisfy these needs and preferences by giving customers what they want, not what the organization thinks they want.

When he moved to the CIO’s chair at the beginning of this year, Jarosz brought with him a desire and commitment to apply technology solutions to improve and enhance customer relationships.

“When you are in the field working day-by-day with customers, you get a strong sense of what is required to maintain customer loyalty,” he noted. “As well, you develop the ability, as any good salesperson does, to rank customers according to their potential revenue for the company, as well as their product or service requirements. Once you have done this for a range of different customers, you can then build on the relationship by directing marketing and sales campaigns, and service offerings, where they best fit a customer’s requirements.”

CFO Drives The Project

When Jarosz took on the CIO mantle, the company’s data warehousing project was well under way, championed by VP and CFO Brian Brewer.

Although one would imagine that the customer focus of a data warehousing system would motivate a marketing department to become the first champion of the development process, this was not the case at Xerox Canada. While other business units have joined in the project as it evolved, the finance department, specifically Brewer, was the initial driver, key pioneering user and catalyst.

“When we looked at the data warehousing project,” explains Brewer, “our finance department was quick to realize that it would solve one of our major problems – tracking financial data, revenues, P/L, receivables, etc., for our customers on a national account basis, from the time they became customers for as long as they remained in the Xerox fold.”

As Brewer points out, the ability of the system to pull together all customer financial data from several sources and to develop reports from that data was what really attracted his staff to the project and was the primary factor in the financial department’s role as champion of the project.

Bringing Technology To Bear On Customer Relations

Based on his years in the field listening and responding to customer requirements, Jarosz knew that the data warehousing system would be a tremendous asset for other departments and lines of business as well. That being the case, the new CIO became as enthusiastic as the other members of the project team.

“I came into the project in progress, so I had to ramp up to the requirements, which I did pretty quickly when I saw how the end result was going to benefit so many areas of the operation,” says Jarosz. “The data warehouse is our only single, integrated repository of customer data, and the capability to access this information has ensured the support of other departments that need customer data.”

To date, the system has been under development for nearly three years, a process which involves tracking and storing all customer transactions for every customer.

“By doing this we develop what I refer to as a customer continuum,” says Jarosz, “a tracking of the various aspects of a customer relationship from day one to the end of the relationship. When our system reaches its final stages of development, we will be able to implement an effective customer relationship management (CRM) program.”

Tracking Unsatisfied Customers

While all customers require attention, one of the popular views on customer relations is that unsatisfied customers can provide important feedback in assessing how well a company is handling its customer relationships, pointing the way through their dissatisfaction to ways and means of correcting deficiencies.

As Jarosz describes it, “we need to be concerned about our unsatisfied customers. Is there some way to make them satisfied customers and to re-establish a loyal relationship? Naturally, revenue from unsatisfied customers is at risk and in some cases the revenue may be a substantial amount – something a vendor organization wants to deal with quickly and directly.”

Jarosz concedes that no company can expect to keep 100 per cent of its customers forever – this is not a practical model. However, what companies need to know is: what customers do we want to keep? This is where data warehousing comes in, assisting organizations to retain customers and motivate customer loyalty by developing relationships that recognize customers’ established requirements.

While Xerox wasted no time in using its data warehousing system as it became populated with customer data, the technology had already been in widespread use in a variety of industries globally. System provider NCR Corp. has built and maintains more than 1,000 data warehouses worldwide, 220 of which are classified as large systems, with one terabyte or more (one trillion bytes) of storage.

Providing an Enterprise-wide View of the Customer

At Xerox, the vision for the data warehousing system has been summed up as: a single repository of customer data that can be used to analyse customer requirements and to develop a better understanding of customers’ service needs. Using this information, the company is much better able to focus on these needs and to provide product and service offerings unique to each customer.

“What this means,” says Jarosz, “is that information is available on a national and even global basis, enabling data such as profit and loss, total revenues, service records, and installed product mix to be analysed for large national or global customers from one single database.”

Prior to the implementation of the data warehousing system, customer information was stored on a variety of disparate systems – from legacy systems to sales force automation tools – with no communication among them and no easy way to pull together all of the information on individual customers.

The data warehouse has changed all that. All data in the warehouse has a customer focus, in keeping with the project’s ultimate goal of providing an enterprise-wide view of the customer.

Decisions about what data is populated into the database are made jointly by IT and business analysts, with a view to maximizing benefit to users.

Implementing The Warehouse

Mike Milne, IT program manager for the project, describes how the undertaking took shape.

“It was initiated in February 1998. The project team consisted of a program manager from IT, three data extraction specialists from our legacy systems area, two NCR consultants to assist us with data modelling and database administration, and one internal business customer representative from each affected business area. We used a phased approach. Phase I covered design and modelling; in phase II, data on field service was input; and in phase III, financial data was entered, to enable P&L reporting by customer/account.”

