On the first morning of the Teradata Universe 2006 conference, I facilitated a panel on the subject of ‘Information Everywhere’. Here is a transcription of the panel.

15 March, 2006 - Sydney
TERADATA UNIVERSE MEDIA PANEL TRANSCRIPTION

Present:

Panel Members

Professor Craig Mudge (CM): Professor of Innovation at Macquarie University and Director of the Macquarie Institute for Innovation

Graeme Wood (GW) Co-founder of wotif.com

Stephen Brobst (SB) Chief Technology Officer, Teradata

Gerd Schenkel (GS) General Manager, Customer Strategy and Cross
Marketing, nab

Facilitator

Cameron Reilly (CR) Blogger and co-founder of The Podcast Network

CR Welcome to the panel on ‘Information Everywhere’. My name is Cameron Reilly and I shall be your facilitator. Speech, character and facial recognition, self-service technology, reading technology, music synthesis, virtual reality, artificial intelligence – concepts that were previously thought to be in the realm of Star Trek are making their way into everyday lives. Some futurists are predicting that within five years computers may become invisible and built into our skin and clothes and within 20 years human intelligence and computer intelligence will fuse and become indistinguishable. This is the future of IT, but for IT to be useful and profitable for business, we have to work out a way of transforming this data, this information into insight knowledge. Francis Bacon, Isaac Newton and Winston Churchill all agreed - knowledge is power. I don’t think George Bush agreed, but that’s another story. What are the consequences of this increase in formation availability for business and economies? How are organisations going to harness the information captured from a multitude of sources and develop meaningful knowledge? What can we learn from the consumer, and if knowledge underpins the new world economy, where does Australia fit in the overall scheme of things? To answer these questions and more I will introduce you to my panellists. Sitting immediately to my left Professor Craig Mudge, Craig is the Professor of Innovation at Macquarie University and Director of the Macquarie Institute for Innovation. Sitting directly beside him is Graeme Wood, Graeme is co-founder of wotif.com and just gave an excellent presentation in the ball room and I hope you didn’t miss that. Graeme created the concept for and co-founded wotif.com in 2000 which revolutionised the travel industry and has now grown into a global company with a team of 120 employees worldwide. Sitting next to him is Stephen Brobst, Stephen is the chief technology officer for Teradata and finally on the end Gerd Schenkel, Gerd is the general manager customer strategy and cross marketing for the National Australia Bank. His role encompasses development and implementation, market research, CRM in national leads as well as cross marketing for the Australian region. Thank you for joining me today gentleman. We have some questions that I am going to ask the panel members for the next 15 or 20 minutes and then we’ll go to you to submit questions. First this is a question for Stephen - how is data evolving to be everywhere all the time? We hear this all the time, people talking about we’re moving into information everywhere, we’ve obviously seen this most notably in the last ten years, there is a proliferation of information sources, a proliferation of devices, we’re now connected to the internet 24 hours a day, seven days a week it seems. What types of technologies are going to help us manage this huge amount of data that’s showing itself in our personal and business lives?

SB I think there’s many different aspects of that, there’s how do we acquire that data and acquire it effectively into a repository where we can use it, how do we provide access to it and how do we transform that data into information. So when you look at the sources of data, clearly sensor technology is proliferating. RFID technology, we will see this technology proliferating into every vehicle. You are seeing 3G, third generation telecommunications, so you can do location based services, you know where everybody is at all times. You have the ability to track packages as you ship a package from Sydney to New York City you can track each step that it takes along the way, RFID tag plays a big role in that certainly but there’s … you know IP technology is another big player right so before detail data and telecommunications it was a core detail record, today it’s the individual package flowing over the network that you’re tracking so, so what we used to think of as the atomic data, it’s going subatomic and I think we’re very good at creating lots of data, but information is different, right. It means we’ve integrated, we’ve cleansed it and so on so there’s massive amounts of processing power necessary to create that information from data. So massively parallel processing technology and the ability to leverage standard high volume server technology in mass cost effectively, because it’s a lot about economics it plays a significant role there as well. And then the users of the information, certainly the internet plays a huge role, now instead of organisations keeping the data to themselves inside their own four walls it’s being exposed to the virtual organisation which includes customers, suppliers, partners, you know throughout the virtual organisation.

CR Is that proving a challenge to many organisations providing this transparency of data, obviously organisational cultures traditionally were very protective of their information and their data, are you seeing that providing some sort of friction for organisational culture?

SB There is friction in a number of different forms. First of all when you expose your data more widely data quality problems also get exposed and managing data quality is a huge issue with information, because if you’re making decisions and decisions that are important to your customers, decisions that are important to your partners, based on the information it better be correct. But in fact what happens is data doesn’t get cleaned unless you expose it. So it’s when consumers can actually have visibility to the data, when partners can have visibility to the data, when the sales force can see the data that’s used to drive their commission you better believe it’s going to get cleaned up quickly. So it actually has a very positive impact, but sometimes culturally organisations have a tendency to want to kind of sweep things under the rub, but I actually think that this kind of exposure is a good thing in the long term.

CR Does it need to be a top down driven process inside of an organisation?

SB It needs to be top down and bottom up quite frankly, if you don’t get the bottom up part right it’s not going to happen. On the other hand you’ve got to have the organisational sort of backing that this is something important, that the quality doesn’t come for free and so there needs to be a … the recognition that there is value in having data quality not just data.

CR Thank you Stephen. Professor Craig Mudge, what sort of business application do you foresee these kind of technologies are going to force us to develop over the next ten years?

