Will someone try to defraud your business? Use their account with you to circumvent laws? Threaten your customers? Left to your own devices, it may be difficult to ascertain the true intentions of everyone who wants to be your customer.

To support this initiative, government agencies across the world have created watch lists to help identify individuals who may represent security risks. At the same time, the same governments often require companies to collect, validate and match key information related to a customer’s identity to support the global fight against terrorism, fraud, money-laundering and identity theft.

While anti-money-laundering requirements may only affect financial institutions, the broader requirements impact most every business. Compliance with the USA Patriot Act, Red Flag Rules, Bank Secrecy Act, HIPAA and Sarbanes-Oxley, for example, all require a more accurate, more in-depth view of your customers.

Data quality is often the first line of defense. For executives in charge of compliance, poor data can result in the company facing public embarrassment, damage to brand equity, significant fines and even lawsuits.

Technologies such as Pitney Bowes Spectrum ™ help automate the customer screening process with robust matching and scoring mechanisms. Such solutions consolidate various agency and country lists – providing a single source for matching against both third-party and internal fraud databases.

In any case, whether your company treats this as a security concern or a compliance issue, your company’s data steward may be the one person best equipped to mitigate the threat.  What is your company doing to protect your company and customers from fraudulent individuals?

In a recent CTO Edge Corner podcast hosted by Mike Vizard, Jay Bourland from Pitney Bowes explains how IT organizations need to bring good data governance practices to bear if they ever want to get a real handle data quality.

Listen in as Mike and Jay discuss how some IT execs are dealing with long-overlooked challenges. For example:

• Juggling access and security. Data becomes more valuable when accessible by more people, but every new approved user represents a threat to data quality and privacy.
• Responsibilities for data governance. Is it a committee? A person?  Is this an IT function or something everyone needs to be accountable for?
• Relationship between IT and business units. Where in the process should business users engage IT, and vice versa?  The good news is, effective collaboration is attainable.
• Organizational roadblocks. Are data profiling, cleansing, updates, governance and integration all managed by the same person on the same schedule? If not, you can still get everyone on the same page.

In addition to these insights, Mike and Jay also touch on the capabilities organizations should look for to achieve the greatest ROI.  Let us know your thoughts.

Over the next few months, consumers will head to the malls, superstores, and in increasing numbers, to their laptops—and retailers will be looking for any edge they can find to increase sales and margins during this holiday shopping season.

Given the sluggish economy, cost pressures and changing consumer behaviors, there has never been a better time to leverage Location Intelligence in your business. Retailers, manufacturers and shippers will find ways this year to move product to more people in smart, cost-effective ways by analyzing the relationship between distribution centers, retail sites, critical customer segments and household locations.

This is especially critical in light of expected shifts in customer behavior. The down economy means that many customers are buying less, they’re more price-conscious, and they are more selective about what they buy. Many customers are also buying more online—increasing the role of logistics and fleet management.

Using location intelligence to chart how these trends are impacting your business is often the key to greater profitability. Better Location Intelligence can help you to:

• Better project performance of existing retail sites
• Determine optimal locations for new retail sites
• More effectively allocate marketing dollars
• Chart more efficient delivery routes
• Reassess distribution-center locations in light of the increased proportion of direct-to-consumer shipping

In fact, companies that invest in top-quality location intelligence solutions often see positive ROI inside of six months.  And many achieve a six-figure return on their investment within the year. Add in the intangibles—happier customers, happier delivery people, and happier customer-service personnel—these all result from greater efficiencies, better communications, and better information sharing throughout your organization.

More information on how Location Intelligence and other data-quality improvements can enhance day-to-day and long-term business performance is available in our white paper:  “Special Delivery:  Just-in-time Savings.”

The Business Intelligence blogosphere is abuzz with questions about how IT and BI personnel can become more effective in serving their internal customers.  In fact, a recent study by the Society for Information Management shows that even in today’s tough economic times “IT/Business Alignment” is right near the top of CIOs’ business concerns.

In the process of providing tools that help CIOs do their jobs and playing a consultative role in helping to bridge the gap between IT and business, PBBI often faces the issue of alignment as well. Over and over, we’ve found that the key lies in asking the right questions upfront.

Too often IT asks (or is told the answer to) the question: “What information do you need?” Armed with the answer, IT then goes off to ensure that they find a way to get that information back to the business as quickly and efficiently as possible. However, if IT is to be truly business-aligned, the question that really needs to be understood before “What information do you need,” is this one:

What problems are you trying to solve?

This is the place we always try to start with our clients, for three key reasons:

Reason #1: The information the business needs is invariably an outgrowth of the problems it is trying to solve. Questions – and the answers to them – evolve and beget more questions. The CIO and IT team that is actively participating in the process of defining and solving problems and questions rather than just taking orders for information is in the best position to provide true insight – and that has the greatest long-term value.

