Customer Data Integration & Master Data Management Summit London 2006

Customer Data Integration & Master Data Management Summit London 2006
13-14 July, London, UK Produced by : In Association with :

CUSTOMER DATA INTEGRATION
Trends & Strategies for Aaron Zornes Founder & Chief Research Officer The CDI Institute The-CDI-Institute.com a.k.a. tcdii.com

How Many Analysts Does It Take To Change a Light Bulb?
Gartner analyst “We feel that a new bulb is necessary & that the bulb will be replaced (0.99 probability) — we have a new service that addresses that issue” Forrester/Giga analyst “In 5 years, the new illumination technologies will replace what you currently have ... Wait” Ovum/Aberdeen analyst “We’ll write about the old bulb for $25,000” IDC analyst “There are 1,230,245 burnt-out bulbs in the world — for $2,500, we will tell you where they are ...” Big Three consultant “It’s time to re-engineer the sun ...” © 2006 The CDI Institute The-CDI-Institute.com

About the CDI Institute
Founded in 2004 Focused on CDI-MDM business drivers & technology challenges CDI Advisory Council™ of fifty G5000 IT organizations with unlimited advice to key individuals, e.g. CTOs, CIOs, data architects CDI Business Council™ website access & support to 3,000+ members CDI-MDM Road Map & Milestones™ semi-annual strategic planning assumptions CDI Alert™ bi-weekly newsletter CDI Market Pulse™ monthly surveys Budgets, success/failure rates, mindshare of 250+ major in-flight CDI-MDM projects Examples: evaluation process for CDI SI, CDI ROI in Telco M&A, … CDI Fast Track™ One-day public & onsite workshop Fee-based & rotating quarterly through major North American, European, & Asia-Pacific metro areas Semi-annual CDI-MDM SUMMIT™ About Aaron Zornes Most quoted industry analyst authority on topics of CDI & MDM Founder & Chief Research Officer of the CDI Institute Conference chairman for DM Review’s CDI-MDM SUMMIT conference series Founded & ran META Group’s largest research practice for 14 years M.S. in Management Information Systems from University of Arizona A Global Perspective Trusted by 3,300+ Enterprises Worldwide Our client base includes emerging and global IT end-user, vendor, and public-sector enterprises More than 250 Analysts/Consultants Average 13 of years IT experience Former CxOs who understand boardroom challenges Former Big X consultants who understand first-hand the ins and outs of large strategic IT projects Former IT executives who understand back- and front-office issues Former IT vendors who understand the markets Fun Facts 25% of META Group’s research staff have over 20 years of experience 40% were directors and above 10% were at the CxO level 20% come from the Fortune 500 “Independent, Authoritative, & Relevant” © 2006 The CDI Institute The-CDI-Institute.com

CDI Institute Advisory Council
Representative Members Advisor agrees to provide Institute’s consultants with advice & insight regarding the use of CDI software & related CDI business processes at Advisor’s convenience Advisor agrees to participate in at least one fifteen (15) minute survey teleconference call every sixty (60) days Optionally, Advisor may respond to the bi-monthly survey request via or Internet-based survey fulfilment Results of such CDI market research surveys shall be aggregated by the Institute & made available to all Advisory Council members In no case, shall any Advisor-specific survey information be made available to other parties unless Advisor has specifically agreed to the release of such information in writing Bell Canada Canadian Tyre Caterpillar Citizens Communications COUNTRY Financials Educational Testing Services GE Healthcare Honeywell Intuit MCI McKesson Microsoft Motorola National Australia Bank Nationwide Insurance Novartis Roche Labs Rogers Communications Scholastic SunTrust Westpac Weyerhaeuser Fifty organizations who receive unlimited CDI advice to key individuals, e.g. CTOs, CIOs, & CDI project leads © 2006 The CDI Institute The-CDI-Institute.com

“Independent, Authoritative, & Relevant”
Recent CDI Alerts Oracle Data Hubs: “The Emperor Has No Clothes?” Subtitle: Considering Oracle’s Data Hubs? Then Consider This … SAP Master Data Management “Extreme Make-Over” Subtitle: SAP MDM went under the architect’s knife – Is the outcome attractive to Global 2000 enterprises? IBM/DWL Customer Center: Strategy-Driven vs. Urgency-Driven M&A Subtitle: Who’s Minding the Metadata? (Does the “new” IBM software business have a coherent strategy to integrate its treasure of acquisitions?) Siebel CDI Assets to Help Oracle Battle IBM & SAP Subtitle: How Many More Software Firms Must Oracle Buy to Catch Up with SAP? “Independent, Authoritative, & Relevant” © 2006 The CDI Institute The-CDI-Institute.com

Customer Data Integration (CDI) Definition
Comprised of solutions (processes & technologies) Recognizing a customer & its relationships at any touch-point Aggregating, managing & harmonizing accurate, up-to-date knowledge about that customer Delivering it in an actionable form “just in time” to touch-points Historical CDI Solutions Synchronization Enterprise Application Integration (EAI) Extract Transform Load (ETL) Replication Aggregation Master Customer Files/DBs CDI CDI is mandatory first step for most organizations on journey to enterprise master data management (MDM) © 2006 The CDI Institute The-CDI-Institute.com

CDI-MDM Milestones Market maturation Market momentum
Roadmap of key areas to invest in CDI – i.e., “What are the key differentiators of a next-generation CDI solution in ?” Market maturation Market momentum Market consolidation Budgets/skills Data governance MDM convergence Architecture Data models Customer identification Master data delivery Analytics Business services/workflow “CDI/MDM Milestones” are strategic planning assumptions to assist IT organizations & vendors in coping with flux & churn of the emerging CDI-MDM vendor landscape © 2006 The CDI Institute The-CDI-Institute.com

© 2006 The CDI Institute The-CDI-Institute.com
Market Maturation During , the CDI-MDM market shifted gears from “early adopter” to “mainstream” as 95%+ of financial services, communications services, and pharmaceutical/life sciences enterprises actively look to replace homegrown CDI solutions During , CDI solutions will come to market for the midsize enterprise from Microsoft and Oracle plus the Data Quality vendors (Pitney Bowes, SAS/DataFlux, Trillium) By 2008, the market for CDI-MDM solutions (software and services) will exceed US$1B © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

CDI Market to Reach $1B by 2008
Source: The CDI Institute’s 1Q2005 MarketPulse™ survey of fifty large-scale CDI initiatives Systems integrators (Accenture, Alliance, BearingPoint, Cognizant, CSC, Lockheed Grumman, IBM BCS, Infosys, Unisys) Mega vendor CDI (Oracle Customer Data Hub, SAP Master Data Management, Siebel Universal Customer Master) Best-of-breed CDI (DWL Customer, Initiate Systems Identity Hub, Siperian Reference Manager) ETL (extract-transform-load vendors IBM/Ascential, Informatica, SAS) EAI (enterprise application integration vendors BEA, IBM, Tibco) NOTE 1 = Data service providers (Acxiom, Dun & Bradstreet, Experian, Harte-Hanks, IMS International) revenues not factored in. NOTE 2 = Data quality vendor (Ascential, FirstLogic, Innovative Systems, Pitney Bowes/Group 1, SAS/DataFlux, Trillium) revenues not factored in. © 2006 The CDI Institute The-CDI-Institute.com

Market Momentum During , CDI software solutions such as I2, IBM/DWL, ORCL/SEBL, & SAP will monopolize the majority market share; concurrently, a niche market will arise for hosted CDI-MDM solutions led by early to market vendors Alliance Consulting and Unisys Through , both mega & niche CDI-MDM vendors will aggrandize the traditional master customer DB business of data service providers such as ACXM, DNB, & GUS/Experian By , every major application & database vendor will provide either native or OEMed CDI-MDM capability – including DOX, MSFT, CRM, & NCR/Teradata © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

