1. XYZ COMPANYCRM Roadmap Project Final PresentationThe Anglum Group LLC

2. Agenda Executive Summary Micros: Business Requirements Marketing: Direct Mail Marketing: Email Marketing: Credit Cards Marketing: Rewards Marketing: Multi-Channel Execution Marketing: Analysis & Research Real Estate Merchandising Micros: CRM Solutions Data Architecture Data Model Point of Sale & Retail Ops Next Steps 2 The Anglum Group LLC 3. Executive Summary XYZ business users have identified an ambitious set of CRM-relatedrequirements, especially Marketing and Merchandising Supporting the business requirements requires a set of major IT initiativesthat will require significant focus and resources IT also needs to establish and expand ongoing processes to support CRM Ideal timing of the identified CRM initiatives will require a significant near-term effort by IT to support, and may require adding resources or revisingdeliverable timing Ideal execution of CRM will require unique customer-centric skill sets andexperience (both in IT and in other business disciplines) The complexity and cross-functional nature of CRM calls for more definedCRM leadership and decision-making processes, both from business and IT 3 The Anglum Group LLC 4. XYZ business users have identified an ambitious set of CRM-related requirements, especially Marketing and MerchandisingDirect Marketing XYZ plans to extensively scale its direct marketing efforts (direct mail and email)to drive sales and create deeper customer engagement; direct marketing will beguided by customer-specific transaction dataXYZ Co-Branded A co-branded XYZ credit card will be issued in 20XX, and will be used to driveCredit Card sales and gain additional insights into customer behaviorRewards Program Developing a compelling customer value proposition is a critical linchpin forongoing CRM success (esp. customer data capture); XYZ is considering aRewards Program to provide such a value proposition, although the specificprogram design is still to be determinedMulti-Channel Providing customers with the ability to order/exchange product across both in-Execution store and online channels is an important business requirementAnalysis & Research Analysis using customer-specific profile and transaction information will be used togain deeper customer insights and measure CRM results, and will drive businessresults across disciplines (Marketing, Merchandising, Real Estate, etc.)Real Estate New store site selection and store closings will leverage customer-specific profileand transaction data, as well as analytical toolsMerchandising Optimizing in-store product assortment at the individual store level, as well asimproving pricing and markdown management, will also leverage customer-specific data, and is likely the largest potential CRM benefit4The Anglum Group LLC 5. Supporting the business requirements requires a set of majorIT initiatives that will require significant focus and resourcesPoint of Sale- Enable XYZ POS system to efficiently handle complex data capture, transmittal back to the Customer Hub, and return of customer- specific information that improves customer engagementCustomer Data- Ongoing update process, reflecting new data added over time (e.g., creditModelcard application information) and data aggregations and metrics (e.g., direct marketing performance metrics) - Data must be highly accurate because it drives business decisions; XYZ must standardize its definitions and create organizational buy-inCredit Card- Activities to support the introduction of the XYZ co-branded credit card, and associated POS and data model implementationRewards Program- Activities to support the launch of a Rewards Program; many IT implications are dependent on Rewards Program strategy & designMulti-Channel- Enable visibility to available inventory across channels, specificallyExecutionproviding online access to available in-store inventory and providing in-store ability to order from eCommerce inventoryDirect Marketing - Support increasingly large direct mail and email campaign execution, capture of campaign results, and associated analysisReal Estate- Enable more informed site selection and store closings by incorporating customer-level profile and transaction dataMerchandising- Drive better store-level assortment using customer-level transaction data 5 The Anglum Group LLC 6. IT also needs to establish and expand ongoing processes tosupport CRM Inputs and Extracts Process for integrating new data files and matching to the database Process for extracting data to support campaign management, sharing with 3rd-partypartners and sharing across departments Data Model Definition Process of revising and refining the data contained in the customer data warehouse Data Aggregation and Rollups Process of massaging and preparing data that best serves internal users and production applications Application Development Process of developing solutions that build upon and enhance the existing CRM capability (e.g.,flagging specific customers based on geography or style/size preference, customized merchandisinganalysis/applications, etc.) Tools Process to evaluate and implement best-of-breed tools that serve the business and extend the abilityfor XYZ to efficiently meet internal and external customer needs Metrics Process for defining, creating and managing new data elements and derived data 6The Anglum Group LLC 7. Ideal timing of the identified CRM initiatives will require asignificant near-term effort by IT to support, and may requireadding resources or revising deliverable timing20062007 2008 2009Q4Q1 Q2 Q3Q4Q1 Q2 Q3 Q4Q1 Q2 Q3Q4 Data Feeds (DB2 & Customer Hub) Data FeedsData Feeds Data FeedsData FeedsDDirect MailData Model ModsData Model Mods Data