Analyze the Business Needs
All of these companies' efforts to extract value from their customer data were supported by strategic corporate initiatives. They first identified a business need, and then developed their systems.

Ace Hardware recognized that to compete with big box stores such as Home Depot and Lowe's and with other cooperatives such as TruServ and Do it Best, it would have to become more retail and customer focused. Since the Oak Brook, Ill.-based company's inception in 1924 until the early 1990s, Ace had primarily functioned as a wholesalerbuying merchandise in volume and redistributing it to its 5,000 independent stores. Because the company was so focused on the wholesale side of the business, it didn't have much of a view into its retail operations. Ace saw a data warehouse as a way to collect and analyze point-of-sale (POS) data from stores that elected to share it. The challenge the company faced was in convincing its co-op members to share their POS information.

At AMS, corporate executives monitoring falling interest rates in 2000 saw an opportunity to expand the company's market share by entering the loan consolidation market. The company needed a way to identify prospective candidates for loan consolidation among its existing customers, and needed to build a call-servicing system to help support the new business. AMS CIO John Mariano and his two developers set out to create an interface to six internal and external systems that call center agents could access in order to serve consolidation customers. ICE helps loan servicing agents act on leads indicating which borrowers in the company's Perkins Loan servicing system might be ripe for loan consolidation. "Rather than buying leads on the open market, we mined our internal data to generate our own leads," says Mariano.

In the executive recruitment space, Korn/Ferry knew its competitive advantage would come from expanding its service offerings beyond just executive search programs into more consultative, human-capital management services such as conducting management assessmentsevaluations of the leadership and professional abilities of managers and executives. The company already had a strategic management assessment practice in place when it began developing its winning system, but the process it used for evaluating an individual's or management team's performance was arcane and paper-based. Even though the process for conducting management assessments was cumbersome, Korn/Ferry was confident that it could be a competitive advantage; it just had to find a way to make the process easier to execute on a mass scale. Korn/Ferry Senior Vice President and CIO Dan Demeter created an Internet-based solution that automates the assessment process. Now consultants in the management assessment practice can easily send evaluations to clients via e-mail, and quickly and easily tabulate and interpret the results of these evaluations using the Management Assessment System.