CDI Momentum March 2005 – CDI Institute’s MarketPulse™ forecasts market for CDI S/W & services to reach US$1 billion by 2008 April 2005 – Gartner recognized importance of CDI with its first Magic Quadrant™ for CDI Hubs June 2005 – Forrester released their Wave™ report on CDI October 2005 – IDC’s W/W Market Forecast stated MDM market will grow to US$10.4 billion by 2009 January 2006 – DM Review & CDI Institute along with 25 leading vendors launched CDI-MDM SUMMIT 2006 as largest expo dedicated to CDI, MDM, & DG It’s All About “Relationships” Panoramic Customer View Customer- Centric Universal CDI 360 º Master Info File System of Record 55% of G2000 are actively evaluating an enterprise CDI solution; 42% “in production” with custom-built solution, & 3% “in production” with vendor-based solution © 2006 The CDI Institute The-CDI-Institute.com

Market Consolidation & Diversification
During , mega IT vendors (IBM, Oracle, SAP) will continue marketing gyrations in moving to an enterprise MDM strategy IBM (ASCL/CRSW/DWL/SRD/Trigo) & ORCL (iFlex/JDE/PSFT/SEBL) will wrestle with many of the same architectural/BPM/metadata/platform issues that forced SAP to withdraw its product from the market (SAP MDM/A2i xCat) While mega IT vendors IBM, ORCL, & SAP will dominate in the CDI/MDM hub market, niche/best-of-breed vendors (I2, Initiate Systems, Kalido, Siperian) will thrive in specific industries & horizontal/corporate applications © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

CDI/MDM Genealogy Pre-2001 2002 2003 2004 2005 2006
Data service providers (Acxiom, Experian) fail at software makeovers into CDI Oracle, SAP, Siebel introduce 3rd gen/hybrid CDI 1st gen CDI solutions arrive (IBM CIIS, Hogan CIF) 2nd gen CDI vendors merge to form 3rd gen CDI solutions (Initiate/Journee, Siperian/Delos) Mega vendors digest acquisitions Nascent EII vendors arrive & flop Pre-2001 2002 2003 2004 2005 2006 ETL vendors add modest CDI extension & avow CDI capabilities CDI early adopters drive requirements (Fin Svcs, High Tech Mfg, Pharma, Telco) App vendors launch EAI infrastructure (SAP NetWeaver, Siebel UAN) ‘Process Hubs’ trounce ‘Data Hubs’; 4th gen ‘Full Spectrum’ hubs support structured & unstructured Mega app vendors roll out CDI (Oracle OCO, SAP MDM, Siebel UCM) ‘EIM’ as yet another TLA 3rd generation CDI solutions are based on service-oriented architecture (SOA) to hybridize aggregation, replication & synchronization to provide enterprise-wide CDI infrastructure © 2006 The CDI Institute The-CDI-Institute.com

Budgets & Skills During , the typical Global 2000 size enterprise will budget/spend US$1.2M for CDI/MDM software solutions, with an additional US$4M for systems integration services During , CDI/MDM skill shortages will greatly inflame project costs as demand for data stewards, enterprise data architects, & other individuals with strong affinity for data governance will outstrip the market for individuals with actual experience; concurrently, systems integrators will fill the void in their classic style by baiting & switching senior veterans for junior rookies By , the market will have stabilized as enterprises react by training & protecting their own data governance staff with specific software product expertise © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

Career Tracks Scarcity of “hands on” CDI experience exists By 1H2006, 1,500+ product- specific consultants albeit with little “real world” experience with mainstay CDI solutions Current shortage lends itself to same scenario of 5-10 years ago with SAP’s ABAP 4GL– i.e., inflated prices & resumes with many junior systems integrator (SI) staff spinning up to speed at client’s expense (a.k.a. “Androids”) Enterprise Data Architect, Enterprise Data Modeler Centres of Excellence, Data Steward, CDI Project Lead Product Neutral Product-Specific Market for CDI- & MDM-related expertise will create major demand for corporate CDI positions during next 3-5 years © 2006 The CDI Institute The-CDI-Institute.com

Data Governance During , data governance will become a mainstay of large scale CDI-MDM projects as RFPs increasingly mandate that component Through , major systems integrators & CDI/MDM boutiques will focus on productizing their data governance methodologies By , data stewards will be a common position both in IT organizations & businesses as enterprises formalize this function amidst increasing de facto & de jeure recognition of information as a corporate asset © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

Master Data Management (MDM) Customer Data Integration (CDI)
Working Definitions Data Governance (DG) Formal orchestration of people, process, & technology to enable an organization to leverage data as an enterprise asset. Master Data Management (MDM) The authoritative, reliable foundation for data used across many applications & constituencies with the goal to provide a single view of the truth no matter where it lies. Customer Data Integration (CDI) Processes & technologies for recognizing a customer & its relationships at any touch-point while aggregating, managing & harmonizing accurate, up-to-date knowledge about that customer to deliver it ‘just in time’ in an actionable form to touch-points. “84% of businesses surveyed believe that poor DG can cause: limited user acceptance, lower productivity, reduced business decision accuracy, & higher TCO © 2006 The CDI Institute The-CDI-Institute.com

CDI projects will focus on “customer data governance” &
“Think MDM, Act CDI” Data Governance “Data Governance” is usually a generic term for an enterprise-wide data management initiative to manage how organizations permit & govern appropriate access to master data This includes measuring operational risk & mitigating security exposures associated with access to data For many companies, DG is part of an overall IT governance strategy & will cover all aspects of enterprise data While much would be considered “customer data”, some is clearly not – e.g., product data & inventory data “Customer Data Governance” is usually considered a subset of the overall Data Governance strategy for a company Data Stewardship Objective is to synchronize data collection processes, reduce data redundancy, & increase data accessibility, availability, & flexibility in a systematic manner CDI projects will focus on “customer data governance” & not necessarily all DG for an enterprise – if a robust IT governance or general DG strategy is in place, it will be easier to be successful at CDG © 2006 The CDI Institute The-CDI-Institute.com

Why Data Governance? Why Now?
Businesses have been governing data for 20+ years, however, only a rare few are doing it well today Many companies historically assigned DG to a data management group whose job is to integrate & manage data Contemporary DG challenges are far greater Break down functional stovepipes Integrate processes across the enterprise – including corporate technology, all LOBs, functional areas & geographic regions Engage all levels of management Based on recognition of issues at hand, an improving economy, & increasing regulatory requirements, businesses are now recognizing the opportunity to take a more strategic view of data governance © 2006 The CDI Institute The-CDI-Institute.com

Why Data Governance? Why Now? – cont’d
Once you know what data is worth, you need to calculate probability for risk in a business processes When you understand value of data & probability of risk, you can evaluate how much to spend to protect it, manage it, and invest in adequate controls This is basis of modern underwriting – assets, risk, controls Doing this systemically requires a combination of organizational structures, business processes, & technology – a “data governance blueprint” for: Data quality Information integration Business intelligence IT management must work with business leadership to design & refine “future state” business processes associated with data governance commitments © 2006 The CDI Institute The-CDI-Institute.com

Data Governance Juggernaut
Becoming “De Rigueur” Data Governance Must Become “De Facto” Data Governance Will Become “De Jure” Data Customer Master Warehouse  Data Integration  Data Management (Batch) (On-Line) (Just-in-Time) Enterprise risk management is emerging as a major issue within most financial institutions & is VERY data-centric © 2006 The CDI Institute The-CDI-Institute.com

Data Warehouse  Customer Data Integration  Master Data Mgmt
Demand for CDI-MDM Expertise Creates Major Opptys for Corp Positions Next 3-5 Yrs Data Steward Enterprise Architect CDI Project Lead Quality Analyst Data Warehouse  Customer Data Integration  Master Data Mgmt Data Steward – Domain/business area expert responsible for quality of specific data entities for subset of enterprise customer data model; in large corporations, “data steward program manager” may exist who sets overall process & policy standards to formalize business’s overall data governance policy processes; additionally, “subject matter managers” may further divide responsibilities for metadata & master reference data (topologies, semantics, business metadata repository, etc.). CDI Project Lead – Classical project manager with full lifecycle experience; experience with specific data model & SDK of specific CDI solution desirable; works with central IT group’s enterprise infrastructure team to define & implement business services related to customer data that comprise initial SOA efforts © 2006 The CDI Institute The-CDI-Institute.com