CM Well let me just pick up on the RFID, the tag that Stephen mentioned, I think we’re all pretty much familiar with that now. I see the area of smart tags where it’s not just a passive tag like RFID, but a tag that has a battery in it that can therefore sense more, can radio back and so we can … a simple example would be actually in the military I’m afraid this is an easy one, where one would sprinkle on the battle field a lot of coin sized devices and they could sense what was mover over it, whether it’s a tank or a person or whatever and in the US DAPA funded a lot of the early work in that in the first project at Berkeley where Stephen did his undergraduate degree, it’s called ‘smart dust’ and I really think we’re moving to that point where the radios, the wirelesses can get down to being very, very small, the batteries and so really today we’re seeing not thousands of pieces of dust being sprinkled around, but at least hundreds today. There is an example right on the Mexican border, between the US and Mexico at the moment, which is a wireless sensor net deployed and it’s detecting all sorts of … you know you can guess what that’s for. But if we move beyond that I think oil and gas and major applications in running oil refineries you can put in costs about a thousand dollars to put a measuring device in if it’s wired, it’s only a hundred dollars if it’s connected wirelessly. In pharmaceuticals we are seeing now the provenance of drugs as are being … need to be, when one imports a drug one needs to know that it actually came from the country of origin, the plant of origin. Local government, you are seeing lots of examples there in asset tracking. Environmental, we will be able to detect bushfires right at the … much more quickly. And then there’s the whole supply chain. And a bigger jump is actually to being able to design better products as we track the behaviour of a product as it’s deployed - how easy is it to use? Under what circumstances does it break down? Well that feedback will improve reliability. Which features are not used that will feedback into lower product cost? So that’s a bigger jump on tracking every product as it’s used.

CR The price points for RFID in the last few years have been a matter of dispute, are they continuing to decrease and become more viable for businesses?

CM They’re certainly coming down. Even in the active tags now we can talk about in volume about ten dollars. If you’re tracking a set of razor blades that cost $15.00 then you don’t want to put a ten dollar tag on it right and so the RFID tags are down sub one dollar there, and the active tags are now down to about ten dollars.

CR Thank you. Gerd with all of these application that are going to be coming out over the next five to ten years that Stephen and Craig have been discussing, which do you see as being the first that are likely to be adopted by commercial businesses like the National Australia Bank?

GS I think as a commercial enterprise the challenge for us to decide when to take new technologies into the commercial realm and once we put it in that realm and make investments we obviously then have to produce a return on that investment and the guiding principal for us here is what technology is most likely to be adopted by customers, or what technology if it is invisible to customers is most likely to help us produce a better outcome for the customer? So in the past most of those technologies led to additional banking channels and therefore produced more convenient ways of doing your banking, you have telephone banking, internet banking etc, those things are you know common place now compared to the things we’ve just talked about. In terms of tracking product behaviour and you know usage of features and so on, you know in banking I think we’re fortunate that it’s essentially a virtual product if you will and we are able to identify what doesn’t work quite well. So a key investment for us has been and is the customer relationship management suite of technologies which are designed exactly for that purpose.

CR Have you been able to track with the investments you’ve made to date in those sorts of technologies whether or not it’s producing happier, more loyal customers?

GS Look it’s hard because the standard of the industry is rising and the expectation of customers are rising so now people expect internet banking, telephone banking, SMS etc, while ten years ago this might have been an advantage now it’s sustaining businesses. So to separate the effect of one particular technology from say an overall customer satisfaction is basically impossible, but we do now where we don’t fulfil the expectations – so if people want internet banking and we’re not offering it or it’s not working it is going to produce very unhappy customers. So we can’t isolate you know each technology’s effect, but we can measure the totality of our service of course and that’s the key driver of these investments.

CR So what are some of the more innovative applications of these technologies that you can foresee say in the banking industry over the next few years?

CR Apart from just you know keeping the status quo of customer satisfaction - what’s going to really innovate and take banking forwards?

GS Well I mean one example is you know SMS has obviously found, in particular in Australia, very broad adoption and we’re using SMS, the SMS functionality for increased security for instance of the internet banking. We felt that was an area where there was demand from a customer’s perspective. So that was the application, so we’re not using SMS you know to sell more but we’re using it at this point to increase the internet banking security because we felt customers wanted that.

CR Can you give me an example of how the SMS works?

GS Well what happens is if … I don’t know exactly, but the way I understand it is when you log in to your internet banking rather than just supplying your username and password you do have to get a customised code sent to your phone for every log in. So it is much more secure than the usual way and that service is free for customers. So we made an investment here because we felt it was important for customers and obviously we hope that customers feel better banking with us over the internet as a result and then going further out, this is now going further out there might be additional channels coming up and … but a lot of the innovation might be in in how we use our technology to support our people. We talked before about machine intelligence versus human intelligence and human interaction, we are a firm believer that banking is a face to face business and we use technology more and more to support our face to face sales people, service people, in the branches, wherever they see it. So I believe a big area of innovation will be in technologies that help our people deal with our customers face to face or on the phone and it is still very much a face to face business.

CR Okay thank you. Graeme e-commerce changed the way consumers accessed information and shopped, probably not as greatly in some areas as we expected to see it as quickly five or six years ago, but it definitely has changed our expectations in many areas, travel and tourism obviously being one of them – what sort of benefits do you think new applications are going to bring to consumers and what kind of opportunities are they going to open up for businesses in the next five to ten years?