Model Mods Data Model ModsCampaign Management tool implementationMail File Creation CommunityIntegration with Website Dev. XYZ.compayless.comEstablishMonitor capability of DB2 to meetDB2 SLAsSLAs Update POS and Customer Hub for email captureE-Mail Update customer data model for email data Migrate email address tables from Cheetah Maill Data f eeds to/from Cheetah and DB2 Data FeedsData Feeds Enable capture of coupon redemption dateEnable ability to capture redemptions of individual bar coded coupons Develop POS process to collect customer applications and provide credit decisionsCredit Card Enable POS to accept a new card type Enable data feeds of customer records from credit card issuer Enable matching of credit card customer records to Payless records Support Pilot launch and data transfers between POS, Customer Hub and issuing bankData feeds to/from POS, Customer Hub, and issuing bank Data Feeds = Planned = Key= Firm Estimate of Timing = Potential Dependency7= Guestimate of Timing 8. Ideal timing of the identified CRM initiatives (continued)2006 200720082009Q4Q1Q2 Q3 Q4Q1 Q2Q3 Q4Q1 Q2 Q3Q4 Rewards Program Develop infrastructure that will handle rewards program accountingDevelop (and code in data model) business rules for defining transactionsModify data model to support program-specific data needsEnable matching of credit card customer records to Payless records Launch Rewards Program Multi-Channel Develop the Product Information Database (PID) Enable near real-time visibility to store-level inventoryIntegrate PID and real-time inventory view to eCommerce websiteIntegrate PID and real-time inventory view to POS systemAnalysis & Research Identify typical customer data extracts Customer data extracts Data Extracts Enable scaled & automated Finance analysis of marketing programs Embed customer segments/clusters into multiple applications= Planned= Key = Firm Estimate of Timing= PotentialDependency8= Guestimate of Timing 9. Ideal timing of the identified CRM initiatives (continued)2006 2007 2008 2009Q4Q1 Q2 Q3 Q4Q1Q2Q3Q4 Q1Q2 Q3 Q4Implement 3rd-party tool to analyze customer-specific trading area dataReal EstateIntegrate current mapping toolEnable data sharing of store trading area profile information Create central repository for Real Estate tools & dataEnable secure virtual access via web to RE central repositoryMerchandisingOptimize current Assortment Planning toolApply new customer clusters into existing merchandising applicationsRevise merchandising tools to leverage customer-level transaction dataPoint of SaleIdentify root cause of slow data transfer to capture customer phone number and confirm customer IDPilot RGS ability to handle more complicated data transfer Finish conversion of RPSS stores to RGS = Planned= Key = Firm Estimate of Timing = PotentialDependency9 = Guestimate of Timing 10. Ideal timing of the identified CRM initiatives (continued)20062007 2008 2009Q4Q1 Q2 Q3Q4 Q1Q2Q3Q4 Q1Q2 Q3 Q4 Enrichment process NCOA NCOA NCOANCOANCOA NCOANCOA NCOANCOA NCOA NCOAData ArchitectureBuild initial customer data Revise and extend customer data warehousewarehouse Feed customer andIntegrate new sources of customer data transaction data to DWOptimize and tune DB2 data warehouseImplement Unica Extend campaign management toolImplement ETL toolExtend MicroStrategy DSS capabilityImplement data stewardship process Creation of business rules to support data requirements Unica software installationData ModelCreate ETL environment; develop ETL processCreate campaign management templatesIntegration of promotion and response dataIntegration of external data to support business analytics and advanced campaign managementSupport business analytics, reporting and ad-hoc query requests Write e-commerce requirements to understand Accenture e-commerce Design data and business requirements for Real Estate, Merchandising, Store Operations, Call Center= Planned= Key= Firm Estimate of Timing= PotentialDependency10 = Guestimate of Timing 11. Ideal execution of CRM will require unique customer-centric skillsets and experience (both in IT and in other business disciplines) Creative, Inventive CRM Thinkers (Business) People who have the ability to monetize customer database capabilities, create value for theorganization and develop ROI across all departments using customer data Data Experts (Business / IT) People who are designated (or understood to be) well-versed in what data exists, where itexists, what it means, how it was created or calculated and are seen as the go to people toresolve issues and reassure the business users Guardians and Stewards (Business / IT) People with expertise and passion with regard to protecting and managing the newly formedcorporate asset the customer database focusing on issues such as data quality, data access,compliance, data retention, privacy, security and appropriate use/access that is consistent with XYZvalues and brand promise Planning and Support Tacticians (IT) People who have prior expertise in the tactical aspects of managing, manipulating andmaintaining customer data whose foreword-thinking makes it possible to keep pace with ever-changing business demands and industry evolution 11The Anglum Group LLC 12. Agenda Executive Summary Micros: Business Requirements Marketing: Direct Mail Marketing: Email Marketing: Credit Cards Marketing: Rewards Marketing: Multi-Channel Execution Marketing: Analysis & Research Real Estate Merchandising Micros: CRM Solutions Data Architecture Data Model Point of Sale & Retail Ops Next Steps 12 The Anglum Group LLC 13. Marketing Direct Mail:Business RequirementsDescription:Direct mail marketing is designed to supplement and enhance the existing free-standing-insert (FSI) program,with a long-term