Reason #2:  Information provided in a vacuum often has severe limitations. I’ll give you a good example: quite a number of factors, if not addressed up front, can limit the accuracy of any predictive analytics.  This point is illustrated in this recent PBBI white paper developed by our crime-mapping expert, which provides an insightful listing of the types of limitations that need to be considered.

You’ll see that there are quite a variety of factors, ranging from underreporting of certain crimes to seasonality to data compatibility issues and more. Crime maps provided without acknowledgement of these limitations is just order-filling. And an IT team that fills these orders runs risks of running afoul of any or all of these issues.  However, crime maps produced with an understanding the problem(s) the business is trying to solve, and the nature of the impact these limitations could have, can be adjusted for a more accurate reflection of circumstances.

Reason #3:  Working collaboratively with the business also provides IT with a much greater opportunity to make its case for investing in necessary improvements in data quality. I blogged a bit about this back in August, citing a Information Difference Research Study, The State of Data Quality Today that reported that a full 63% of organizations had no idea what poor data quality may be costing them. By taking on a collaborative role, IT is likely to have better access to both the business’ ear, and its purse strings.  When you’re just taking orders, you’re less likely to be able to sell the importance of data-quality investments across the business.

The bottom line:  Information can be valuable.  But Insight can be priceless. In our experience, the best road to insight is collaboration between the business and IT, starting all the way back at the point of problem definition – do you agree?

So, why does good data make such a difference?

Bad data hurts your image, your operations, and your bottom line – and just gets worse over time.

• It means more returned mail and redundant processes, reduced access to postal discounts, and greater susceptibility to fraud.
• It limits service quality, and that causes lower rates of customer satisfaction and loyalty. 
• It impacts so many businesses and business areas from insurance to financial services; telco to utilities; public and private companies. What’s more, departments within these businesses – from customer service, sales and marketing; to billing and resource planning; to sales-force automation – are all data-reliant.

Companies today, however, are making marked improvements in data quality. Data Governance – an exercise of people, process and tools, typically a committee that represents every level of the organization, defines clear standards for data management, security and use – and Data Stewardship, an expanding role that ensures the business rules set up by the Data Governance committee data are enforced – play important parts in a four-step process that improves both data quality and data usage. 

1 – Access and integrate: All too often data is kept in a different database in every department – you want everyone across your organization to be, literally, on the same page.

2 – Profile and Monitor: Assess where you are, analyze your data and pinpoint issues. Determine what you have, where it’s coming from, and how it does—and doesn’t—work in concert.  As part of this assessment, determine where you can enhance your approach to Data Governance, and set firm rules and requirements going forward.

3 – Remediate: Clean up your data. Validate it. Standardize it. Match and de-dupe it. Enrich it with spatial, credit and/or marketing data that will enable your organization to use it better.

4 – Deliver/Federate: Empower your Data Governance Committee, specifically your data stewards to advocates proper collection, management and use of data.  First ensure it is fit for use, then ensure it used as intended.
With the new modular tools out there today that work across platforms and address each and every one of these steps in an integrated fashion, getting to better data quality is certainly getting easier. 

What steps are you taking to improve your data quality – and your bottom line?

Our customers have been emphatic in their needs to improve the cost basis and productivity of all internal functions, including print and mail operations. By integrating what was two islands of automation we can help drive significant production efficiencies, reduced cycle times, total lower cost of operations, and overall productivity.

Expanding into production print is a logical next phase of the market-leading technology and professional services that Pitney Bowes provides to our customers worldwide. With the acquisition of Group 1 Software in 2004, Pitney Bowes brought excellence in batch, interactive, and on-demand document composition; document management, mailing efficiency, data integration, customer data quality, and business geographics into the portfolio.  With the acquisition of Emtex in 2006, the company added world-class enterprise output management. With the acquisition of Mapinfo in 2007, we created the means for customers to build highly relevant customer messaging to their target audiences with consumer profiling, predictive analytics, and location intelligence.   The sum of these acquisitions and this new strategic alliance present exciting new opportunities for our customers.

From a personal perspective though I wanted to add a note of profound gratitude to many unsung heros that demonstrated the best of Pitney Bowes values in achieving this new alliance. 

After exploratory meetings at GraphExpo 2007, Victoria Cashion of Pitney Bowes Business Insight and I flew to Idaho on New Years Day 2008 to meet with representatives from HP and Murie Design to spec out an application and program plan for the IntelliJet at drupa 2008.  Not only were the deadlines extraordinarily tight – the demands of the project were exacerbated by the moving target of a new print platform where innovation and engineering were still in the critical path.  Success would be dependent on agility, iteration, communication, and collaboration.