Technical Maturity Level
Source: February 2006 CDI Institute survey of 50 Global 5000 IT organizations BASIC (“anarchy”) – App-centric approach; meets business needs only on project-specific basis FOUNDATIONAL (“IT monarchy”) – Policy-driven standardization on technology & methods; common usage of tools & procedures across projects ADVANCED (“business monarchy”) – Rationalized data with data & metadata actively shared in production across sources DISTINCTIVE (“Federalist”) – SOA (modular components), integrated view of compliance requirements, formalized organization with defined roles & responsibilities, clearly defined metrics, iterative learning cycle Overall, FSPs are leading the way for non-FSPs © 2006 The CDI Institute The-CDI-Institute.com

MDM Convergence During , customer & product data interdependencies will quickly broaden CDI requirements – i.e., from “customer” to “product” to “vendor” During , niche vendors will provide multi-hub connectivity (Kalido, Purisma, Siperian, Stratature) via hierarchical management extensions By , enterprises without an overall, long-term MDM strategy run the ironic risk of building “MDM silos” © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

The CUSTOMER:PRODUCT Conundrum
JIT, 21st century business models mandate both agility & integration across enterprise to provide higher profitability, reduce operations costs & increase accuracy of regulatory compliance Contemporary supply chains mandate synergetic approach across both customer & product master systems via common business services Key business drivers Increased agility to deliver new product bundles/offers Simplified PLM by automating key business policies to provide effective oversight & compliance Reduced revenue leakage via consistent enforcement of offer policies re: provisioning & billing Pricing Authorized Products Bundles Cross-Reference Hierarchies Geographical Variants Regional Variants CUSTOMER PRODUCT SOA mandates “Customer” + “Product” MDM – however, “customer” cannot simply be added as object to PIM products © 2006 The CDI Institute The-CDI-Institute.com

Architecture During , Global 5000 enterprises will migrate en masse from custom-built customer data hubs onto commercial CDI-MDM solutions – primarily those of mega vendors IBM, Oracle/Siebel, & SAP Through , systems performance will remain problematic as enterprise infrastructure teams hedge between virtual, persisted & composite/hybrid hubs; applying point solutions such as EII middleware will help adjudicate both performance & political stalemates By , both market-leading enterprises & CDI-MDM vendors will have completed their transition from client/server to service-oriented architecture (SOA) by migrating from “data hubs” to “process/policy hubs”; concurrently, CDI-MDM requirements will drive vendors into 4th generation, full spectrum hubs (support for structured & unstructured info with extreme scalability) © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

Most Common CDI Topologies
IMPLEMENTATION STYLE DESCRIPTION External (Service Provider) Database marketing providers Data service providers / service bureaus Persistent (Database) Master customer information file/database Operational data store/active data warehouse Relational DBMS + Extract-Transform-Load (ETL) + Data Quality (DQ) Registry (Virtual) Metadata layer + distributed query (enterprise information integration or EII) Enterprise application integration (EAI) Portal Composite (Hybrid) Ability to fine-tune performance and availability by altering amount of master data persisted XML, web services, service-oriented architecture (SOA) “Chernobyl” Encapsulate legacy applications “Composite (Hybrid Hub)” is architectural preference for 40% © 2006 The CDI Institute The-CDI-Institute.com

Data Models During , mega CDI-MDM vendors (IBM, Oracle/Siebel, SAP) will continue to focus significant resources (R&D & marketing) on “industry content” aspect of data models which will force specialist CDI-MDM vendors to stay “data model lite” via specializations such as B2B hierarchy management & distributed CDI-MDM By , sophisticated hierarchy management will become a mainstay feature of all CDI-MDM vendors, yet support for metadata repositories to link mega vendors’ multitude of acquisitions will continue to lag significantly Not until , will mega CDI-MDM vendors have rewired software to fully support their strategic application infrastructure (Oracle Fusion, SAP NetWeaver, et al); concurrently, CDI-MDM vendors will migrated from data model-centric architecture to process model centricity © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

Customer Identification, Data Quality & Data Profiling
During , independent data quality vendors will struggle to compete against better funded match/merge & data profiling capabilities increasingly integrated with mega vendor CDI-MDM solutions (e.g., IBM Customer Center with WebSphere QualityStage, Oracle Customer Data Hub with Data Librarian) By , standalone data quality vendors will evolve into standalone CDI hubs focused on the mid-market while maintaining postal service address cleansing as their forte Through , high-speed probabilistic matching algorithms will dominate over deterministic models despite hybrid solutions providing the best results © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

Master Data Delivery During , EAI / EII / ETL vendors scurried to either add persistence to their products or align themselves with CDI-MDM vendors as a complimentary role by enabling customer data hubs to interweave data from multiple diverse master sources with master data persisted in a central hub Through , these vendors will thrive by providing increased throughput and additional repurposing & publishing capabilities to classical CDI-MDM solutions By , EAI / EII / ETL middleware will have been fully assimilated into broader CDI-MDM vendor community via M&A © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

Analytics During , data marts will continue to function as bridges across the void between operational, historical & analytical data to correlate customer information across multi-channels, LOBs, & internal trusted sources Through , ongoing evolution of enterprise data warehouse (EDW) & operational data store (ODS) to support trickle-feed update will increasingly blur the lines between real-time analytics & dynamic CDI-MDM style aggregation By , inline & real-time analytics derived from CDI-enabled aggregation of both transactional & historical data will have become major source of sustainable competitive differentiation for G5000 © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

Business Services/Workflow
During , CDI-MDM vendors will lag their BPM counterparts in providing workflow orchestration to synchronize the trusted sources that comprise a federated master data store Through , the mega CDI-MDM vendors (IBM, Oracle/Siebel, SAP) will struggle to provide BPEL-compatible workflows while the specialist CDI-MDM solutions rush distributed CDI-MDM capabilities to market Without such flexible workflows, organizations are merely rebuilding the same master data files they evolved the past years with their ERP &x CRM infrastructures © 2006 The CDI Institute The-CDI-Institute.com CDI-MDM MILESTONE

Industry-Specific CDI Requirements
Financial services providers (FSPs) Communications services providers (CSPs) Life sciences / pharmaceutical Government Healthcare High-technology manufacturing (t.b.d) Manufacturing (discrete, process) Retail (t.b.d) Hospitality (t.b.d) Early adopters of CDI solutions include: FSPs, CSPs, Pharma & High-Tech Manufacturing © 2006 The CDI Institute The-CDI-Institute.com

Why are Market-Leading FSPs Adopting CDI?
Optimize customer profitability Increase operational efficiencies Enhance regulatory compliance Improve overall BI Deliver ROI on CRM initiatives Provide “infrastructure rationalization” Facilitate growth-by-M&A FSPs must transform from customer-hostile, batch business model to give customers actionable 360º view in “near real time” © 2006 The CDI Institute The-CDI-Institute.com

Banking CDI Requirements
Business Drivers Technology Challenges Facilitate growth-by-M&A Comply with privacy mandates Improve compliance – e.g., AML, BXA, CIP 326, OFAC, SOX, … Increase sales productivity by modeling corporate hierarchies & structures of B2B customers Improve real-time portfolio view for both wealth management & internal risk management Increase customer satisfaction (retention/upsell) by streamlining routine customer maintenance Reduce IT infrastructure costs Increasingly complex business models (B2B2C) as “electronic storefronts” Demand for “near real-time” data lineage Rationalizing complex & dynamic business & individual hierarchies Hacker-proof customer data protection High-RAS (reliability, availability, scalability) nature of mission-critical infrastructure BXA - Bureau of Export Administration CIP 326 – Customer ID Program of USA PATRIOT Act OFAC - Office of Foreign Assets Control Customer view must prevail over product view as higher margin customers dictate common set of products & services via rapid adoption of CDI © 2006 The CDI Institute The-CDI-Institute.com

Retail Banking – Business Objectives
Provide single view of customer Across all channels Across all products Reduce operational costs Improve cross-selling Improve net credit loss Increase marketing lift Manage privacy centrally Provide operational view for Basel II compliance Provide improved customer service Streamline account opening process © 2006 The CDI Institute The-CDI-Institute.com

