SAS opts for analytic side of CRM

ORLANDO — Don’t be an Enron.

The disgraced down and out energy company’s name was bandied about frequently at SUGI 27, the annual user conference of Cary, N.C-based SAS Inc.

“”We’ve come from 20 years of corporate decision making

based on spreadsheets,”” said Robert Cringely, host of PBS’s I, Cringely, at the event’s opening session Sunday. “”The data was there,”” he said of Enron. “”It had to be there, (but) there was no mandate to use that information. Organizations tend to value systems over data, but users value data. In this case the users are right. Without good data, systems are meaningless.””

“”We all have massive amounts of data from automated processes,”” said SAS’s CEO, Dr. Jim Goodnight. “”All through the 90s companies struggled to implement ERP solutions. They don’t provide intelligence.””

According to Jim Davis, the company’s chief marketing officer, 53 per cent of the company’s business is derived from data warehousing. “”The solution is only as good as the data that’s presented. We understand that data needs to be prepared.””

And that’s how SAS is setting itself apart from other vendors of business intelligence tools, Davis said, by offering what it calls analytic intelligence. Customers are recognizing the difference between historical reports and the predicative analysis that SAS solutions provide. The delineation spreads to the customer relationship (CRM) space, according to Goodnight. He contrasted its analytical tools with operational CRM, such as solutions offered by Seibel, which he said are simply computerized Rolodexs for the most part.

SAS isn’t discounting the usefulfness of operational CRM, said Davis. “”It’s an important building block.”” True analytics, however, offers the ability to really drill down into an enterprise on three key fronts — suppliers, the organization and customers, all supported by what the company calls its intelligence architecture.

“”A lot of people think they’re doing this by building the data warehouse and reporting its contents,”” said Davis.

SAS solutions include tools for human capital management, supplier relationship management, and risk management. In the third quarter of this year, it will release the next generation of its intelligence architecture. Release 9.1 will expand scalability capabilities and integrate further with enterprise information portals. It will also support key Web services standards such as Simple Object Access Protocol (SOAP), Universal Description, Discovery and Integration (UDDI) and Web Services Description Language (WSDL).

SAS solutions are designed to platform independent, said Davis. “”Mainframes aren’t dead. There is a lot of legacy data stored out there on that mainframe.””

Of the 3,500 users attending SUGI this year, many are from the healthcare/pharma area, one of the company’s key vertical markets. In Canada, the market for SAS solutions varies slightly, said Cameron Dow, solutions marketing manager for SAS Canada in Toronto, although the focus on industry verticals remains.

The pharmaceuticals industry in Canada is less developed, he said, but banks and telcos are a particularly strong market, especially the latter since deregulation. “”There’s a lot of challenges there,”” he said, especially with the customer churn in the long distance segments, and analytic intelligence enables them to predict some of this churn by analysing customer behaviour. “”The energy sector has really grown for us out west on the risk management side.””

The difference between BI and what SAS offers is that BI provides historical reports — what happened today or yesterday, said Dow. “”Those are lagging indicators.””

However, Paul Tremblay, alliances and knowledge management manager with Fujitsu Consulting’s Business Intelligence Centre of Excellence in Montreal, said predictive modelling or data mining is just one kind of analysis.

“”Every technology has its own place in the BI spectrum,”” he said, adding that business intelligence and analytic intelligence are more complementary than competitive. “”It’s kind of like comparing apples and oranges.””

Tremblay said SAS has always been a leader in the predictive modelling space because of its long history in data mining and statistical analysis, and that by comparison, BI and data warehousing are relatively new concepts.

What’s happening now, said Tremblay, is that predictive modelling is being brought closer to the business user. It used to be that a C-level executive or business manager would have to ask the IS manager to generate a report with historical data to analyse. “”The key problem with that cycle was that it took a while to get the reports back,”” he said, and in some cases, up to week. “”Therefore, they wouldn’t bother asking certain questions.””

Business users are now able to answer queries they have on their own instantly through “”executive dashboards”” on their PC, although they still have analysis people on staff for more complex modelling. “”Now we have a little more flexibility,”” said Tremblay.

Chris Pieper, president of SAS Active Peformance Management, said the company is trying address those C-level executives by giving them information to identify business problems and size new opportunities. “”Financial accounting data was designed for accountants. It doesn’t give us true costs.””

Pieper said often organizations spread costs throughout departments based on which ones can afford to bear them, so it’s not often immediately clear what impact cutting an employee or line item might really have on the entire organization. He said poor financial intelligence is fraught with pitfalls and often sends out the wrong signals. “”If your costs are wrong, your profits are wrong.””

SAS is the largest private software company in the world, with revenues in excess of US$1 billion. It currently plows 25 per cent of those revenues back into R&D, something that most public companies do not have the luxury of doing.

While there has been talk of SAS going public, it’s not something it is rushing to do, said Goodnight. In addition, company sentiment shows that about 87 per cent of employees do not want the company go public, said Goodnight, and that in the current economic climate, SAS would have likely had to lay off people as a public company, even though the company is currently debt-free and profitable. “”If we were public, we would feel a lot of pressure.””

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Gary Hilson
Gary Hilson
Gary Hilson is a Toronto-based freelance writer who has written thousands of words for print and pixel in publications across North America. His areas of interest and expertise include software, enterprise and networking technology, memory systems, green energy, sustainable transportation, and research and education. His articles have been published by EE Times, SolarEnergy.Net, Network Computing, InformationWeek, Computing Canada, Computer Dealer News, Toronto Business Times and the Ottawa Citizen, among others.

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