204 Part II • Applying Information Technology
Dan Phillips, Walmart’s Vice President of Information
Systems. Phillips goes on to indicate that Walmart deletes
data after two years and does not track individual customer
purchases. Walmart refreshes the information in its data
warehouse every hour, and thus it has turned its data
warehouse into an operational system for managing daily
store operations. Managers can check the database hourly
and see what is happening at an individual store or stores
throughout a region. As an example of the use of the data
warehouse, Phillips relates an interesting story: On the
morning after Thanksgiving a few years ago, the IT staff at
Walmart’s headquarters checked the data warehouse and
noticed that East Coast sales of a computer/monitor
holiday special were far below expectations. When the
marketing staff contacted several stores, they learned that
the computers and monitors were not being displayed
together, so customers could not see what they were
getting for the posted price. Calls went out to Walmart
stores across the country to rearrange the displays, and by
9:30A.M. CST the data warehouse showed that the pace of
sales was picking up (Babcock, 2006).
Walmart is not standing still with its data warehous-
ing efforts. By mid-2007, its Teradata-based warehouse
had grown to over 1,000 terabytes. Then—in addition to
the Teradata warehouse—Walmart decided to become one
of the earliest customers of Hewlett-Packard’s new
NeoView data warehousing system. The NeoView
warehouse will be used with Walmart’s important Retail
Link system, which permits Walmart’s 20,000 suppliers to
access data about the sales of their products in Walmart
stores. The Retail Link system also permits Walmart to
carry out market basket analysis in order to understand
what products are commonly purchased together (and
then develop appropriate marketing strategies); to conduct
profit analysis on markdowns; and to track percentage of
items in stock (Walmart aims for a 98.5 percent in-stock
rate). Through its data warehouses, Walmart is leveraging
massive amounts of data for competitive advantage
(Weier, 2007).
Online dating company eHarmony uses a Netezza
data warehouse appliance to manage its massive data
warehouse—12 terabytes of data on more than 20 million
registered users. Scoring algorithms are run on eHarmony’s
pool of users to match potential mates, according to Joseph
Essas, Vice President of Technology. Then data are collected
on users’ satisfaction with matches and what results from
the matches, and these data are fed into Netezza for
analysis and possible updating of the scoring algorithms.
Netezza provided the plug-ins needed for the warehouse to
work with Oracle, Microstrategy, and other software
packages used by eHarmony. Implementation of Netezza
was easy, according to Essas: “Within 24 hours we were up
and running. I’m not exaggerating, it was that easy.” Essas
has found that the Netezza warehouse is “more or less
working as advertised. It runs complicated queries; it’s
fantastic in terms of table scanning and those sorts of
things” (Kanaracus, 2009). Data warehousing has the
potential to let companies understand and utilize the data
that they are already collecting as they run their businesses.CUSTOMER RELATIONSHIP
MANAGEMENT SYSTEMS
A type of application that often pulls much of its data from
the organization’s data warehouse is customer relationship
management (CRM). A CRM system attempts to provide
an integrated approach to all aspects of interaction a company
has with its customers, including marketing, sales, and
support. The goal of a CRM system is to use technology to
forge a strong relationship between a business and its
customers. To look at CRM in another way, the business is
seeking to better manage its own enterprise around customer
behaviors.
A variety of software packages have been created to
manage customer relationships, most based on capturing,
updating, and utilizing extensive profiles of individual
customers. These profiles are often stored in a data
warehouse, and data mining (discussed in Chapter 6) is
used to extract relevant information about the firm’s
customers. Furthermore, customer profiles are made
available online to all those in the company who might
interact with a customer. In addition, Web-based front-
ends have been created so that a customer can interact with
the company online to obtain information about products
and services offered by the company, to place an order, to
check on the status of an existing order, to seek answers
from a knowledge base, or to request service. CRM
software packages enable organizations to market to, sell
to, and service customers across multiple channels,
including the Web, call centers, field representatives,
business partners, and retail and dealer networks.
There are many players in the CRM marketplace,
so let’s attempt to differentiate them in various ways. For
the first cut, we will look at the leading firms that market
to larger firms versus those that market to small and
medium businesses. ISM, Inc., a strategic advisor to
organizations planning and implementing CRM initia-
tives, names the top 15 CRM enterprise (larger firms)
winners and the top 15 CRM small and medium business
(SMB) winners each year—in other words, the top 15
vendors to larger firms and the top 15 vendors to small
and medium businesses. Both rankings are based on
ISM’s surveys and testing, and both lists are presented
alphabetically (Lager, 2009).