Retail Banking – Technical Requirements
Proven performance & scalability Service-oriented architecture Ability to handle complex hierarchies Ability to integrate to existing infrastructure Open architecture – J2EE compliant Proven functionality for services layer Existing CIF co-existence & eventual replacement strategy © 2006 The CDI Institute The-CDI-Institute.com

Retail Bank – CDI Solution Architecture
Web Self- service VRU Telemarketing Call Center ATM Branch Kiosk Personal Banker Front Office Customer Customer Customer Customer Customer Customer Customer Customer Application Server CDI Hub Data Integration EAI EII ETL RDBMS Server Consumer Deposits Credit Cards Wealth Management Customer Recognition Vendor Data Marts Data Warehouse Customer Customer Customer Customer Data Marts Back Office © 2006 The CDI Institute The-CDI-Institute.com

Retail Banking – Key Drivers
Improve cross-selling & campaign lift “Operationalize” marketing data Leverage service interactions into sales opptys by following up on current campaigns Regulatory compliance Providing operational view of customer into existing data warehouse for Basel II compliance Ability to store privacy preferences at a true enterprise level © 2006 The CDI Institute The-CDI-Institute.com

Retail Banking – Business Outcomes
Ability to act on customer knowledge Improved customer matching for customers with multiple risk-bearing products & improved benefits obtained from risk management Risk scoring improvements – better collections decisions Able to reduce costs based on reducing maintenance costs of legacy CIFs Improved accuracy & completeness of the customer data within CDI hub vs. existing CIFs (96% vs. 85%) Administrative cost reduction © 2006 The CDI Institute The-CDI-Institute.com

Key Business Benefits for FSP of “Product Information Pipeline”
Enhanced client reporting Improved timeliness Improved depth of product information (consultant support, consultant RFI responses, RFPs, fund fact sheets) Enhanced customer servicing via e-channel management Improved revenue generation opportunities Enhanced executive mgmt transparency into risk mgmt (sales pipeline info) Increased efficiency within Global Distribution functions (removing duplicated business processes, & improving speed & accuracy of key activities) Improved business retention rates across global markets, product segments & business channels PIP is complement of CDI by employing same technologies centered around “product” – much more than CRM is required © 2006 The CDI Institute The-CDI-Institute.com

Case Study: Major North American Bank
Business Issues Technology Solution Near term = cross-selling across product lines Longer term = customer service & retention Huge diversity of financial product lines Scalability of complex business model 10M+ retail consumer accounts 3K+ bank branches; 1K+ mortgage ctrs 25K+ internal users Custom-built CDI not keeping pace with market evolution Delivered workflow-based employee portal to integrate SFA, DW, BI, customer profitability, & loan pricing/approval applications Built on existing portal & message bus by incorporating new CDI technologies in R/T customer identification & data reconciliation plus cross-application process integration Coordinated multi-channel campaign mgmt, channel optimization, & advanced analytics Increased cross-sell revenue by US$700M across sales, marketing, & portfolio mgmt — reducing underperforming assets by US$12B © 2006 The CDI Institute The-CDI-Institute.com

Credit Card Issuer CDI Requirements
Business Drivers Technology Challenges Aggregation within industry – exacerbated by big commercial banks emulating major monolines Heavy reliance upon direct mail marketing – & inherent increased fraud risk Improve compliance – e.g., AML, BXA, CIP 326, OFAC, SOX, … Support future business objectives – e.g., M&A Ensure consistent customer service across all channels Private label cards needing lifestyle event-based differentiation Reduce IT infrastructure costs Integration of new & old channels – e.g., collections, fraud, contact centre with kiosk, ATM, IVR & online self-service Contingency planning for future technologies – e.g., biometrics, smartcards, etc. Complex hierarchy mgmt – e.g., household-level risk mgmt Scalability – e.g, ability to integrate new block of customers Infrastructure costs of integrating new data sources & channels Challenge is to move to portfolio-level integration despite the politics & technology inertia © 2006 The CDI Institute The-CDI-Institute.com

Case Study: Major U.S. Credit Card Issuer
Business Issues Technology Solution Reduce net credit loss Increase customer base Support M&A-based growth strategy Centralize privacy preferences management Reduce contact centre costs by providing “once and done” customer data management Ensure consistent customer service across all channels Deployed hybrid CDI hub — vs. front-end solution, data warehouse, or customer info file Integrated marketing campaign system to increase responses & increase customer base Managed privacy contact preferences in single location & provided to all channels — e.g., telemarketing, direct marketing, call centre, etc. Invested in strategic “SOA architecture” leveraged across entire enterprise Achieved competitive advantage in operational excellence over nearest competitors — “M&A ready” © 2006 The CDI Institute The-CDI-Institute.com

Insurance CDI Requirements
Business Drivers Technology Challenges Facilitate growth-by-M&A Comply with privacy mandates Increase deep understanding of data quality & reliability issues related to claims & fraud Embrace frequent regulation & de-regulation cycles – e.g., HIPAA, NPI Accommodate growing technical patchwork of proposed legislation – e.g., NHIN Reduce IT infrastructure costs Expand use of incumbent application systems (e.g., CRM) via enterprise customer identity service (universal key) across all applications Increase flexibility to add new channels, data sources, touch points, etc. via SOA High-RAS (reliability, availability, scalability) nature of mission-critical infrastructure Hacker-proof customer data protection HIPAA - Health Insurance Portability & Accountability Act NHIN - National Health Identification Number NPI - National Provider Identifier Insurers need to move to “high touch” service model wherein near real-time channel integration is critical © 2006 The CDI Institute The-CDI-Institute.com

Case Study: Major North American Insurer
Business Issues Technology Solution Increase quality of service via 360° customer view to support end-to-end, seamless business processes for call centres, claims processing, etc. Scalability of complex business model 5M+ policies 2M+ “customers” 3.5K+ agents 10K+ internal users Custom-built CDI not keeping pace with market evolution Selected “Buy” over “Build” of CIS extensions High performance identity management Extensible data model Support for complex hierarchies Data steward capabilities Faster time to market Lowest total cost of ownership Pioneered “chief customer officer” & “data steward” programs to drive design of core processes to focus on cross-enterprise customer view “Go live” 3X faster & 4X cheaper for “Buy vs. Build” (US$50M over 5 years) © 2006 The CDI Institute The-CDI-Institute.com

Top 5 Vendors’ Mindshare within Financial Svcs
© 2006 The CDI Institute The-CDI-Institute.com

Communications Services Provider Requirements
Business Drivers Technology Challenges Consolidation (M&A) Deregulation/re-regulation Increasingly "portable" customers Self-directed service to drive down customer care costs Real-time marketing & integrated campaign management using predictive analytics Fraud detection Bill presentation Ability to blend channels Complex supply chains Onerous regulatory mandates Extreme scalability in call centres, provisioning, etc. Flood of data due to ‘data services’ “Plan anywhere, build anywhere” investment strategies in new technologies that enable quicker new product introduction (NPI) at lower cost without sacrificing quality Telco evolution will be radical as intense competition in wireless, LD, Internet, & local service commoditizes products & slashes profits – not to mention VoIP © 2006 The CDI Institute The-CDI-Institute.com

Top 5 CDI Vendors’ Mindshare within Telco

Survey Overview: “ROI Strategies for CSP’s M&A”
10+ North American CSPs – e.g., cable carriers moving into telephony, CLECs, ILECs, LD carriers, wireless, & conglomerates 100% with > 1M subscribers 50% > 5M subscribers >75% are investing in CDI in support of stated corporate target to reduce “level of infrastructure investment” with 49% stating CDI to be either important or critical to this outcome 30% had COTS software for CDI installed with the remainder actively evaluating an enterprise-wide solution Tactical ROI Saving substantial integration costs Improving flexibility & control to enhance overall system performance Accelerating time-to-market of CRM, SCM, & PIM solutions Reducing overall project risk Strategic ROI Understanding & predicting customers’ behaviours Identifying & deflecting competitors’ moves Integrating supply chains with key business partners Forecasting & acting on new opportunities as a “first mover” COTS = commercial, off-the-shelf software M&A demands comprehensive & integrated profiles © 2006 The CDI Institute The-CDI-Institute.com