Partnering with HP at drupa 2008 would require the coordination of four different Pitney Bowes entities across both sides of the Atlantic and numerous entities and stakeholders within HP.   This project was unbudgeted, unresourced, unprioritized, and in fact not on anyone’s radar map on that New Year’s Day in Idaho.  But upon my return I once again experienced what makes me so proud to be a Pitney Bowes employee.    PBers from Document Messaging Technologies, Ptiney Bowes Business Insight, Emtex, and our International operation rallied around our prospective partner and each other to show HP and the industry what we could do together.  They worked incredible hours to not only complete what they needed for their “day jobs” but to support this initiative.  The result was a stunning demonstration of how Pitney Bowes technology, people, expertise, agility, and teamwork could make the IntelliJet and our high speed production inserter shine.  The buzz from drupa 2008 and the goodwill demonstrated by both parties provided the foundation for establishing this new strategic relationship.

We grow by making customers successful.  And it is our people and partners that make that success happen every day.

Until next time,

Bernie

Apparently a large percentage of products shipped into Africa for retail sale, especially from China, are fake.  The problem we hear most about has to do with fake Gucci bags and Rolex watches, maybe, but a more dangerous and difficult issue is fake pharmaceutical products.  Bright said in some categories as many as 40% of the products imported are simply fraudulent, and in the pharma category this creates not just an economic problem but a serious health risk, as well. 

However, one thing almost all Africans know how to do is top up their cell phones.  Mobile phones have a 40% penetration rate in Africa, and 80% of people at least have access to a mobile phone, even if it isn’t their own personal device.  To top up a phone, the user will buy a top-up card in a retail outlet, scratch off the number on the card, and text it in, at which point the operator extends his time on the phone. 

So mPedigree is working with African governments to ensure that drug products come with item-by-item authentication numbers.  You buy a product at the pharmacy, open it, text in the enclosed number, and you get a message back confirming that the product is genuine, and not a fake.  It’s a smart system. 

But there are lots of applications for this kind of connectivity in US healthcare, also, as Jonathan Bush pointed out, from Athena Health.  His is a public company with about $1 billion in market cap, and their main business is processing claims for doctors to be paid by insurance companies.  Jonathan said their company actually has data to show that more than 50% of doctors’ orders disappear and aren’t carried out – whether it’s an order for a blood test or an x-ray, or an order for a prescription to be filled and the drug taken by a patient.  This is an astounding figure, but he assured us it was true – and they didn’t comb through their data to try to produce this figure, it just dropped out of the other analysis of claims data they were doing.  But, said Jonathan, cell phones could easily be used to report prescription compliance and other things to help ensure that doctors’ orders were fulfilled. 

Pitney Bowes’ Jim Euchner was at the table for this event with us, and he said Pitney Bowes has a strong product offering in the medical compliance arena, and that the problem wasn’t always just oversight or forgetfulness.  Sometimes a drug has unpleasant side effects, or a person simply doesn’t want medicine in his body – there are all sorts of social factors that are at work in non-compliance. 

And Cisco’s Kaveh Safavi, VP of the company’s healthcare practice, finished our session with some truly interesting findings from their company.  For instance, 1% of health care claimants are responsible for 29% of claims, while the bottom 60% do only 1% of the claims, and 80% of employees will NEVER incur $8,000 in healthcare costs in a single year, which is what the average annual insurance premium is.  Kaveh said that 86% of all national healthcare expenditures go through third parties, as well, and this creates a tremendous problem in terms of the dissociation of payment from treatment.  We all want our healthcare costs to be paid, but “insurance” is what we should buy to protect against catastrophic losses, while instead many consumers have first-dollar coverage for everything, either because their companies provide it or because they buy added coverage to provide it for themselves. Either way, they have very little knowledge of the actual cost of the medical procedures they get, and not much interest in the subject, either.

Medicare, for instance, is a classic case of very poor utilization of resources.  Athena Health’s Bush said Medicare is without a doubt the single worst case of poor healthcare utilization management in the whole world, bar none.  At this point, another member of the audience (not identified in this post for obvious reasons) said that her retired father, who is perfectly healthy, is on Medicare, and he goes in for an MRI every month or two, just because he can.  He has no idea what it costs, but it costs him zero, because he has first-dollar coverage (apparently he has a supplement to Medicare that provides this).  So he just wants to make sure he doesn’t get sick!  Needless to say, MRIs are enormously expensive, but since he doesn’t pay any share of this expense, he has absolutely zero interest in reducing his usage.  (It should be no surprise that US healthcare costs are soaring out of control, and no one seems able to fix it.) 