GW From a consumer point of view having more information will generally reduce risk, risk in terms of going to an unknown destination, I will have more information available about that destination, I may never have been to Beijing before. But ideally we can draw together many different streams of information to present a complete picture for the traveller - what to expect. Are they really getting a good deal compared to prices paid by other people? Do they trust the reviews of the hotel that they’ve decided to stay in? Are they getting information that is personalised to their own agenda? So if I’m a 25 year old single person going to Beijing I have vastly different interests to a married couple or a family. So the potential I see and there’s a lot of bits of data being collected out there, the potential for the consumer first of all is to be able to analyse this, but again it comes down to how efficiently can I analyse it – have I got to go to fifteen websites and do I trust all of them? So that’s for going to an unknown destination. Going to a known destination I want the security of knowing that I’m not getting ripped off, I’m getting a good deal depending how cost conscious I am. When I book this hotel here I want to be able to book the particular room online, why should I stand at the reception and be handed a key to a room that I just don’t want to have? So risk reduction and more personalised information I think are two potentials. For the supply side a lot of this technology will drive down distribution costs. So if I am a dive operator on the Whitsunday Coast up there if I am aware of groups of backpackers coming through, that I could be because they’ve stayed the port next above and I’m sharing that information with that backpackers hostel, they know what sort of activities they’ve been engaged in while they’re there, so it’s almost covert surveillance I suppose but there’s data being gathered about people’s behaviour that could be of advantage to the next port of call as they go down the coast. So they’re a couple of areas.

CR One of my former bosses, Bill Gates, has said for ten years that the internet will change everything. Do you think we’ve really begun to see the impact in many mainstream business of the internet and this increasing rate of change of technology? Obviously you had a big impact in the, you know the travel industry.

GW Yeah.

CR Are there lots of industries out there that are yet to experience the full brunt of these technologies in their business model?

GW Well there’s two things there’s from a negative point of view yes there is a brunt waiting to hit them if they don’t adopt it. It seems to be very difficult for a bricks and mortar kind of business and especially in the travel game, to comprehend and be able to engage with the internet in a business sense. The people are still thinking about sitting down and talking to a customer on the other side of the desk. So it just … I haven’t seen any successful examples of bricks and mortar style travel businesses moving to the internet. If you look at low cost carriers they are completely different, they are set up on the basis of we will get 80+% of our bookings across the internet – so they didn’t invest in all of the less productive ways of distributing tickets. If you move outside the travel industry I think the same thing applies you know the Ford motor company, I’m not sure why I’m picking on them, how effectively are they marketing themselves or giving consumers better choices or more information over the internet so they will feel that they are more engaged with Ford as a company than with GMH? I don’t see much evidence of that happening.

CR You’ve obviously brought a high degree of price transparency and service level transparency to the accommodation industry, do you think that that is going to cause a lot of friction from businesses who are used to their consumers not really knowing that the last then people who stayed at my hotel weren’t very happy obviously now you’ve provided a high degree of transparency to those, are industries ready for that?

GW No they’re not and they’re suffering because of it, but there you go.

CR Okay tough, deal with it. Stephen the sort of exponential information growth, people like Ray Kurzweil have been accurately predicting this for fifteen / twenty years and are predicting the continuation of that for at least the next fifteen or twenty years. This kind of exponential growth, how does it effect management of organisations? Graeme made an interesting point in his talk saying that the pace of technology may be outstripping our ability to recognise and manage the opportunities. What are your recommendations for management of corporations to deal with this exponential growth in the next decade?

SB I think one of the key points is that if a human has to be involved in every decision making process, trawling through the data and finding the relevant points you drown, you can’t survive that. So increasingly decision making agents will be software decision making agents with humans getting involved where there is you know fuzzy knowledge required in order to you know tie breaking kinds of things, but more and more using software event detectives and rule based systems and so on to make decisions where you’ve got enough information to make decisions with no humans involved and when there’s not enough decisions the human only gets flagged those decisions where human intervention adds value. So what you’re doing is you’re amplifying through the use of analytics the human value add and in some cases dis-intermediating the human all together where the human doesn’t add value. That’s the only way you can scale up given the amount of information explosion that’s taking place.

CR Just one last question for Stephen…Stephen do you believe it will be a Teradata database that will wake up and achieve sentience and what date do you have scheduled for that?

SB We haven’t scheduled that date and I’m hoping that won’t be the case.

CR Alright well thank you gentleman, in summary we’ve heard about the forthcoming proliferation of Smart Dust, tiny little RFID sensors that are going to find their ways into every nook and every cranny of our lives and we’ll be in turn producing huge amounts of information and data that businesses will be using to … they will be using it benignly we hope to provide us with better services. We’re all going to have to face this issue of privacy. Obviously we’re going to try and continue to protect our privacy, but some of us will be willing to share more and more information to trusted services providers in return for the benefits of greater personalised service. We are also finding the consumers developing higher and higher expectations as we move further and further into this world of information everywhere, pricing transparency, service transparency and that is going to continue to cause certain cultural frictions with inside large corporations and inside of our legislators’ minds and hearts as they try and deal with all of this. I’d like to thank our panellists Professor Craig Mudge, Graeme Wood, Stephen Brobst and Gerd Schenkel for answering the questions so frankly and I think we’ve got fifteen minutes now for some private one on one questioning and interrogation, thank you very much.

That's the end of the show folks! I'd like to congratulate Teradata and their speakers on a good show, and especially congratulate Graeme Bowman the MC who did a terrific job keeping the audience amused with his comedic anecdotes between speakers.

Keynote Speaker - The Hon. Bob Carr

The former Premier's talk is entitled "The Importance of Information in Decision Making".

Bob's quoting from Maggie Thatcher and Disraeli to drive home the case that you need the best information to win the battle.

He's talking now about the American Battle of Gettysburg and the Battle of the Eastern Front in WW2. In both of these battles, a lack of information, of intelligence, lead to disasters of huge proportions.

I love speakers who use historical examples to drive home their points. Analogies help us learn.

Gettysburg. During the American War of Independence, General James (Jeb) Stuart was General Robert E. Lee's "eyes and ears" and provided him with constant information about what was happening on the front. But just before the Battle of Gettysburg,

Stuart went missing. Stuart's communication line back to Lee was cut by the enemy. (This is obviously a subject Carr knows well. His delivery is excellent and impassioned.)