CDI MarketPulse™ Findings: “Corporate Issues” How do you RANK your company's DESIRED STRATEGIC RESULTS resulting from M&A? Source: CDI Institute 1H2005 MarketPulse™ Survey of 12 North American CSP’s IT Organizations For strategic M&A, “Market dominance” cited twice as often as next highest ranked “Increased profitability”, “Increased operational efficiencies” & “Corporate alignment” © 2006 The CDI Institute The-CDI-Institute.com

CDI MarketPulse™ Findings: “Marketing Issues” How do you RANK your company's DESIRED “MARKETING” OUTCOMES resulting from M&A? Source: CDI Institute 1H2005 MarketPulse™ Survey of 12 North American CSP’s IT Organizations “Enable product bundling” 50% more important as “Systematize analytics to determine customer, segment, bundle, & product line profitability” – yet 60% expect CDI solution to integrate with BI or enterprise DW during first year © 2006 The CDI Institute The-CDI-Institute.com

CDI MarketPulse™ Findings: “Technology Issues” How do you RANK your company's MAJOR TECHNOLOGY CHALLENGES resulting from M&A? Source: CDI Institute 1H2005 MarketPulse™ Survey of 12 North American CSP’s IT Organizations “Legacy application integration (CRIS, LEIS, LEIM, USOCs)” rated at least 33% more important than “Business process/workflow integration” & “Database/data model integration” © 2006 The CDI Institute The-CDI-Institute.com

CDI MarketPulse™ Survey Findings
CSPs must acknowledge state-of-IT-affairs resulting from continuous M&A CDI provides proven means to insure ROI of M&A – especially in CSP industry with historically fragmented customer & product master DBs Market-leading CSPs are planning to apply CDI as disruptive technology to “outmarket & outservice the competition” “Build vs. buy” has become “buy mega vendor” vs. “buy best of breed” as ITOs are mandated to move away from home-grown CDI solutions to COTS solution During , CSPs will focus on deploying data-centric CDI infrastructure to provide unified customer view across multiple channels & LOBs During , CSPs will move to process-centric CDI infrastructure to deliver increasingly accurate, complex & just-in-time unified customer views to enable bundle mktg & self-directed customer care CSP evolution will be radical as intense competition in wireless, LD, Internet, & local service commoditizes products & slashes profits – not to mention VoIP © 2006 The CDI Institute The-CDI-Institute.com

Pharma/Life Sciences Business Imperatives
360° View of Customer Improve productivity of pharma sales reps Coordinate sales & operations planning via common infrastructure & goals/metrics Increase customer/physician acquisition, retention & profitability Reduce info management overload/costs Prepare for uncertain future Primary Care Physicians / Account Based prescribers such as Emergency Room doctors … Primary Care Physicians prescribing our/competitor products Specialty Physicians prescribing our/competitor products Contracted Accounts (hospitals, nursing homes) Group Purchasing Organizations Pharmacy Directors / other Influencers Specialty Distributors Wholesalers Specialty Pharmacies Recent survey indicates physicians need info to make more informed buying decisions – but only about 1/3 consider pharma sales reps impt sources; 1/3 found sales visits helpful, addt’l 1/3 want more current comparative or clinical data/analyses relevant to practices, plus objective info on usage & side effects © 2006 The CDI Institute The-CDI-Institute.com

Life Sciences / Pharma Technology Challenges
CRM alone is not enough DW+CRM is not enough Importance of flexible workflow Dis-intermediated data sources Data service providers (IMS, NDC, AMA - cleansing, matching issues) Industry standard identifiers (IMS, DEA, state licensing) not always accurate Where does content mgmt system end & where does the structured data mgmt start? Market-leading Pharmas must unify physician/customer information from multiple systems & business units in a robust data model specific to pharmaceutical industry © 2006 The CDI Institute The-CDI-Institute.com

Improve Productivity Of Pharma Sales Reps
Enable sales reps to improve sales effectiveness by leveraging client sales histories & profile info from diverse sources Automatically capture physician info during sales meetings Spend more time in the field – serving physicians – rather than in the office recording & analyzing meeting results Enable physicians to make more informed purchasing decisions by offering customized product info, evidence gathered thru clinical research, & comparative analyses of medicines Ensure more effective territory mgmt to yield more successfully market & sell products thru efficient call handling & better cross-channel communication & coordination Making sales reps more productive, requires a complete picture of the physician profile, mktg activities, etc. – database-centric quasi batch CDI is first step © 2006 The CDI Institute The-CDI-Institute.com

Coordinate Sales & Operations Planning Via Common Infrastructure & Goals/Metrics Monitor real-time performance of sales force to quickly make strategic & tactical adjustments necessary to meet sales goals & provide adequate product inventory Employ RFID technology & the EPC Network to improve info mgmt in pharma supply chain Make M&A work via vital agglomeration of customer & supplier master data Integrate IT infrastructure of diverse acquisitions Leverage info, insights & relationships to expedite & enhance product intro & adoption Overcome cultural obstacles to creating better collaboration between Clinical & Marketing organizations Insure supply chain integrity protection for producer & patient (& everyone in between) Protect the pharma enterprise involved in ever more complicated contracts with external partners CDI needed that not only provides excellent support for sales reps, but also makes customer info available to marketing, R&D & supply chain functions © 2006 The CDI Institute The-CDI-Institute.com

Increase Customer/Physician Acquisition, Retention & Profitability via Closed Loop Mktg Enable creation of segment-specific drug detailing aids Deliver custom detailing to physicians thru field sales channel Collect responses to product messages at point of customer interaction Analyse responses to further refine marketing campaigns based on real-time feedback Design & manage sophisticated campaigns, incl medical events & mailings Closed-loop marketing capabilities align mktg & sales business processes, enabling companies to target & segment customers, design & execute mktg campaigns, & analyse customers' responses to product messages © 2006 The CDI Institute The-CDI-Institute.com

Reduce Information Mgmt Overload/Costs
Pharma Info Overload Manage exploding amount of data produced in every part of pharma enterprise CAPA, RFID & ECM data 21 CFR Part 11 HIPAA Share & store discovery & development data in environment with onerous legal requirements for data retention & mgmt Generate structured analysis out of unstructured content Manage outsourced clinical trials Complexity is that some tasks but not all are outsourced for given trial cGMP = current good manufacturing practice CAPA = corrective and preventative action programs 21 CFR Part 11 =The USA’s Food and Drug Administration's Electronic Records and Electronic Signatures Rule, published as 21 CFR Part 11, requires companies in the pharmaceutical, biotechnology, medical product, cosmetic, food, and fine chemical industries to meet strict requirements for maintaining electronic records and ensuring the validity of electronic signatures. Companies must implement a validated system in which electronic records and signatures are trustworthy, reliable, secure, and as legally binding as paper records and written signatures. Both physician & consumer data are intricately related as part of information asset programs which must keep regulatory risk & validation costs to a minimum © 2006 The CDI Institute The-CDI-Institute.com

Prepare for Uncertain Future
Leverage digital packaging (RFID, ECM) for compliance monitoring & supply chain optimization Optimize consumer self-service Apply advanced technologies to expedite info sharing via guided search, co-browsing, etc. Helps consumers benefit from full range of info about health issue they’re researching Enables pharma to deliver targeted info to customers at precise moment needed or requested Examples: medical education; disease mgmt; patient compliance; product awareness Drive & manage regulatory compliance across diverse legal domains Prepare for increased outsourcing of both commoditized & specialized functions Exploit strategic opportunities created by bioinformatics/ nanotechnology Leverage re-importation trends Recent studies report that the cost of serving customers through Web-based self-service is between 18 cents and $1.00, while the cost of a live operator is between $4 and $15. CDI growth + Pharma growth = CDI 2 © 2006 The CDI Institute The-CDI-Institute.com

