Business intelligence is shaking up all kinds of industries from the top down as telcos evolve to survive, and from the bottom up as Microsoft democratises intelligence at the beck and call of the knowledge worker BUSINESS INTELLIGENCE will be at the heart of how companies evolve their business models. For telcos this will be a move of necessity; for ordinary corporate users, it will be because Microsoft wants to bring BI to the masses. According to Douglas Dorrat, telecoms market strategist at BI vendor Microstrategy, consumers and vendors of BI software have been looking for the next killer application for a few years but it has now been found.

"I believe the real killer app will be around customer intelligence," Dorrat said at the ITWeb BI conference. "I speak to telecoms and marketing companies globally and their business models are evolving because of convergence. I can see some of this coming to SA here will be a big shift here in the next few years. A very senior executive in the global advertising industry recently summed up the trends in marketing - which is a good barometer of how companies are trying to evolve - in three words: sell more stuff."

How to make that happen will involve customer intelligence coming into play. "Internet companies are destroying traditional retailers in some cases and last year we saw a telco buy a bank. For example, Tesco in the UK sells anything. Tesco uses customer intelligence to drive customer interaction - they own your shopping list and can tell what you`ve bought before and what you might buy in the future. Tesco have had a dramatic impact on the mobile telecoms market as a virtual operator, it has 4 million customers in the UK and is a considerable market force. If you spend more than £50 on groceries, Tesco will give you a free phone." Dorrat said that changing consumer habits were also throwing up new opportunities.

CUSTOMER INTERACTION

Dorrat said these examples were a measure of how customer interaction models were changing.

"Things are starting to change and the way things change manifest themselves in the way we engage with customers. In order to understand this, we can go back 15 years and see how mobile telecoms has evolved. Back then everything was a mass-market focused, consumer-driven model, with high brand awareness, standardised pricing and a common level of service - I could be the best customer in the world but still receive the same level of service as the worst. There was also a widespread break-even model - you had to acquire a customer and keep them for a while before you could profit from them."

Fifteen years later and telecoms companies hadn`t really changed the way they measure success, he said.

"They still use net additions, what churn they have, minutes of use on the network, acquisition cost and penetration. Now, in Western Europe it`s been a saturated market for seven or eight years. Net additions are very hard to come by, churn happens anyway, minutes of use is irrelevant because most services are flat-fee based, and acquisition cost isn`t the key cost anymore - it`s retention cost. So some of the key business measures are changing very rapidly to become more customer focused."

The way that will happen - and Dorrat said the new attiudes were coming to our shores - is a much more customer-focused level of intelligence where profitable individuals are nurtured and customised levels of service reduce churn and improve profitability. "And this is true of all industries, not just mobile telecoms."

BI TO THE MASSES

Also speaking at the conference, Albie Bester, business group executive: Information Worker at Microsoft SA, outlined his company`s strategy of bringing BI tools to the masses.

"Four to five years ago, BI and the masses would never have been mentioned in the same sentence," said Bester. "In July 2007 the Economist Intelligence Unit conducted an online survey of 1 351 senior executives worldwide to determine their companies` level of enablement, job satisfaction and corporate performance: 33% were senior executives, 43% were managers and 24% were employees. Twenty-one percent were in general management, 19% were in marketing and sales, 9% in finance, 17% in IT, 16% in operations and 18% in R&D. Twenty-three percent of the respondents were located in North America, 22% in Western Europe, 34% in the Asia-Pacific region and the remainder in Latin America, Eastern Europe, the Middle East and Africa. Of the companies surveyed, about one-half had annual revenue of less than $500 million, 30% reported revenue of $500 million to $10 billion, and roughly 20% posted revenue of $10 billion or more."

The survey, which was commissioned by Microsoft, looked at what employees were given to do their jobs properly. "Businesses around the world claim that people are their most important asset," said Bester. "Yet they often fail to provide the structures, processes, tools, and information that would permit their employees to contribute effectively to the organisation`s goals."

The study found that companies with a higher degree of enablement tend to perform better. Microsoft`s push, according to Bester, is to give BI tools at an appropriate level to all employees that are integrated with its existing office offerings.

"We want to provide accurate business insights to all employees leading to better, faster, more relevant decisions. They must be integrated with the platform and the applications, be secure and personalised, and finally cost effective and comprehensive. In short, it`s BI to the masses."