When Lee approached Gettysburg, he had no idea where the Federal army was (at this point Carr is showing a segment from the 1993 film "Gettysburg" starring Martin Sheen as Lee). The South was beaten at this battle and Lincoln's Federal army won the war.

Lesson's from Lee's defeat:

• An information source you doubt will weaknen your decision making, one you can trust will hasten the decision making process.
• A complete information picture is critical to making early decisions.

Lessons for Business:

• Acquiring information on competitors
• Building a profile of the strategic environment

In the lead up to the invasion of Russia, Hitler said his attack on Russia would "flatten them like a hailstorm". Hitler also said "we know absolutely nothing about Russia". (Showing german newsreel footage from 1941). Hitler's belief in the superiority of the German people had permated the whole German system. The Russians started off with a tank which beat the German tanks hands-down. It was only in the battlefield that the Germans found out what they were up against. The German shells would ricochet off of the Russian tanks. The Russian tanks were lower, faster and had extra thick armour plating and extra wide treads which allowed it to travel across the harsh Russian environment. They were the best tanks in the world. Hitler confessed "had I known about these tanks I would have thought twice about invading". By 1943, the Russians were producing 1000 tanks a month.

Lesson from WW2:

• beware of pre-judging your competitors
• look at the facts
• incorrect assumptions will prevent all the neceassary intelligence being collected
• avoid arrogance about your own strength
• poor information leads to the wrong decision

9/11

The NSA has 58,000 employees and a budget of 6 billion. Their computers scan emails, phone conversations, websites, for keywords. They analyze 2 million individual communications every hour. How do you separate the valuable intelligence from the useless information?

On September the 9th 2001, a message appeared on an Abu Dhabi website saying a "big surprise" was coming soon from the Asir region of Saudi Arabia. 12 of the 15th hijackers came from this region. Several of the different US intelligence agencies had information that related to the hijackers prior to 9/11, but the information wasn't shared between the agencies in a way that allowed them to bring it all together. There were 12 memos sent to the FAA warning them of possible terrorist attacks. The data all sat in various silos, just waiting to be pulled together. The 9/11 commission concluded that the attacks fell into a void between agencies looking for foreign attacks and agencies looking for domestic threats. No-one was looking for foreign attacks on domestic targets.

Encarta.

He's using the way Microsoft took out Brittanica when they introduced Encarta. The 1990's witnessed a 50% fall in sales of Brittanica's product. Brittanica, it turns out, had no data on their customers or their competitors. They assumed their customers bought their books because of their reputation of excellence when parents actually bought encyclopedias because they wanted to "do the right thing" by their children. When Microsoft entered the market with a $79 product, they stole the market away from Brittanica in a few years.

During political campaigns, parties are polling every single night to understand what people are thinking.

Then Bob summed it up by relating the lessons back to business, really unnecessary, as they analogies were clear enough.

Q&A time.

- don't accept artificial deadlines for decision making.

- good question about WMD! Carr says there is no doubt that the CIA was under huge pressure after 9/11 to create justification to go into Iraq. It was another case of prejudice over intelligence. Cheney and Rumsfeld wanted to go into Iraq and no amount of intelligence was going to stop them.

Becky Wanta is the Global CTO of PepsiCo. Her talk this afternoon is on "The Role of Enterprise Architecture and the EDW in Business Transformation". PepsiCo's technology strategy is designed to lower the TCO, deliver effective CRM and enable fast acquisitions.

The design principles were:

• Buy mature solutions with ready references of similar scale versus “Build”
• Minimise customisation of commercial off the shelf applications
• Leverage Best of breed products for their respective known strengths
• Establish process centric design, measurement, and metrics
• Identify single system of record, business owner, and update process for all components within the technology application and data environments
• Leverage existing investments & resources where possible (technology and people)

It has been built around SOA and uses an EAI layer. She says each connector for an EAI layer costs an average of $20 - $160K cradle to grave, so you want to make them once. For PepsiCo, SAP is not the centre of the universe. It is just one more application. Their data strategy has one key component - it isn't about the technology - it's about the business. So you need business ownership on the data strategy. This is a business play, not a technology play.

Enterprise drivers for their strategy included getting a single version of the truth and delivering ubiquitous end user access via a common technology stack for a consistent, common interface. Becky stressed that PepsiCo uses Teradata as their Data Warehouse instead of SAP BW because Teradata extends the reach of SAP BW and SAP's analytical capabilities. In her opinion, Teradata is the only answer for true enterprise data warehousing. PepsiCo's key learnings are that executive support is paramount; business understanding and participation is critical; you should avoid business people directing technology decisions; make sure your partners are aligned with your strategy; and understand that Information Management is a journey – not a destination!

Dr Charles Lawoko, Director, Insight2Action Group, Independent CRM Consultant

Why "timely, actionable intelligence" are critical action words for any successful capability for leveraging customer information

Charles is ex-NAB and originally from Uganda. Very funny guy. Has the audience laughing which is a good strategy after lunch on day two!

How quickly and how well can you generate opportunities from deep insights about your customers? And once you've identified the opportunities, how well can you execute on them across channels? He made a good example. If you are an airline and you have a customer travelling with you to LAX with a connecting flight to get to in 20 minutes. You flight into LAX is running late. You know what his connection is. Why not have a car waiting for him so he doesn't have to walk from Tom Bradley International to the other side of the airport? I can relate to THAT example. If you provided that level of service, would your customer ever considering leaving you for another airline?

Quotes from senior execs of some large Australian companies.

Greg Booker, GM architecture and planning, St George Bank. CRM objectives are to have a simple screen which will display key customer data, cross-channel view of customer interactions, events/needs based marketing, improved customer service through real-time interaction and integrated leads management and referral system.