Legacy Pharma “Info Supply Chain”
SMG SAP Contracting Sales Targets Some sources flow to ODS & DW AMA DEA STL ODS CARS Some sources are not integrated OSP IMS Events Siebel Call Centre Web DW Some sources flow straight to the DW Dendrite Wholesaler Fed Govt ODS = operational data store DW = data warehouse CARS = xxxx Front Office “Treading water …” Back Office External Source © 2006 The CDI Institute The-CDI-Institute.com

Contemporary Pharma “Info Supply Chain”
HIN SMG SAP Contracting Sales Targets AMA DEA STL CARS CDI Registry/ Hub OSP IMS Siebel Events All *reference* data flows through CDI Registry/Hub Active Data Warehouse Call Ctr Web Dendrite Wholesaler Fed Govt Front Office “Future-proofed …” Back Office External Source © 2006 The CDI Institute The-CDI-Institute.com

Top 5 Mindshare within LifeSci/Pharma

Government CDI Requirements
Self-service to drive down customer service costs Integration of transactional, unstructured, geospatial, & demographic data to optimize public services (& national security) Imperative placed on most government agencies to collaborate & share info Newly-created enhanced knowledge repositories, tools, & processes critically needed for meeting new public policy requirements Need to positively ID & track individuals across languages & cultures Integrated Analytics Public Data Private Data CDI Derivative Data Government entities must apply citizen data integration best practices from private industry – while using extreme caution concerning privacy & security © 2006 The CDI Institute The-CDI-Institute.com

Mission-Critical Citizen Data Integration (CDI)
Key technologies Anonymous entity resolution (name classifier & hunter) Business intelligence (perpetual analytics) Dynamic scoring Link analysis (° of separation) Grid scalability Data mining Text mining Real-time report streaming Voice/text analysis Key vendors Initiate Systems Language Analysis Systems MetaMatrix Salford Systems SAS SPSS Superstructure Systems Research & Development The Distillery Additional challenges for gov’t include: scalability (scale, # & heterogeneity of DBs), “very large scale” turf battles, lack of national ID in US, supra-politics © 2006 The CDI Institute The-CDI-Institute.com

Regulatory Juggernaut & U.S. Initiatives
Klinger-Cohen Act Office of Foreign Assets Control (OFAC) Bureau of Export Administration (BXA) lists of sanctioned governments, organizations, individuals USA PATRIOT Act In-Q-Tel venture capital fund Digital collection system 1000 (FBI's “Carnivore”) CAPWIN project for the metro District of Columbia region emergency response system Terrorist Threat Integration Centre During , government will be stressed to analyse citizens’ behaviours to support national security initiatives – & will increasingly turn to commercial IT sector for “outside the box” thinking & best practices © 2006 The CDI Institute The-CDI-Institute.com

Top 5 CDI Vendor’s Mindshare within Public Sector

Why are Healthcare Providers/Payers Adopting CDI?
“Most other economic sectors have used IT to become integrated & more efficient. Healthcare, too, can be transformed.” Leonard D. Schaeffer, Chairman & CEO WellPoint Health Networks Keynote Address at 2004 Health Information Technology Summit Optimize customer profitability Increase operational efficiencies Enhance regulatory compliance Improve overall BI Deliver ROI on CRM initiatives Provide “infrastructure rationalization” Facilitate growth-by-M&A Clearly, healthcare payers don’t know enough about their “customers” — physicians, members, & employers – i.e., healthcare payers have not been pushed on customer service issues because they historically were near-monopoly in their geographies © 2006 The CDI Institute The-CDI-Institute.com

Healthcare Payer/Provider CDI Requirements
Business Drivers Technology Challenges Ongoing consolidation straining capacity of batch-centric processes Corporate boards & investors reluctant to provide capital for major up-front investments Frequent regulation & de-regulation cycles – e.g., HIPAA & NPI, NHIN Shorter economic ”product” lifecycles – e.g., FSAs Increased competition -- e.g., offshore Rx fulfillment, NFPs becoming “for profit” Morphing member base demographics – aging “baby boomer bubble”, “Gen X”, etc. Ever increasing QoS expectations Need to react intelligently & instantly to changing “customer” information such as claims processing & medical mgmt Requirement for deep understanding of data quality & reliability issues as it relates to eligibility, claims, & fraud Necessity for a enterprise data model across disparate sources & applications to support complexity of healthcare business model HIPAA - Health Insurance Portability & Accountability Act NPI – national provider identifier NHIN - national health identification number Healthcare master customer data must be the most accurate, up-to-the-minute source of customer information & must feed downstream systems (e.g., claims processing) as well as external vendors. © 2006 The CDI Institute The-CDI-Institute.com

Healthcare Payer/Provider CDI Scorecard: “Top 3” Business Drivers

Healthcare Payer/Provider CDI Scorecard: “Top 3” Technology Challenges

HCP CDI Implementation Characteristics
CDI Dimension Healthcare Payer Specifics Number of customers 3 million members; 1.6 million providers Primary application vendors Siebel call centres Home-grown membership and eligibility management Databases sharing master customer (member, provider) data Member data management Eligibility management Claims case management Disease management Provider data management Contract and credentialing Pharmacy benefit management External partners sharing customer data Service providers’ prescription benefits management New or enhanced positions arising from CDI Enterprise data architect Customer master data custodian Data quality steward © 2006 The CDI Institute The-CDI-Institute.com

“Top 10” CDI Evaluation Criteria
Customer data model Business services Identity management Data management Architecture Infrastructure Connectivity Analytics Developer productivity Vendor integrity Infrastructure fracas will escalate as mega app vendors rush to dominate business services/processes & data models as high ground © 2006 The CDI Institute The-CDI-Institute.com

Top 10 Evaluation Criteria within Global 2000

#1 Criteria = Customer Data Model
Multi-party model to support complex roles & relationships Demographic profile (name, address, phone number, marital status, etc.) Roles & relationships between parties (including company hierarchies) Additional related entities (entitlements, products, preferences) Data heritage, change history & survivorship Regulatory & privacy rules Industry-specific (vertical) extensions Ability to import industry standard or custom-built data models – e.g., IBM IAA, OASIS CIQ, Siebel CIF, Hogan CIS Depth & breadth of data model – plus ability to adapt statically & on-the-fly – provide a solid CDI foundation © 2006 The CDI Institute The-CDI-Institute.com

#2 Criteria = Business Services
External workflow engine & web services transaction support – e.g., business process management (BPM) Rules engine End-to-end support with operational applications Business semantic-driven horizontal customer processes – e.g. add party, change address, retire customers “Best practice” templates for both horizontal & vertical customer – e.g., related processes Compatibility with existing infrastructure investments – e.g., Tibco, MQ-Series, etc. Standards – e.g., OMG’s Model-Driven Architecture (MDA), WS-Coordination, WS-Transaction, & BPEL Functionality & extensibility of business services are critical evaluation criteria for CDI solutions – longer term “process hubs” are the goal © 2006 The CDI Institute The-CDI-Institute.com

#3 Criteria = Identity Management
Very high performance matching/aggregation/search Ability to generate or incorporate “universal” master keys Cross-reference management – e.g., 1:M support, enforcement of cross-referencing Support for all identity types – e.g., individual, household, organization Change detection and event mgmt – e.g., propagation & validation, in-doubt resolution Support for privacy regulations – e.g., SB-168 (remediation of SSN off of any public document Non-obvious/intrusive entity resolution Smart matching plus effective human intervention – & automated actions – yield better identity mgmt; the bigger & more distributed the company, the more complicated the hierarchy mgmt problem © 2006 The CDI Institute The-CDI-Institute.com

#3.5 Criteria = Hierarchy Management
Recognizing, investigating and maintaining complex business relationships by identifying associated individuals within the context of their corporate structure or hierarchy Navigating complex hierarchies from individual to a full hierarchy view Classifying current business customer relationships according to a hierarchy maintained by externally trusted sources of business information Searching, retrieving, viewing and modifying hierarchical relationships and presenting this information to external users and applications New organizational hierarchy mgmt capabilities help solve this global account mgmt problem by providing the most accurate, scalable & easily deployed solution for enterprises that need to understand the true & total value of each customer relationship © 2006 The CDI Institute The-CDI-Institute.com

