Business and IT Ramifications of Geocoding in Customer Data Integration

By Martin Sohovich

Customer Data Integration (CDI) is one of the hottest topics in the Customer Relationship Management (CRM) market.While closely related to the broader concept of data quality, the goal of CDI is to create a single, accurate and complete view of the customer and to utilize that intelligence through each customer interaction and at every touch point enterprise-wide.According to the Gartner Group, CDI involves "the combination of the technology, software, processes and services needed to achieve" that "view."

In many ways, increased concerns focused on data quality, including CDI, are testimony to the maturing of the CRM market.As this application area has moved from early adoption to mainstream acceptance, maximizing the benefits of these investments increasingly requires focusing on perceived "ancillary" issues such as data quality.The old adage "garbage in, garbage out" takes on new significance when increased competitive pressures reflected in lower sales and ROI returns drive the need to retain as existing profitable customer accounts as well as attract new ones.Accurate customer data provides the "fuel" for these applications and business processes to work.

For those involved in already mature industries, such as database marketing, the quality of customer data has never been an "ancillary" issue -- quality data has always had a direct relationship to customer response rates and process efficiency.Efforts to achieve data quality are moving mainstream in the search for competitive advantage.Similar patterns are evident in other enterprise application markets such as ERP and supply chain logistics.Supporting IT initiatives, such as data warehousing, are also impacted by data quality.

So, in this world of CDI and data quality, what contribution does geocoding make? In characterizing different types of CDI data, geographic, or location data is referred to as descriptive customer data.While forming the most basic layer of CDI, the other types of CDI data, such as details on the customer's past interactions with the organization, are often dependent upon the accuracy of descriptive data to support continuing and accurate customer interaction.We all know the costs of having a bad customer address or phone number.If not, ask your customer service department what this can do to the customer relationship.

The value of geocoding in customer location analysis is widely recognized in almost all industries.It has been widely reported that over 80% of all business information includes location information, be that related to customers, employees, physical facilities and assets, markets served, government bodies, etc.

Wide scale utilization of geocoding, addressing and GIS technologies in CDI will require organizations to develop an enterprise application integration (EAI) strategy and modify legacy and new enterprise applications, such as CRM, to support geocoding and data visualization requirements.Geocoding product vendors will need to extend their products to support the multiple enterprise data standards such as CORBA, HTML, XML, JAVA, J2EE, SQL, ODBC, and others.Complete data interchange is an inevitable requirement to make use of these location technologies to gain a complete customer location view as well as determine the significance of customer location to the business challenge at hand.

We will continue to see the evolution of spatially oriented databases and business intelligence (BI) tools to collect and assess the significance of customer location data.Advanced data visualization techniques to spatially represent larger and larger data sets have hit the commercial marketplace.With the maturing of GIS technology and the ease of embedding such technology in databases and BI tools, GIS applications will be increasingly ubiquitous in business.Data management needs will continue to grow.

So, with all of these customer location analysis applications, where have all the location data coming from? The answer goes back to where we started -- geocoding applications and data sets.

The impetus behind this geographic data need begins with the businesses' desire for uniformity.In other words, businesses with a CDI focus will want to have the same location data for all customers.The BI process will be improved through the enhanced accuracy of geocoded data.Achieving this goal of uniformity will be most likely and most efficiently accomplished through the integration of geocoding applications and data sets.

Another reason to invest in geocoding applications and data sets is that customer geographic data is a perishable asset.We live in a world of constant geographic change --new streets, new cities, and new boundaries.On average, over 15% of US citizens change addresses annually.On average, over 10% of all cities change boundaries on an annual basis.Undoubtedly, you have seen location challenges, in your business, where change dogs your every effort.Few need to justify geocoding applications and data sets to keep up with location change.We are seeing great strides on the part of commercial mapping vendors and governments in pursuing the completeness and accuracy of geocoding data sets.

In summary, geographic data can play a major role in an organization's efforts to gain a complete view of a customer.None of this is possible without better integration of applications, technologies, and data sets throughout all those touch points through which we interact with our customers.Geocoding and related technologies are moving in this direction.Success will be dependent upon success in enterprise application integration efforts.

Martin Sohovich is an executive with Group 1 Software.

Published Tuesday, March 12th, 2002

Written by Martin Sohovich

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