Mike Pratt, Group Executive, Business & Consumer Bank, Westpac says targeting the right customers, increase customer satisfaction and improving sales discipline and leadership are their key CRM priorities.

Carl Harman, Private Bank Head, NAB, says "you have to be proactive with premium customers to avoid the prospect of losing them when they have a 'liquidity event' and arrive unannounced at a branch looking for money..."

Sol Trujillo, CEO, Telstra, said "it's associated with knowing your customers better than anybody else and executing on what you know better than anybody else. It's that simple.".

Customers want relevance, timeliness, and addressable media. And Charles says he disagrees with Sol - it isn't simple. You have to choose between lots of options, technology options, success metrics, organisation structure, campaign management, cultural change, etc.

Is it worth the effort? Charles says you don't have other options for becoming competitive. If you are serious about optimizing spend on marketing and sales generation, you need to transform your marketing capability, sales and services disciplines and create competitive advantage by building innovation and experimentation based on actionable customer intelligence and insight.

DnB Nor is a Norwegian bank and Kari Opdal is the Head of CPM. They are the largest financial player in Norway resulting from a merger in 2003. They have 2 million retail customers from a population of only 4.5 million people. 1.1 million of those are internet customers, 750k are active, meaning they use the internet banking on a weekly basis. Their ambition is to give all
of their customers a "brilliant experience" every time they are in the touch with the bank. Kari said she is 40 and has only had one "brilliant experience" as a customer in her entire life which was when she stayed at a particular London hotel a few years ago. She wants DnB NOR's customers to feel that way. 50% of their customers visit a branch 2 to 3 times a year. This makes it harder for the bank to know who their customers are. However their customers are interacting with the branch more than ever before. Today's customers expect for the bank to be available where and when they need it. They want to be recognized when they contact the bank. Building relationships is hard but crucial. Kari says that traditional communication with the customers is not good enough.

They have "cradle to grave" loyalty programmes which consist of product packaging and dialogue concepts. They use dialogue marketing to collect soft data from the customer to use in profiling. They also use event based marketing to detect events that are significant for each individual customer. Their DW has between 500 - 1000 direct users and about 5000 indirect users. Benefits include a 50% reduction in marketing budget by being more efficient in how they contact their customers and very positive feedback from their sales force. Being a reltionship organisation involves the whole organisation. They had to go back and re-build the whole management system around this idea and the CEO has said they will continue to re-engineer the company around the customer. He has told his team that if they don't get it right, he will find people who can. Final points: Privacy is a driving force in relationship building and relationships are an open-ended process.

Ron Swift, Vice-President Cross Industry Solutions, Teradata, is talking about how to turn data into value. In Teradata surveys, customers respond that Enterprise Business Intelligence is primarily important to risk manage profit, revenue impact and long-term growth. Ron's biography describes him as a "luminary". I need to get one of those titles. He has lots of examples in his presentation of what kind of knowledge different industries are interested in having available to them in real-time. Speed is important and can increase the value of a DW investment by 500 percent. Ron has a lot of strategies for getting the most out of your DW/BI implementation. Such as automating decisions by linking insights to events and actions. He recommends a book called "Advances in Strategy" from Harvard Business Review. Ron's quoting a study (this could be from Ray Kurzweil, he didn't say) that says we will produce more data in the next five years than the entire human race has produced in it's entire history. I love that kind of stuff. So what do we do with that data? How do we turn it into value?

According to Ron, we need to share DW objects across different business processes. Services-Oriented Architecture is a common theme across the conference. DataMart consolidation also as a ~500% ROI. Ron has some great material about using events and analytics to manage differentiated treatments of individuals to make them feel like you understand their personal situation. He has lots of case studies of successes in up-selling, cross-selling, etc., using this analytics approach. Amazing case study of Harrah's, a casino, including video of how they are able to track who is playing on the floor at any given moment and how much they are spending, what their expected loss-rate is, etc. They use a "Total Rewards Card" to track who the person is and their spending pattern, as well as predict how much they can afford to lose in any given visit to the casino. Scary stuff. These kinds of applications are out there and you can use visualisations to use extensive and pervasive
analytics, from companies such as Hyperion and Business objects, to improve the effectiveness of your BI solution.

Day Two of the TeradataUniverse conference started with a $28 bowl of Nutri-Grain at the Sheraton breakfast room. MMMM!

First speaker of the day is Randy Black, Director of Technical Architecture, from the Airlines Reporting Corporation (ARC). His talk is "Encryption of Sensitive Data in Teradata using Protegrity’s SecurePro, a Customer Experience". ARC is an airline-owned company offering travel products and services, ticket distribution and settlement in the US. ARC uses Teradata
and warehouse data mining techniques to identify and reduce fraud. They offer industry specific business intelligence reports to carriers, travel agents and other interested third parties. ARC also use an application called Protegrity for provide encryption of their data and to specify policies for who can access which kinds of information. Randy is covering their implementation experience, including things such as encryption performance, migration timings, table growth and load testing. Sounds like they have had a very positive experience with the SecurePro product.


There are also some workshops and panels on this morning. I caught some of one by Lance Miller, a Solutions Marketing Specialist with Teradata. In Lance's session, he's covering a DW Maturity Assessment. There is a well-developed maturity engagement process which is a 3 - 8 week consulting engagement.

Dr David Schrader from Teradata is also running a workshop called "Exploring the Possibilities for writing applications for Teradata". This workshop covers how application development is evolving because of Service Oriented Architecture and Web Services. He's talking about something called "TAP capabilities", and the use of TAC (Teradata Analytic Calculator), a new
Teradata rules engine. There are a number of interesting applications, including one for the airline industry to measure profitability, a risk application, a retail industry Item deletion application, and an application for manufacturing supply chain optimization.

