Andrew White

About two years ago Kathy Harris (see her blog here), a colleague of mine, and I spent some time with an idea that went nowhere.  The idea we explored the issue that arises when firms segment their customers, yet customers don’t always follow predictable patterns of behavior that are implied by the suppliers segmentation of the customer.  Still with me? 

Many firms segment their customers in order to focus energies and services more effectively.  We all know the truism that some customers are more important than others (just think about the period end to prove the point) but most firms are not able to treat customers equally even if they wanted too, since resources are finite.  So customer segmentation makes very good sense; it should support notions of leverage of supplier resources in order to better relationships and revenue exchange.  But, the way firms segment their customers do not, as a rule, follow the methods by which customers segment themselves!  So the question arose: would it be better (i.e. more revenue) for the supplier if they could a) understand how customers segment themselves, and b) can a supplier actually relate this segmentation to how they do business?  Can an inside-out viewer understand an outside-in view, and map to it?

Little did I know but this question had some roots in semantics, and MDM. But before I can make that link, we need to first look at segmentation.  Just look at your son or daughter and evaluate how they define their social networks – both online and offline.  These networks, the aggregation of them, represent a near-unique structure that would large numbers of preferences, likes, and intentions.  But these segments are self-described (with respect to the firm, even if they are offered by 3^rd parties who want you to join their network), and most likely not even related to the suppliers of products and services.  Kathy and I came to the conclusion, 2 years ago, that there were two maps that needed to be bridged: one map represents how the firm looks at its customers and market; and the other is how the individual customer relates to all other market stake-holders.  In fact, the problem is how to map ontology’s.

Now before you go all bleary eyed on me, don’t panic!  This is not that hard to talk about, really.  As Wikipedia states, “An ontology in computer science and information science is a formal representation of a set of concepts within a domain and the relationships between those concepts. It is used to reason about the properties of that domain, and may be used to define the domain.”  So a very large and complex ontology could be used to describe how my son connects and relates to all manner of networks; and a much simpler one could be used to describe how a firm perceives its markets and customers, and how they relate to each other and how they are segmented.  

MDM comes in as part of the semantic dialog in that to bridge the ontology’s, some semantic mapping needs to take place and where would you start, but with the master data that is re-used across the ontology’s: the common keys, if you will.  So why this post today?  It so happened that I spent yesterday with a large technology vendors who is researching (they have a large technology research body) how to get commercial value from, and I paraphrase, the semantic enterprise to the semantic web.  I coined the term semantic enterprise 5 years ago when I presented, with another colleague of mine, Simon Hayward, on the topic of the Connected Enterprise.  The premise was: how does a firm change its behavior of semantics were pure and consistently clean across the enterprise.  Today of course we spend a lot of our IT budget coping with the fact that much of our data is messed up, duplicated, of poor quality, and so on.  Semantic are rarely top of mind of executives, but it seems that semantics, or the miss management of them, are the root of many of our mutual ills.

At least I found a peer in industry that is looking at the same problem- and a peer that has some emerging technology that may, in time, prove valuable.  And whoever thought that talking about semantic and ontology’s was boring?