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On Balance is BI a Good thing or a Bad Thing for the Consumer?

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Nari Kannan: Business Intelligence has many benefits for business and at the same time raises many privacy issues for Consumers. Grocery supermarket cards get you lower prices in exchange for your purchase pattern information. On balance, is this ethical even if it is perfectly legal? On balance is BI a good thing or a bad thing for the consumer?

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  • Serving and supporting customers without Business Intelligence today would be like old USSR home appliance directives competing with Wall-Mart. “You want a refrigerator Comrade; get on line. If we run out, you’ll have to wait till next year for last year’s model, which will be this year’s if we can locate the train. Now, take this voucher and tell everyone on line as you leave that you are pleased with your government.?

    If you believe that free enterprise is a better consumer model, then you have to believe business intelligence is a good thing for the customer. In a free market consumer feedback forces better overall efficiency, keeps prices down and rewards quality. Business intelligence quantifies and communicates our preferences back to suppliers and manufacturers and allows them to understand what will win our dollars. We may pay a little more than we wished for some items, but not so much more that we walk away, and business intelligence tells retailers and manufactures that to.

    Customer centric data enables organizations to better understand their customer's preferences. Operational metrics allow trends and exceptions to be discovered and linked to production and and distribution so the products we hoped to buy are available when we need to buy them.

    Most importantly, companies that use business intelligence wisely will be be around to support their products and new and existing customers in the future because they have figured out how operate more profitably in this new economy.

  • I agree with Dyke's response, very well done. As I read the question, I was reminded of one of Scott McNealy's glib quotes from almost ten years ago: "You have no privacy, get over it."

    This was Scott's pithy way of saying that the benefits of being a consumer in a world full of data about you is really a chance to stand up and be counted. With the information a single consumer represents (by his completing a short, post purchase survey or swiping his frequent shopper card at checkout time), he can make a real difference through the feedback he's providing. This sort of rapid, innocuous data gathering beats the old telephone surveys or terribly targeted product pitches by a mile.

    True that much more is known about each of us today then we're likely comfortable with, but the reduced prices and better selection that results from the greater intelligence is most likely worth it.

    Brian Gentile
    CEO, Jaspersoft

  • This is an interesting philosophical question – since in most cases the consumer is, at best, indirectly affected by how an enterprise uses business intelligence to operate and make decisions about how to serve or treat their customers. And of course, only those enterprises targeting consumers would be relevant.

    I can see cases where the consumer is better off and others where he/she is not necessarily so. Of the former set, you have cases where companies try to tailor their cross-selling opportunities to specific individuals based on their past behavior. Amazon.com is probably the most familiar example, where you are “recommended? items whenever you come back to their site. This is probably agreed to be a positive thing for consumers. They are not forced to buy anything, but the recommendations occasionally save a person time searching or gives them a new idea that is welcome.

    There are other cases where BI probably benefits the enterprise first, and the consumer, secondarily, if at all. Think of telecom providers, they generally will segment their customers into profitable ones vs. unprofitable ones. The “better? customers are targeted with upgrade or loyalty offers, or they get a better class of customer service. So some consumers benefit, while many do not, and are therefore “harmed? by BI.

    To end on an upbeat note, by coincidence, in the past week my company (a BI software company) has come out with a free application for Black Friday shoppers. It lets people sort through the thousands of deals much more efficiently than they could possibly do on their own. You can use it from http://www.inetsoft.com/info/black_friday_deals/ So this is an example of a purely beneficial case of BI for the consumer.

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