Also this morning, Imad Birouty, John Dewey and John Street from Teradata are doing a workshop on running a Dual Active environment. They have an impressive case study from a large European bank. Much of the presentation is about strategies for moving from a single system environment to a dual systems environment and technical examples of how to implement a Dual Active environment.

Monica Tyson has been leading data warehouse implementations for over a decade. Formerly with Harrah’s Entertainment and Office Deport in the United States, Monica is now active as a data warehouse consultant with Compas Pty Ltd in Australia.

Business Intelligence governance involves specifying the decision rights and accountability framework for an enterprise Business Intelligence environment. Governance determines who makes the decisions. Management is the process of making and implementing the decisions.

You require an Executive Steering Committee that should be led by the Senior Executive of the company. The ESC should not be lead by the CIO. Others may participate in meetings as "non-voting" members.

Monica's Keys to Success for governance include:

• Formalise project change control to control scope
• Base Activities form a method for providing small enhancements
• Establish team communications
• Define what is a quorum?
• Utilise portal technology to store key communications, presentations, meeting minutes, decisions, etc.
• Success requires active and equal participation and ownership from IT and business.
• Relationships need to be formed at all levels in the organisation
• Business members on the ESC and PLT should market the Data Warehouse to their organisations
• Focus on business outcomes versus implementing technology
• Set a vision and revise it over time – keep it fresh
• Take time to celebrate success

Vikas Gopal & Eileen Ouellette, Nationwide Insurance

Financial Management Transformation: Success Factors for Delivery of a Scalable Technical Solution

Mr Gopal is currently the Associate Vice President and co-lead for the Finance transformation program (Finance Focus) within Nationwide Insurance. Eileen Ouellette is Director of Data Services for Finance Focus. Nationwide is a $21 billion insurance company with 30,000 employees. Their finance transformation program was designed to drive the right behavior and accountability in side the organization and provide robust data governance. The size of the capabilities gap required a total transformation of Finance and the transformation required a comprehensive change with new and innovative approaches to information, processes, people and technology. The Focus program was huge and required tremendous discipline to build up. The team involved 280 members who put in 600,000 person hours (1.2 Million with overtime) over 24 months. The Data Volume now exceeds 150 million transactions per month.
The architecture invovled Teradata, Sun, EMC, Informatica, Oracle and Kalido on the backend, with Oracle Peoplesoft and IBM Websphere on the front end.

Lessons Learned:

• Factory Test provided more value than just proving integration of toolset
• Define dimensionality and granularity early on to drive deliverables
• Align Organisation with program release to ensure resource allocation
• Performance Test as early in the process as possible – build baseline and schedule improvements within release schedule

Lynn Olsen, Vice President Retail Business Process & Rick Collison, General Manager, Enterprise Data Warehousing , SuperValu Inc., a Fortune 500 company and the 8th largest retailer in the U.S. SuperValu has over 57,000 employees and over 1,200 company stores across 38 states. About to do a major acquisition which will make them the #2 retailer in the US with over 200,000 employees. Wow. Serious stuff.

When they started their DW strategy in 1998, they had separate companies with strong local management, disparate transactional systems, no common data, many differing definitions, and no common toolsets.

Out of this came the "Enterprise Advantage Program Strategy" - an enterprise-wide effort to deliver common and integrated business processes, with flexible supporting information technology, that enable SuperValu with lower cost world-class capabilities for service,
growth and competitive advantage.

The results:

• Found missing vendor funds
  
• Gained Understanding of fees, funds, pricing issues which improved margins
• Usability and Data Trust
• Able to effectively use information
  

Ian Parker heads up the product and solutions marketing capability for Business Objects across Asia Pacific.

Many major global brands such as Tesco, Air France and St George Bank rely on Business Objects as a safe and proven choice to deploy Business Intelligence (BI) over Teradata.

The quote from St George Bank was that "Business Objects remove the technical hurdles to getting access to important date from their Teradata systems."

Another case study: Cingular Wireless. They used the business intelligence platform to get a single customer view and now run 1000 reports every day with roughtly 100 power users.

Another case study: Air France. Wanted one BI tool and a standard view across their organization. Wanted to integrate the ETL layer to get a much stronger handle on their business. Now handle 20 - 30 projects each year to deliver value back into the business.

Key takeaways:

• The relatioship between BI and the DW is a key to success. Many projects that fail focus on one and ignore the other.
• Business Objects is optimized for Teradata.
• Retails Decisions and other show the way to an integrated solution.

Stephen Brobst is the CTO of Teradata. His presentation was called "Data Quality Management using TQM Processes".

Stephen explained that the traditional components of a data warehouse service level agreement used to be simple:
1. Performance
2. Availability
3. Data Freshness

Today they have expanded:

• Data quality is the fourth component of an SLA for a successful data warehouse implementation.
• Must be established (negotiated) with the end user community as part of the business requirements for a data warehouse.
• Cost-benefit assessment must be used to drive rational decisions regarding service level requirements for data quality.
• Measurement of data quality is required to manage against SLA.

He said all organisations fall somewhere inside of a "Quality Management Maturity Grid" which starts moves from "Stage 1: Uncertainty" to "Stage 5: Certainty". His recommended approach for establishing an SLA for data quality is to apply techniques for managing quality in a manufacturing environment to data in the warehouse. This approach is something called the "House of Quality" methogolody. The value of data quality to the business must outweigh the cost of achieving data quality for each initiative undertaken.

Some of the common traps in Data Quality Management include:

• being treated as a one time undertaking
• reliance on manual processes
• assuming the legacy system/report is always correct
• and taking downstream sources that lack atomic data.