#4 Criteria = Data Management
Consolidation & survivorship rules (intelligent merge/unmerge) Application- & role-level authorization End-to-end data mgmt processes to enforce data quality Data cleansing Address cleansing & standardization Pre-built integration to leading DQ tools Closed loop-DQ Data profiling Central enforcement & tracking of DQ Integration with Web-enabled aggregator data Complex, long running transaction Support for multiple master data types – e.g., reference, transactions Comprehensive set of customer attributes for complete profile History & audit trails Goal is to create end-to-end data mgmt processes that may be invoked by other major customer facing subsystems in addition to CRM package © 2006 The CDI Institute The-CDI-Institute.com

#5 Criteria = Architecture
Multi-modality architectures Virtual/registry Persistence Confederation Multi-modal security Profile access control Integration with security of DB, CRM & ERP Role-based user rights mgmt Compliance with regulatory mandates Given the generational evolution of CDI styles, it is vital to select a CDI solution specifically tuned for a given set of long term CDI requirements © 2006 The CDI Institute The-CDI-Institute.com

#6 Criteria = Infrastructure
Scalability – e.g., in-memory or cache DBs; just-in-time aggregation Manageability - e.g., system management & monitoring tools Accessibility – e.g., ability to service wide-range of performance levels Availability – e.g., resilience to various failure situations such as hardware & network outages; continuous data maintenance/ synchronization As “single point of failure” asset, CDI internal infrastructure has all the requirements of mission-critical applications & must be evaluated so © 2006 The CDI Institute The-CDI-Institute.com

#7 Criteria = Connectivity
Rigorous multi-model support for all integration modes Real-time Tightly-coupled (COM, Java, CORBA) Loosely-coupled (IBM MQ Series, XML/HTTP, integration servers) Near real-time Loosely-coupled (IBM MQ AMI, XML/HTTP, integration servers) Batch EDI, RosettaNet Pre-packaged integration processes & templates Intelligent routing – e.g., alerts, content-based routing & pub-sub CDI solutions should provide rigorous multi-model support for all usage/integration modes © 2006 The CDI Institute The-CDI-Institute.com

#8 Criteria = Analytics Customer segmentation & targeting for cross-sell & up-sell In-line analytics for closed-loop marketing Data profiling to manage “degree of trust” associated with given master customer data source (e.g., completeness, uniqueness, accuracy, & lineage) No longer are batch-oriented data marts or data warehouses sufficient to provide fundamental analytics necessary to drive customer profitability & value assessments (to enable JIT & differentiated service) © 2006 The CDI Institute The-CDI-Institute.com

#9 Criteria = Developer Productivity
Life-cycle approach Systems management tools Change management Software distribution Testing CMM compliance Methodology CDI ultimate goal is user-driven rules management, yet IT professionals (data stewards, et al) must set up & fine-tune this mission-critical infrastructure © 2006 The CDI Institute The-CDI-Institute.com

#10 Criteria = Vendor Integrity
References vs. proof-of-concepts Professional services – work done by IT vendor to assist in the delivery of solution via methodology, process, skills transfer, etc. Quality Breadth Customization Corporate agility – Ability to respond, change direction, etc. in Responsiveness/Development Processes/Flexibility Personnel – Mix of skills, expertise, experience, etc. Leadership/available skills Expertise/intellectual property Financials – Combo of financial resources, liquidity, etc. Access to capital Profitability Growth rate CDI solutions have all the requirements of mission-critical applications – vendors must be evaluated so © 2006 The CDI Institute The-CDI-Institute.com

Minor, Yet Relevant CDI, Players
Actuate/Nimble Technology (Data Lens, Nimble Integration Suite) Apama (Apama Engine) AptSoft (AptSoft Director) Blackrock Solutions Business Objects (Data Integrator/Firstlogic) Celequest (Activity Suite) Choicepoint Chordiant (Chordiant 5 Enterprise Platform) Contivo Data Foundations (OneData) DataMirror (Constellar Hub/ Transformation Server) Dun & Bradstreet E.Intelligence eConvergent (eMerge) Enkata (Enterprise Insight Suite) GoldenGate Software (Global Data Synchronization) Group 1 (Sagent Data Flow) Harte-Hanks (AllLink, Trillium) InfoUSA/Donnelley Marketing (InfoConnect) Intelligent Results MetaTomix (Real-Time Visibility Suite) Modulant (Contextia™ Connection Server) Nimaya Novell (Customer OneView) Polk Sedona (Intarsia) SPL (CorDaptix) Sun (SeeBeyond Business Integration Suite) Tibco/ObjectStar/Velosel Vitria (Businessware) Xoriant © 2006 The CDI Institute The-CDI-Institute.com

Competitive Field Reports**
Data Foundations OneData i2/Teradata MDM IBM Customer Center Initiate Systems Identity Hub Kalido MDM Oracle Customer Data Hub Oracle-Siebel UCM Purisma SAP MDM SAS/DataFlux Siperian MRM ** Persisted data hubs with minimum 5 installs © 2006 The CDI Institute The-CDI-Institute.com

Field Report: Data Foundations OneData
Strengths Full lifecycle with DG framework Integrated customer, product & vendor master data Data model flexibility Full SOA Focus on MDM & reference data Sophisticated hierarchy mgmt – relationship charts, rules mgmt Price Weaknesses Lack of strong SI channel Under invested in marketing Lack of CDI references © 2006 The CDI Institute The-CDI-Institute.com

Field Report: i2/Teradata Master Data Management
Strengths Full lifecycle Integrated customer, product & vendor master data Full SOA Retail & mfg expertise Data model flexibility Focus on MDM Teradata partnership Weaknesses Lack of strong SI channel Under invested in marketing Lack of CDI references © 2006 The CDI Institute The-CDI-Institute.com

Field Report: IBM WebSphere Customer Center (DWL)
Weaknesses BPM story is weak Only deterministic matching (until QualityStage integration 1Q2007) “Forced fit” with WebSphere family (Product Center, Integration Center) Strengths 3rd gen supporting both data & process hub models Financial services expertise Public references BellCanada, CitiBank, COUNTRY, MetLife, Nationwide, SunTrust, UnumProvident Momentum BankAmerica, Carlson, Staples, … Robust web services solution; IBM software stack sycophant IBM BCS channel © 2006 The CDI Institute The-CDI-Institute.com

Field Report: Initiate Systems Identity Hub
Strengths Fast time-to-value Public references Countrywide, Hyatt, Intuit, Microsoft, US VA, … Healthcare, hospitality & retail pharmacy expertise Probabilistic matching Real-time match scalability Fast growth curve via new business Weaknesses Lack of strong SI channel Under invested in marketing Persistence story unsubstantiated Lack of integrated DQ © 2006 The CDI Institute The-CDI-Institute.com

Field Report: Kalido MDM
Strengths Public references BP, InBev, Owens Corning, Shell, … MDM methodology Reference data support Weaknesses Lack of strong SI channel Under invested in marketing Enterprise DW positioning overlay © 2006 The CDI Institute The-CDI-Institute.com

Field Report: Oracle Customer Data Hub
Strengths Mid-market references BBC-TV, Church Pension Group, IHOP, Master Lock, Network Appliances, The CIT Group, … High-tech mfg expertise Executive-level commitment Trading community architecture Integrated DQ & analytics Future integration with Oracle DB Weaknesses High-end references Only supports Oracle workflow Fair-to-meek customer recognition capability Limited “read” security Best fit is mid-market and B2B Lack of industry-specific data models © 2006 The CDI Institute The-CDI-Institute.com

Field Report: Oracle-Siebel Universal Customer Master
Strengths Dedicated sales force Retail banking expertise Fast growth via add-on business to SFA/CRM/UAN “Nexus” next gen (SCA) composite architecture Integrated DQ & analytics Future Oracle integration Weaknesses Public references Only ENI, MCI, SARS, … Loss of Siebel staff due to M&A Perceived issues in scaling © 2006 The CDI Institute The-CDI-Institute.com