At the end, our moderator asked the panel to tell us the one thing they would tell Washington, if they had a chance, in order to deal with healthcare.  Other than ensuring that patients get better connected to the actual costs themselves, so that they at least have some “skin in the game,” the most interesting suggestion came from Jonathan Bush, who suggested that deregulating enough to allow individual entrepreneurs to take charge of particular types of medical treatments would probably be the best course.  Doctors and insurance companies own the whole show right now, and the only alternative being considered is whether to give some of this responsibility to the government, which would probably be even more disastrous.  Bush said we really ought to let some creativity flourish in the nooks and crannies.  To take a simple example, he said x-rays could almost certainly be delivered at a small fraction of their current cost, if there were just a bit of entrepreneurial energy allowed to be injected into the process.

People didn’t think you could do private equity in tech.  But the naysayers missed how fundamental the tech sector has become to operation of society. Conventional wisdom through most of 90s was that tech investing was about finding some 25 year old kid with body piercing who created new stuff in his garage.  But by the 90s many tech businesses had grown up into firms like Cisco and Intel and others, with reliable cash flows and dependable franchises.

Jonathan invests in media firms, says he doesn’t understand how generalists can be so general.  He said his first fund was turned down by roughly 300 investors.  In 1990, the notion of a specialist fund was new, and in general the institutional investors just didn’t like anything new.  Fast forward to today, and specialization has turned into a great advantage.

Business environment – looking at Providence’s portfolio today, probably not much different from other funds, it is feast or famine.  Some of their firms are doing terrifically, while others are in the gutter.  Ad-based models have been crushed over last couple of years in general, but subscription models have continued to do well and flourish, for example. 

Problem with investing right now is that there are very few willing sellers.  People are not happy about selling at this year’s valuation, but want 2007’s valuation.  Valuations have begun to “season” now.

Jonathan doesn’t think we’ll see the kind of access to capital that we saw in last five years for a long time, although banks will lend and investors will invest.  But the securitization market is evaporated completely and not being rebuilt, at least not yet.

One of the more interesting issues discussed extensively was the eco-system of applications development, which is characterized by a few very large players, such as Google, Oracle, and Microsoft, but also by thousands of mom-and-pop developers now.  It is a thriving system, which ensures that we will all be able to do more and more with our phones, from paying for things directly, to locating ourselves more efficiently.  AdMob, for instance, said they have about 2000 developers, hundreds of which are 1 or 2-man shops.

Just as an aside, in a comment that indicates how huge Google is, Vic Gundotra (Google’s VP of Engineering) said that Google monitors its system for spam spikes – when they see a big spike in Web traffic in a particular country they often think it’s an example of spam.  But recently they had a big spike in India that turned out to be the result of one of the carriers there, AirTel (?), which had offered a special deal on internet time, and when people aren’t actually charged for usage they dramatically increase their browsing.

1)     How are human-technology interactions changing? With the rise of smart phones, netbooks and more exotic technology like Sixth Sense, our basic mode of interacting with information via a keyboard, mouse and video screen are starting to change. Touch, gestures and voice are all becoming a natural part of our user experience. But we’ve only begun to scratch the surface. What will our users expect in the next five years?

2)     Most people divide our world into two demographic groups when it comes to interacting with technology. There are the technology immigrants who migrated to the use of computers or technology during their lifetime. We are constantly amazed at new advances and the way the computer has changed our life. Our approach to technology is to use it to accomplish something we used to do manually. A digital native grew up with technology. A computer and the internet is no more astounding than a toaster. While they might react with excitement to some new innovation, it often feels evolutionary instead of revolutionary to them. When approaching a problem they reach naturally for technology rather than “porting” a manual solution to an automated form. But we are starting recognize a division in the technology natives. Those currently in the workforce or just entering it have a very personal view of the internet and technology. The internet exists for them to use. Younger digital natives have a different approach. The internet is a social place that we experience and explore together. How will the new paradigms introduced by social networking affect how people interact with technology? Will the experience that the user expects change? Will we need to build more collaborative applications? Include more instant communication?

3)     What are the barriers to technology adoption? As I sat on the airplane, I am still amazed at how low-tech the process around air travel are. I have to mange bits of paper and physical documents like boarding passes and identification. Security is managed by people looking at video screens, patting down passengers or physically searching luggage. After a plane is boarded, the attendants count the passengers manually, and the flight crew carries satchels of paper documents. And then of course there is baggage. Some of these things are starting to change, but in many ways these processes lag far behind what is possible. As we look at a new era of smart computing, what areas are going to be able to adopt new technology and processes and which will lag behind?

I’m looking forward to getting to Pasadena and starting the fun!