100 TOP DATA WAREHOUSING LEADERS STEP UP
By Jeff Moad
Top executives at shipping giant United Parcel Service of America Inc. don't have to work very hard to come up with good reasons to continue increasing investments in data warehousing hardware and software. All they have to do is cast their memories back to just over a year ago. As the $22.5 billion company struggled to recover from one of the most devastating labor strikes in its history, UPS marketing officials were able to tap into a secret weapon: a 400GB data warehouse containing up-to-the-minute customer information.
Using an intranet to access the company's so-called Information Library, UPS officials across the country were able to quickly target key customers and encourage them to come back to UPS after the strike. The strategy delivered, big time. Last January, just five months after the strike was settled, UPS was back to shipping as many as 17.2 million packages per day--well above the Atlanta-based company's official projections.
"Info Library really helped out," said Tam Schwartz, director of data warehousing and Internet architecture at UPS, in Mahwah, N.J. "Now, we're working on several other customer-centric data warehousing applications. We're basically driving our customer-focused marketing campaigns out of the warehouse. ... More and more, it's becoming the lifeblood of the organization."
For many large companies such as UPS, getting demonstrable payback from data warehousing has not come quickly or easily. UPS, for example, kicked off its data warehousing efforts back in 1994 with a massive, companywide data quality and standards campaign. The company, like many others, has been at it ever since. And, for a growing cadre of IT innovation leaders, the investments in data warehouses, data marts and other advanced information management technologies are beginning to pay off.
In this special report, PC Week identifies that group of top innovative users of data warehousing technologies. Called the Fast-Track 100 list of Information Management Innovators, the report lists, in order, the companies that are squeezing the most value out of their corporate data assets. The report also explores the technologies, best practices and strategies they're using.
So how did PC Week come up with this list of the 100 top information management innovators? As in previous Fast-Track projects, sister company ZD Market Intelligence, in La Jolla, Calif., was a partner, making available its rich database of IT deployments at 250,000 corporate sites in North America. A scoring model was designed that rewards companies that are using innovative tools to build large, enterprise-class data warehouses. The model emphasized deployment of data warehouses, data marts and data analysis tools broadly, across many sites in the enterprise. Then, based on information in the ZDMI database and using the model, scores were generated for each enterprise and companies were ranked according to their score.
The enterprises that made the Information Management Fast-Track 100 are, in many ways, not a surprise. They tend to be larger organizations that generate lots of customer, product or market data. Wells Fargo & Co. (No. 7), Anheuser-Busch Inc. (No. 22) and GTE Corp. (No. 41) as well as UPS (No. 95) all made the list. Information Management Fast-Track 100 companies were distributed across a range of industries, with manufacturing claiming the largest number of slots.
A closer look, however, shows that many Information Management Fast-Track 100 companies had one thing in common: an increasing need to pull together data from historically distributed, isolated operations to improve efficiency and enhance cross-selling opportunities. In some cases, that need has been accentuated by merger and acquisition business strategies. Wells Fargo, BP Amoco plc (No. 38), DaimlerChrysler AG (No. 48), Citigroup Inc. (No. 52), MCI WorldCom Inc. (No. 53) and Chase Manhattan Corp. (No. 70), for example, are all products of mergers.
But mergers aren't the only factor causing Information Management Fast-Track 100 companies to bring data from different parts of the enterprise together in a central, easy-to-access warehouse. Intense competitive pressures and the need to drive down costs and generate new products faster are also behind the information management momentum at many Fast-Track companies. The No. 1 Information Management Fast-Track organization, Blue Cross and Blue Shield Association, is a good example. The health care giant is well on its way to building a massive data warehouse that combines treatment and result information from 52 affiliated companies nationwide, providing health care services to 71 million customers.
Information Management Fast-Track 100 companies are also increasingly focusing their data warehousing efforts on collecting and using customer information. While companies such as UPS initially wanted to analyze information about internal operations to improve efficiencies, they're now beginning to look outside, to their customers. Organizations such as Prudential Insurance Co. of America (No. 14), for example, are creating large, enterprisewide data warehouses that combine customer preference and historical information from several lines of business. Then, using advanced querying and data mining tools such as SAS Institute Inc.'s SAS Enterprise Miner, Prudential is identifying cross-selling and even new product opportunities, according to Vice President for IS Pat Komar, in Roseland, N.J.
Similarly, brewing giant Anheuser-Busch is beginning to populate its data marts with detailed information from the retail channel. The company's sales and marketing organizations will then tap that data to improve marketing campaigns. "We have proved that data warehousing adds value to the business," said William Hickman, vice president and CIO of Anheuser-Busch's Management Systems Group, in St. Louis. "And we feel that this is just the tip of the iceberg."
Web data delivery
Besides focusing their data warehousing efforts on detailed customer and market information, many Information Management Fast-Track 100 companies are aggressively opening up access to data within the enterprise by linking warehouses and data marts with intranets and workgroup applications. That's the case at both BCBSA and Johnson & Johnson Inc., the No. 3 company on the Fast-Track list. Newspaper publisher Times Mirror Co. (No. 6) is following a similar route. Besides signing a two-year strategic data warehousing deal with Oracle Corp., the Los Angeles company is standardizing on Lotus Domino servers and Notes clients across its 12 operating companies. "We want to provide broad access across the enterprise to subscriber information and customer information," said Judy Kallet, senior vice president and CIO at the Los Angeles Times.
As access to data warehouses spreads to a wider audience of users, Information Management Fast-Track 100 innovators are also focusing intensively on improving ease of use. For companies such as Prudential, that means providing consistent, standard warehouse metadata so that end users can easily locate the information they're after and clearly understand its meaning.
As more users come to rely on data warehouse information, many Information Management Fast-Track 100 innovators are beefing up warehouse architectures so that they can be accessed nearly 24 hours per day. That's particularly true of global companies such as UPS, which plans this year to begin adding data from its international operations to the 2 terabytes of warehouse data from its domestic operations. That will require building a highly redundant data warehousing architecture spanning the company's data centers in New Jersey and Atlanta. To support that, the company recently placed a major order for large HP servers and storage devices, said Vice President for Information Services John Nallin. And that's just the beginning. UPS expects data in its warehouse and Information Library to double over the next two to three years.
UPS isn't alone. Despite increasing competition for IT resources posed by Y2K remediation, many Information Management Fast-Track 100 companies continue to increase spending on data warehousing. In fact, the Palo Alto Management Group Inc., a market research company in Palo Alto, Calif., predicts worldwide spending on data warehousing hardware, software, services and in-house development will grow by more than 50 percent per year between now and 2002.
The companies listed in the Information Management Fast-Track 100 are likely to be leading that growth. That's because many, like UPS, have discovered perhaps the most important lesson about data management at the turn of the century: Nothing proves the value of data warehousing to the business like finding new customers--or recovering old ones.