Field Report: Purisma Customer Registry
Strengths Hierarchy management B2B model Business Objects integration partnership Cross investments (Informatica, Hyperion, …) Weaknesses Lack of strong SI channel Under invested in marketing Scarce references © 2006 The CDI Institute The-CDI-Institute.com

Field Report: SAP NetWeaver Master Data Management
Strengths “Name” references McKesson, Nortel, Rubbermaid, Whirlpool, … Supply chain expertise Product information management focus Image management (catalog publishing) New capabilities via acquisition e.g., A2i (xCat System), Callixa, … Weaknesses Lack of strong SI channel Under invested in marketing Overcommitted to product/supplier theme vs. customer/employee (due summer 2006 with MySAP CRM data model) © 2006 The CDI Institute The-CDI-Institute.com

Field Report: SAS/DataFlux
Strengths Integrated DQ Multi-entity data model Data governance SAS “deep pockets” SAS channel SOA Scalability reference via Amgen Weaknesses Minimal references Lack of SI channels Lack of BPM/workflow for “policy hubs” © 2006 The CDI Institute The-CDI-Institute.com

Field Report: Siperian Master Reference Manager
Strengths Public references Allergan, DTCC, Genentech, Lexis Nexis, Pfizer, Roche, SanLam, State Street Bank, … Pharma expertise Data model flexibility Hierarchy management Weaknesses Lack of strong SI channel Under invested in marketing Focus on batch vs. just-in-time “Pharma-centric” © 2006 The CDI Institute The-CDI-Institute.com

Bottom Line Acknowledge that no one does it all “well” Customer vs. product B2B vs. B2C vs. B2B2C Batch vs. real-time Industry expertise matters Test drive matching & consulting expertise Apply data stewardship tools for business users as vital for long-term data sustainability © 2006 The CDI Institute The-CDI-Institute.com

CDI Case Study: United Airlines’ “Enterprise Customer Profile”
Business Issues Technology Solution Major challenge in customer knowledge & treatment Customer profile info gathered through various customer touch points, but not synchronized nor available to all channels Expand common PW across channels — IVR & wireless Need to increase customer satisfaction & loyalty by making amends to customers’ disservice (e.g., lost bag or delayed flight) Highly available & scalable architecture to support required OLTP levels Integration among second-generation CRM interactions for key systems, including reservations, frequent flyer, call centre — across key channels (Web, wireless, & phone) Coordinated multi-channel campaign mgmt, channel optimization, & advanced analytics Became 1st airline to offer booking capabilities via wireless Internet devices — available instantly via same customer PW & personal info from Web site © 2006 The CDI Institute The-CDI-Institute.com

Case Study: CitiCard’s “Enterprise Customer Hub” (ECH)
Business Issues Technology Solution Reduce net credit loss Increase customer base Support future business objectives (e.g., M&A) Reduce operating expenses Gain competitive advantage over closest competitors Ensure consistent customer service across all channels Invest in strategic “architecture” leveraged across entire enterprise Deployed ECH — vs. front-end solution, data warehouse, or customer info file Integrated marketing campaign system to increase responses & increase its customer base Managed privacy contact preferences in single location & provided to all channels — telemarketing, centre marketing, call centre Achieved competitive advantage in operational excellence over nearest competitors — “M&A ready” © 2006 The CDI Institute The-CDI-Institute.com

Case Study: Fleet Financial’s “Real-Time Customer Data Mgmt”
Business Issues Technology Solution Need to integrate customer data, processes, & views across disparate CRM applications Challenged by inter-app data & process integration issues requiring adoption of new CDI technologies Need for employee portal as single point of access to multi-app customer views Leverage of existing investments in Oracle, Sun, Siebel, MicroStrategy plus many in-house built apps Delivery of workflow-based employee portal to integrate SFA, DW, BI, cust. profitability, loan pricing/ approval & document mgmt apps Build on existing portal infrastructure by incorporating new CDI technologies in R/T cust. data reconciliation & inter-app process integration Increased cross-sell revenue by US$700M across sales, marketing, & portfolio mgmt — reducing underperforming assets by US$12B © 2006 The CDI Institute The-CDI-Institute.com

CDI Case Study: Intuit’s Party Reference System
Business Issues Technology Solution Major challenge in customer knowledge & treatment Tens of millions of customers, thousands of which interact with company every day via multiple call centres, web sites & service/support accounts Had to pull customer data from six separate systems into a single registry, & then scrub & merge data while maintaining already recognized existing relationships R/T identity mgmt capable of scaling to 100 million customers with sub-second response times for customer-facing applications “Federated” approach with individual business lines keeping ownership of master customer data & subscribed to data feeds from central system Core business services were subsequently developed by corporate IT to support centralized DQ & identity mgmt via SOA Loosely-coupled architecture comprised of “party reference system” business services allowed for distributed autonomy across LOBs while centrally maintaining “trustworthy” data © 2006 The CDI Institute The-CDI-Institute.com

Key Business Outcomes for Intuit
Reduced software costs for data standardization because they can now verify against one source instead of six Reduced direct mktg costs by due to elimination of duplicate & redundant customer records Increased cross-sell & up-sell revenue by having a complete picture of customer's account at various points of service Reduced customer churn by materializing more accurate records “on demand” & “just in time” to resolve more billing & support issues faster Increased customer privacy compliance requests by applying privacy wishes from two existing systems to four additional systems Reduced hardware & software fees by reducing volume of master customer records under management & thus all related storage, maintenance & development costs By customizing commercial CDI solution over a period of 6+ months, mfgr reengineered entire end-to-end customer processes to enable it to better serve its customers & grow its business © 2006 The CDI Institute The-CDI-Institute.com

Intuit’s CDI Implementation Characteristics
Dimension Description Number of customers 50 million parties/customers Primary Application Vendors Siebel call centre, Oracle financials Number of business units sharing master customer data Six business lines Peak match/merge rate 150 transactions per second against 150 million call centre records 3rd party data sources to aggregate D&B, Experian, marketing data providers Business partner data sources to integrate D&B, Verisign, Wells Fargo Unique fields kept in central customer master Customer privacy preferences, and contact addresses, housekeeping data New or enhanced positions arising from CDI Data custodian, data quality steward Next stage in CDI evolution More robust fail-over capabilities; increased administrative capabilities for exception handling © 2006 The CDI Institute The-CDI-Institute.com

Bottom Line: Active BU Participation in Data Governance & Data Steward Functions is Vital Plan for IT organizational change mgmt to support CDI/MDM efforts Work with business leadership to design & refine the “future state” business processes associated with new CDI/MDM commitments To a greater degree than traditional application development initiatives, organizational readiness & acceptance has huge impact on both success & sustainability of CDI/MDM initiative Without C-level support, BUs will find it difficult to contribute funding & resources necessary to launch a CDI/MDM initiative – resulting in status quo with each business unit continuing to address issue at division-level (if at all) After initial development of a CDI/MDM system, continued support by BUs is essential & must include: Ongoing participation in development of business rules and resolution of master data match/merge issues Ongoing commitment to update both applications and business processes to leverage core data stored in master data hub © 2006 The CDI Institute The-CDI-Institute.com

How to Leverage the CDI Institute
Kickstart the “CDI evaluation process” Attend public workshop Bring workshop on-site Finetune in-process CDI strategies Due diligence on reference checking & contract details Stay ahead of curve via CDI Business Council Re-qualify every 6 months via survey Receive CDI News Alerts and access to Web-hosted research Increase your CDI knowledge & negotiating strengths via CDI Advisory Council Membership Participate in monthly surveys & receive updated industry scorecard Receive unlimited CDI consultation via telephone “Independent, Authoritative, & Relevant” © 2006 The CDI Institute The-CDI-Institute.com

Authoritative Independent Relevant
Aaron Zornes Founder & Chief Research Officer The CDI Institute The-CDI-Institute.com a.k.a. Authoritative Independent Relevant © 2006 The CDI Institute The-CDI-Institute.com

Customer Data Integration & Master Data Management Summit London 2006

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Customer Data Integration & Master Data Management Summit London 2006

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