Automation is Critical for TQM. All data quality measurement and exception reporting must be automated. No manual procedures should be allowed for constructing reports. Measurements should be scheduled as part of production job stream. Thresholds should be established for operator alerts based on data quality.

Allen Messerli is the President of Messerli Enterprise Systems, a data warehouse consulting firm. Allen spent more than thirty years at 3M, where he implemented many solutions in supply chain, manufacturing, sales and marketing functions. Allen initiated and implemented 3M’s Global Enterprise Data Warehouse ten years ago, providing integrated business intelligence, financial transparency, customer relationship management, supply chain management, and e-business for 40 business units, channel partners, and customers globally. At the time, they had no integrated visibility of their supply chain.

The business transformation drivers included growth and margin improvements and cost reduction. It was a top-down driven strategy where the CEO's publicly stated goals where connected to the success of the DW project. They created a group the "Enterprise Information Management" group that was goaled to integrate supply chain information from across the company.

The 3M GEDW has been acclaimed by BusinessWeek, Harvard Business Review, CIO, and The Data Warehouse Institute. It is the most comprehensive and integrated EDW in manufacturing.

A good example of the thorough job 3M did on their GEDW, they had to spend no money on Sarbanes-Oxley when it came into effect because they already had a complete top-to-bottom transparency on their group financials.

The GEDW currently integrates data from 800 diverse systems and provide 3M with a complete view of customers, markets, and suppliers.

Allan's presentation was very in depth, 49 slides covered in an hour.

Gerd Schenkel, General Manager, Customer Strategy and Cross Marketing, National Australia Bank. Gerd joined the nab in 2005 from Citigroup where he was the Director of Strategy & Business Development for Australia. His presentation provided a high level insight into NAB’s CRM capability and its development. NAB have 15 years of CRM experience and are currently running “several hundred” campaigns p.a., delivering ~2-3 million Leads p.a.. By using these
campaigns, the bank is trying to improve share of wallet (wow I haven't heard THAT term since 2000), reduce customer "churn" and improve profit growth from cross-selling opportunities. They use Siebel on the front-end which was customized significantly for the bank. Gerd says that customer satisfaction has improved across both retail and business banking in the last 12 months, as a result of CRM in conjunction with the bank's overall strategy.

Peter Hanlon is a Programme Manager at Tesco. His presentation was called "Going Global". Tesco has been working with Teradata since 1998. In 2002 Tesco launched a new strategy to support the growth in the International business called ‘Tesco in a Box’ or TinaB. TinaB is a strategy to have a portfolio of core systems and processes that could be deployed quickly to
new take-on countries. It is built around industry leading packages: Oracle Financials, Retek (now Oracle), Peoplesoft (now Oracle), and Retalix. Did you count the Oracle mentions in there?? There was a change in direction for Tesco which had typically developed its own applications or had packages highly customised to fit Tesco processes. Now they buy rather than build; change business processes to match the system; use vanilla packages to remain on the upgrade path; and develop strategic partnerships with vendors to get Tesco functionality into the base versions. Ahead of TinaB, they are rolling out "GroupMIS", a global, centrlised MIS system, which uses Teradata, Business Objects and Ab Initio (their integration suite).

He talked about the cultural challenges of travelling 4000 miles to a country and telling them what best practices are. Peter's advice is to tackle the emotional reasons ("Why are you taking my data?") before you provide them with the logic ("It's going to save us money."). He recommends sharing your vision with your suppliers and getting them to help push you
over the line. It's good to hear a large corporate talking this way after years of hearing "we keep our suppliers at arm's length" from corporate IT-types.

Michael McIntire holds the title of 'Principal Architect' with eBay and gave a talk called "Infinite Scalability, How to run a 1 Billion Customer Company". The room was PACKED. Standing room only. I'm sitting on the floor! Michael says their user community knows more about how their business should run than they do because they are closer to it, so eBay try to tell their users a lot about what's going on and give them lots of opportunity to provide feedback. You can build scalable systems and a huge data warehouse, but if you don't build your applications properly, it doesn't matter. He is covering lots of services-oriented architectural principles that many companies are becoming familiar with as concepts, but obviously eBay does this on a daily basis more than most. Their database is 5 times bigger today than it was 3 years ago. They use XML a lot to export data, use business rules aggressively and utilize intelligent notifications to get the right guy out of bed when something goes wrong. One interesting point is that they test their vendors' systems by throwing 100 times the load that they actually expect to need day one from the application because they know they will be there in a few years anyway. He had LOTS of deep architectural information in the presentation which I'm not going to even try to repeat here, you should have been there!

Chris McLean is a Senior Industry Consultant & Practice Partner with Teradata.
His talk was called "Best Practice in Profitability Analytics". He explained why companies need a stronger picture of profitability at a customer, product, channel, and organisational level and how this information needs to manifest itself in the delivery of their products and services. Chris' recommendations for getting better analytics include getting sponsorship from the Executive Level; Aligning strategies and tactics of profitability information across the organisation; Driving the applications base upon the financial impact to the business and timely delivery; and Creating cross-functional team across the organization to manage execution.