A steering committee, made up of the CIO and one manager from each business unit was put in place to guide the project and keep it on track. The program manager was responsible to the steering committee for the output of the team, and the CIO was the overall decision-making authority for specific project-related issues.

One of the major hurdles faced by the project team was securing funding. As Milne puts it, “Xerox has a focus on sales and marketing, and while financial reporting and field service operations – the first two application areas to be implemented – are very important to corporate management, funding IT projects in these areas is always a challenge.”

The project team took two approaches to meet the funding challenge: establishing linkages to global Xerox initiatives to secure partial funding, and demonstrating the benefits of the investment by achieving early wins.

Milne also has a suggestion for other IT managers needing to resolve the funding challenge. “I believe that spending more time educating senior executives on the benefits of the overall strategy is one activity which would certainly make funding decisions come easier and faster.”

Since data warehousing projects are, by nature, cross-functional, affecting and benefiting multiple business units, sponsorship at senior levels is also a key to success. As Milne points out, “successful data warehousing projects are viewed within the organization as business projects rather than IT projects.”

Improving Customer Knowledge

As the warehouse became populated with more customer data, the company was able to refine its sales and marketing strategies. For example, by analysing the data gathered on product purchasing trends, the company is now able to categorize customers by product and service level requirements, and can tailor product offerings and solutions. “We can provide high product and service value to our high revenue customers on a global, national account basis,” says Jarosz.

“It’s extremely important to handle different customer accounts based on their level of product and service required. Customers are all different, and the data warehousing system is already providing information we can use. It enables us to iteratively re-analyse the marketplace, and then design and develop marketing campaigns and solutions to meet market segments. My sales and marketing experience also taught me how critical it is to provide complete and detailed customer transaction data to accomplish these goals successfully.”

The warehouse enables Xerox to tailor products and service solutions to a market of one. As Jarosz puts it, “Mass marketing doesn’t work any more, and without data warehousing we cannot reach the objective of dealing with each customer’s needs on an individual basis.”

When the warehouse is fully populated, it will provide the Canadian management team with a powerful customer-focused tool to assist the organization in achieving its goal to become a recognized source for knowledge management.

What’s Inside The Data Warehouse

The heart of the Xerox data warehousing system is the Teradata database from NCR Canada.

The configuration consists of an NCR 4700 with one four-CPU node and 2GB of memory. Disk capacity is approximately 78GB with production database using 32GB. The current Teradata version was upgraded to V2R3 in November.

The system includes a central warehouse containing detailed data, and data marts containing summary (consolidated) data. These can be multidimensional models in different database applications, including Essbase and Cognos PowerPlay, both of which are provided with an intuitive, easy-to-query interface. Some data marts are databases with a custom reporting application. Users who wish to drill down to look at detailed data are provided with metadata (data about the database), which hides the complexity of the underlying database to make it easier to query.

One of the key tools for extracting data from the system is a product called NetXpert, a Web-based application that enables executives and senior managers to access all demographic data on national accounts via the Xerox intranet. This includes information such as total revenue, installed equipment, sales cycles, business year-to-date, as well as other customer contact information – names of senior management personnel, location of offices, etc.

While the data warehouse now contains most of the data required to address user needs, there will be new data added to meet new requirements. Future project work will be primarily concerned with enhancing the overall decision support environment, in terms of reporting, OLAP and data-mining capabilities.

The Pursuit of Knowledge Management

Organizations are becoming ever more aware that as our horizons expand – as the knowledge content of work increases and the pace of work accelerates – the ability to master knowledge and put it to use is becoming a significant factor in determining success or failure in business.

And if it is true, as Aristotle said, that “knowledge sets man free and gives him power”, then Xerox has set itself an admirable challenge in providing the tools to manage knowledge in an increasingly complex global business environment.

In 1997, Xerox formed a panel of more than 100 knowledge-managers in large organizations in right countries around the world. The formation of The Knowledge Panel was a way to identify the pioneers in the young but important knowledge-management movement; to track their successes and failures; to help Xerox and its customers better understand the trend; and to share insights that could make knowledge-managers more effective in their work.

Xerox surveys each of these panellists two or three times a year and shares the results with all of them. Among the findings of the first survey conducted in 1997 were the following:

• 25 per cent of the companies the knowledge-managers represented had knowledge-management budgets of more than $1 million a year, and a somewhat larger number, 27 per cent, had 11 or more people dedicated to managing company knowledge.

• A majority said their chief mission was to facilitate the sharing of information; 32 per cent said their formal job was to integrate technology to provide tools for knowledge sharing and use. Those who felt most satisfied with their progress described themselves as change agents rather than managers.

• 42 per cent said the chief barriers to their work were their organization’s resistance to change and a culture that worked against sharing.

Duane Sharp is president of SharpTech Associates in Mississauga, Ont., a company specializing in technology communications. He is the author of numerous articles dealing with information technology.