Of Hobbits and Analytic CRM (With Apologies to J.R.R. Tolkien)

Arthur O'Connor

Updated · Mar 20, 2002

Photo Arthur O'Connor

At the time of this writing, my teenage son has seen “The Lord of the Rings” no less than four times. I’ve seen it with him twice; the second time I brought along one of my daughters to see if I could interest another family member in the famous trilogy. Let’s just say “The Lord of the Rings” apparently is not a “chick flick.”

When I saw the film the second time, I began to sense some striking similarities between the social topology of Tolkien’s Middle Earth and the political landscape of the modern corporation, as it relates to analytic CRM system design and implementation (if you suspect I’m long overdue for a vacation, you’re probably right).

Here’s how I see the different social groups of Middle Earth lining up with the political factions of the modern corporation.

Elves: These are the front-office development types. They belong to three tribes: Java fans, Microsoft developers, and people who, as a matter of survival or convenience, play in both camps. Elves tend to be hip, young, and excited about the latest in technology. Things such as earning adequate rates of return on technology investments and business process redesign don’t seem to matter to them as much. These people generally believe the CRM fad is over. “We’ve integrated the customer view across channels,” they say, “now let’s move onto something new and more exciting — like building Web services.”

Hobbits: These creatures work in back-office technology. Like their diminutive counterparts in the fictional trilogy, these types tend not to attract much attention nor are they paid much respect by corporate bigwigs. They are often relegated to the care and feeding of dreaded “legacy” systems. To these people, the issue of CRM is just beginning. They are actively involved in implementing messaging layers and other middleware solutions to integrate information from front-office systems to back-office and transactional systems. For example, loyalty programs — tracking what customers are spending money on and orchestrating pricing and service features to deliver premium service offerings to them — require a deep level of front- and back-office integration.

Dwarves: These are database analysts, research statisticians, and behavioral and mathematical modeling experts responsible for aggregating, integrating, managing, and analyzing data. In the eyes of many outsiders, these people (to rephrase a line from the movie) “just want to hide in their departmental caves and mine for treasure; they care not about the fate of business users or the world around them.” But that’s unfair. Their hard work often goes for naught because there’s too much data, spread across too many different platforms, stored in too many different formats and schema, being queried by too many different analytic applications. As a result, developing a simple report requires a long, involved process with great manual intervention, data preparation, and complex coding — often requiring custom development of scripts to execute ad hoc queries against terabytes of data. Without an effective, enterprisewide analytics strategy or a real-time infrastructure to deploy intelligence, most organizations must settle for too little information for users, delivered too late for them to do much with it.

Wizards: These are Wall Street and industry analysts who know everything there is to know about analytic CRM and how to build a sustainable competitive strategy (or at least, they think they do). The industry analyst/wizards are excited that analytic CRM can do what operational CRM couldn’t — that is, demonstrate a quantifiable improvement in financial performance for corporate clients. Analytic CRM offers the potential to automate the deft talent of identifying, attracting, and retaining the right types of customers as well as to capitalize on hidden trends in market demand. The Wall Street analysts are less aware of the promise of analytic CRM. Their mood is generally a function of the highs and lows of stock prices and how accurately their estimates for quarterly earnings track with actual reported results.

Cave troll: The cave troll is any major external event — a large advance in the commercialization of technology, a regulatory change, a major shift in buyer perceptions or behavior patterns — that trashes everything in sight and forces management to rethink its strategy and tactics.

Orcs: Orcs are global competitors, relentlessly fighting to steal your market share and drive you out of business.

Women/men: These are you: the reader, the corporate manager, the consultant. You’re gamely trying to deal with the elves, hobbits, dwarves, and wizards (none of whom get along very well with each other) all the while keeping your eyes out for the cave troll and battling the orcs.

For those of you interested in analytic CRM, I’ll be discussing the topic and showing a prototype solution at the Strategic Research Institute‘s National Forum Building Customer Loyalty and Enhancing Customer Retention to Ensure Business Success in Chicago on April 22 and 23.

Arthur O’Connor is a director and heads the CRM Integration Practice at
Reuters Consulting, a unit of Reuters, PLC. As one of the nation’s
leading experts on CRM and business intelligence solutions, he writes on
business and technology trends for eCRMGuide.com, as well as on CRM
strategy for ClickZ.com. He is a frequent speaker at industry
conferences. Last year served as chairperson of the Institute for
International Research’s CRM Project Management Conference.

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