8.50am-10.00am Keynote Speaker - Graeme Wood, co-Founder of Wotif.com

My first impression of Graeme is that he's older than I expected. Being a dot commer, I though he'd be a young bloke. He's probably about 50. Spent 35 years in IT industry (including working at IBM) before starting Wotif in 2000. Wotif is an online accommodation booking business. It was set-up to manage "distressed" hotel inventory. Distressed hotel room are those that will not be full tonight. In 1999, Graeme was working with a hotelier who was prepared to reduce the rate of his rooms if he would fill these distressed rooms. The problem he had was getting the word out to the market that the rooms were available. This was Graeme's introduction to "dynamic pricing". The other part of the jigsaw was going direct to the consumer via the Wotif website. That is where the idea came from. Graeme's accountant raised the seed capital, Graeme
knocked up a prototype site on his laptop, and started going out to hotels pitching it. IN March 2000 they had 60 hotels signed up who paid nothing but wotif got a commission if they sold them a room. March 2000, of course, was just as the dot com boom was crashing. They eventually had a customer come and book something through the site, Graeme popped a bottle of champagne, got all emotional... then the customer's credit card bounced. When he tried to advertise in the Sydney Morning Herald, they wouldn't take his ad. Their business was built on word of mouth marketing. They still spend NO MONEY on offline marketing. The name was originally "standbyaccom.com" but they hadn't trademarked it and one of their competitors used the name in an ad in the Australian Financial Review that used the "standby" name, there-by getting the trademark. His lawyer told him they were "buggered", so they needed to get a new name. The "wotif" name popped into his head at 2am one morning and he ran with it. In terms of innovations they have introduced, one was "live inventory". Hoteliers have total control of their own pricing by logging in and managing it on the fly. Wotif also introduced a matrix display (allowing you to see rates over time) and they decided to take a low margin. It was the independent suppliers that really picked up on the game. WOtif introduced an even playing field. Because with Wotif you can only book 14 days in advance, their customers are mostly small-to-medium business and impulsive travelers. He claims that about 30% of
people in the street will have heard of the Wotif brand and know what they do. That's pretty amazing for a company that hasn't spent any money on offline marketing. Currently doing $30 million turnover per month. Only about 8% of accommodation in Australia is booked over the internet at the moment, so growth prospects are high. They are listing on the ASX in the next couple of months, have 120 people working for them, offices in several countries. One of the benefits of going through the IPO process is the discipline it forces upon the management.

Graeme says companies must innovate or perish. If you try to stand still, you will actually be in a state of entropy. Organizations don't create ideas - people do. A framework for understanding the people in your organization:

1. At the top of the tree are those who are truly creative. Truly creative people are constantly
challenging the status quo. They may not be coming up with huge ideas, lots of small good ideas are just as valuable as huge ideas. You may not know who the people in your organization are who are coming up with these ideas. Creative people ask annoyingly simple questions. If they don't get good answers, they get bored and often into trouble. Sometimes they don't even know that they are creative people. Graeme was like that early in his career. It wasn't until someone told him that he was creative that he realized it was true and he started to trust his judgment more.

2. Next are people who think from first principles. They think for themselves and analyze everything and understand the strategic imperatives of the business.

3. The regurgitator. These are people who don't really think. They may look perfectly normal, they may wear a suit, etc. But they don't think for themselves. They are programmed to regurgitate the last thing they heard. They never challenge authority.(Cameron's note:HEY! I used to work for one of these people!) Regurgitator in management positions are bad news. They will crush new ideas coming up from people underneath them because they like the status quo. It's safe.

So do a quick stocktake of your management team. If people fall into that regurgitator state, you need to do something about it. You need to support the people in your organisation who are coming up with the new ideas. New ideas are very fragile things.

What about the guy who invented the wine cask. He was probably sitting there with his wife one night, pouring the wine from a bottle, and said "hey wouldn't it be good if you could pour the wine from a cardboard box?". His wife might have told him not to quit his day job and have another drink. You need a corporate culture which supports the expression of new ideas. They don't mind having the new ways of doing things challenged. They are prepared to invest in exploring new ideas, even if they fail. They support the people who come up with new ideas. They do this at Wotif by having meetings where people come up with new ideas. There are three hurdles for those new ideas.
1. More customers or happier customers
2. Will generate more supplier inventory or make their suppliers happier.
3. Make their investors happier.

If it meets one of those, the idea can be explored.

Where do innovation and technology sit? Which is the chicken and which is the egg? The push has to come from the business. "Premier Pete" (the QLD premier) runs a "Smart State" award. It recognized the entrepreneur, the idea, and execution is important. They also run a "Smart State Council" to make the state smarter, but it's run by a scientist, which Graeme thinks is strange.

The growth of technology may have outstripped our ability to comprehend the opportunities it presents. People want privacy but they also want personalized service. That's a challenge. There are silos of data in organizations but there are also silos of data in industries. You have huge challenges and opportunities ahead of you.

Q&A:

In this section, Graeme said they had let go a lot of opportunities in order to stay focused on short-term accommodation booking.

Most of their growth now happens outside of Australia.

Their brand didn't test well in Asia (for some reason people try to pronounce it "woofit" and think it's related to dogs) but they decided to keep it anyway.

Julian Beavis, Vice President, South Pacific Area, Teradata, is giving the welcome address. He talked about how important making fast, accurate, day to day decisions are the long term
success of every business and how Teradata's technologies are designed to help businesses improve their ability to improve their decision analytics. It's all about converting information into insight. According to Julian, the "5 As" of decision analytics are:

• alignment
• acquisition
• analysis
• action
• acceleration

TD has topped Gartner's scorecard for the last six years and is way ahead of their competition.
One of their local top customers is CBA. A couple of their representatives received a "decade of
partnership" award for ten years of working with Teradata, as did representatives of St George Bank for their 10 years. I've never seen a vendor hand out awards to their customers for longevity before. Interesting idea! The NAB, another customer of theirs, has just won an award from the Direct Marketing Association for a service they run on a Teradata database.

Hey he mentioned me! He said they had their first blog running for this conference and mentioned the "blog writer" and said I'll provide them with "Open and frank communication"! Go Julian!

Welcome to the Teradata Universe 2006 blog. I'll be your host, Cameron Reilly. The fun starts in about 8 hours, so either subscribe to this RSS Feed or pop back about 9am Sydney time Wednesday.