News
 Do-It-Yourself
Customer Data Integration Hubs: Advantages &
Disadvantages
Today, CDI initiatives are included in most customer
relationship management (CRM) and master data
management (MDM) plans for achieving a single view
of customers across many disparate databases. The
information includes customer recognition data along
with promotion history, demographic data, etc. Lance
Osborne gives you the pros and cons of
Do-It-Yourself CDI.
This single view helps businesses consistently
communicate with their customers by always
referencing the same information, and by
communicating any changes to that information across
all lines of business. It also enables a more
detailed understanding of customer needs, leading to
more effective merchandising, privacy management,
and customer support and service.
Do-It-Yourself CDI Advantages
For many people, taking on a challenging project has
inherent appeal. From choosing the right tools to
adding the finishing touches, do-it-yourselfers
enjoy maximum control. From a business standpoint,
early adopters are interested in do-it-yourself (DIY)
CDI hubs for several reasons, including:
• Sense of security. Sensitive client data can
remain within the facility.
• Compliance. Some governmental regulations
require strict control over enterprise data.
• IT departmental control. It might be worth
the additional cost and overhead to control the
process and adhere to customer contact.
• Ubiquitous access. All sales, customer
support and other channels might be able to tie
directly to this hub.
Disadvantages
A process of this magnitude is not without its
challenges. There are many factors to contend with,
and - as any homeowner knows - a project that seems
manageable can quickly take on a life of its own.
Consider the intrinsic problems with DIY CDI hubs,
which include:
• Resource constraints. Human resources are
required to design, build, implement, adjust and
track results. These skills are not easy to find, or
to replace.
• Isolated internal data. Without external
linking or human contact, true and objective
source-of-the-truth data becomes outdated.
• Missing data. Businesses must contend with
limited ability to complete, correct or augment an
address or update a telephone number.
• Do-not-mail and privacy. Some privacy
packages today do not include updated do-not-mail,
phone or email information, nor do they recognize
prank, bogus or incorrect data. In addition, new
privacy legislation is passed every day.
• Rigid views. Businesses are faced with limited
ability to create and maintain multiple groupings or
views of the customer.
• Throughput and scale-out limitations. Hub
technologies may optimize real-time performance, but
have limited capability to process large files
quickly in a batch process. This directly affects
the build process and ongoing maintenance. Accuracy,
complexity and costs. Each hub vendor provides
varying levels of customer information hygiene,
matching and linking. Many use third-party provider
software products for hygiene and linking, adding
complexity and potential costs.
• Coordination of stakeholders. It takes time to
gain buy-in from all business stakeholders,
determine what hierarchy to use for the single view,
develop business rules, build the hub and spokes,
and integrate the third-party software.
Time to market: on-your-own implementation times are
usually so drawn out that it takes too long to show
ROI to the organization. Consider the costs. A DIY
CDI solution is not a short-term, turnkey business
investment providing instant ROI. Early attempts to
establish DIY CDI hubs have often failed to account
for the long-term, unforeseen costs that can occur.
When forecasting the total investment for DIY CDI,
consider these costs:
• Software license fees may range from $200,000 to
$600,000 or higher.
• Annual software maintenance is as high as 30 to 40
percent of the initial purchase price; might be
based on the regularly increasing list price of a
software license.
• The ever-degrading value of isolated, internal,
transaction-based customer data.
• Initial hardware costs.
• IT processing costs and data center overhead.
• Database development costs.
• Database maintenance costs.
• People resources can reach 10 to 30 full-time
equivalents, depending on the project.
• Questionable accuracy of information and
redundancy.
• Lack of in-house CDI expertise.
• Outside consulting.
• External data or reference data.
• Lost time to market.
Ultimately, businesses must weigh the pros and cons
of all available approaches - whether rolling up
their own sleeves, bringing in the professionals or
choosing a hybrid approach - to determine the
solution that best meets their needs. Perhaps it is
time for you to look at the options and consider all
of your CDI alternatives.
---Sources:
Lance Osborne is Acxiom's Solutions Marketing
leader. He may be reached at lance.osborne@acxiom.com.
Article published in DM Direct Special Report
September 20, 2007 Issue (www.dmdirect@list.sourcemedia.com).
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