goal of using direct marketing as a more effective vehicle than FSI (if proven).Key Facts: Current / Future Plans: Expectation is to send XXXK direct mail pieces Expand # of customer names to XX-YY million (2007) toin 2006ZZ million (2008) Expected response rate is X% to Y% Increase # of direct mail pieces sent to XX million (2007) Current customer information (name/address)and YY-ZZ million (2008)limits XYZ to geographic targeting today Handle data analysis and campaign design in the Marketings intent is to evolve to a far moreMarketing department; IT to manage campaigntargeted and customized DM model leveragingmanagement tool admincustomer-specific transaction information Use MicroStrategy for DM analysis and Unica for DM Future DM model will also include multiple testexecutioncells (varying offer, format, etc.) Add aggregated transaction history to customer record Direct mail vehicles will likely include postcards,(includes variables such as department-level purchases,self-mailers, and envelopespurchase recency, purchase frequency, and total spend) MicroStrategy will be used to access data for Add third-party demographic appends to customer recordanalysis and reporting (see also analytics to identify the right variables to append) (2007) Unica Affinium Campaign is used to managecampaign selection process Add additional profile data to customer record (e.g., channel preferences, style preferences, etc.) that is Future use of direct mail depends on ability to collected over time (2007)prove effectiveness Implement customer profile community site in 2007; likely Funding not currently in place, but would likely to be hosted off-site but linked to the XYZ.com websitescome from elsewhere in the marketing budget my account section13The Anglum Group LLC 14. Marketing Direct Mail:IT ImplicationsWork Effort Likely RiskMajor IT ImplicationsRequired Timing Near-Term Action StepsLevel ETL to move data in/out of DB2 and/or 2006/Q4 See Data Architecture Microcustomer hub (esp. 3rd-party data,community website) Customer data model modifications (esp. 2006/Q4 See Data Model Micro direct mail-related aggregated variables) Implement campaign management tool 2006/Q4 Install software, training, backups, support/maintenance Implement mail file creation processes2006/Q4 Create secure method to transfer data to 3rd-party mailers Support 3rd-party development of 2007/Q2 Identify integration community website, including integrationrequirements, use contentwith XYZ.com websitedeveloped by Marketing Need 1.0-2.0 FTEs to handle basic BI2007/Q1 Develop CRM staffing planadmin support Need .2 FTE to handle Unica/campaign 2006/Q4 Develop CRM staffing planmanagement support Monitor capacity of DB2 to meet SLAs for 2006/Q4 Establish SLAsMarketing campaign managementIT Requirements by Type Data Warehouse / StorageCustomer Hub (XXX) Campaign Management Data Feeds ETL Rules Business Intelligence Tools Data Model Business Rules Development eCommerce POS SystemMapping Software Other Application 14The Anglum Group LLC 15. Marketing Direct Mail:Timeline / Planning Framework 2006 20072008 2009 Q4Q1Q2Q3 Q4Q1Q2 Q3 Q4 Q1Q2 Q3 Q4Data Feeds (DB2 & Customer Hub)Data Feeds Data Feeds Data FeedsData Feeds Data FeedsData Model Mods Data Model Mods Data Model Mods Data Model ModsCampaign Management tool implementationMail File Creation Community Integration with Website Dev.XYZ.comEstablishMonitor capability of DB2 to meetDB2 SLAsSLAs= Planned = Key = Firm Estimate of Timing= Recommended Dependency15= Guestimate of Timing 16. Marketing E-Mail:Business RequirementsDescription:Email marketing is a multi-channel strategy used to increase sales by (1) driving customers to the XYZ.com website, and(2) driving people in-store; CRM will enable greater capture of email addresses and improved targeting.Key Facts:Current / Future Plans: Less than XX million email addresses (not all Increase # of available email address to XX million (2007)active or good)and YY million (2008) About XXXK addresses are mailed today (about Capture email addresses at POS (likely on the secondZZ% of available addresses customer visit); expectation is emails will be captured for Email response rate averages .X%; email costsXX% of total customer names (2007)are 25X to 50X less than direct mail Use DB2 analytical database as source of truth for email Emails follow the XYZ promotional calendar,addresses, and use VVV as operational source (forwith X promos per season (XX--YY per year) execution (2007) Email addresses are primarily captured via the Improve coupon redemption reporting, including datewebsite todayparameters, also infer which customers are redeeming (by VVV is used for marketing email deployment;mapping redemption dates with transaction dates)VVV handles campaign setup; email database Develop ability to use POS system to confirm that couponsmanagement; opt-in/opt-out; performance stats; havent expired, also to prevent coupon stackingand other services; XYZ handles campaign Explore ability to capture customer-specific email couponparameters (queries and list selections) redemptions (2008?) Current email coupon redemption reporting islimited (# of coupons redeemed, total salesassociated with redeemed coupons, totalmarkdowns) No system-driven enforcement of couponexpiration dates 16 The Anglum Group LLC 17. Marketing E-Mail:IT ImplicationsWork EffortLikely RiskMajor IT ImplicationsRequiredTimingNear-Term Action Steps Level Enable POS and Customer Hub to2007/Q2 Determine capacity / ability to captureefficiently capture email addressesemail addresses Update customer data model to hold2007/Q2 Identify data fields email address information Conduct ongoing email address 2007/Q2-3 Implement a process to perform maintenanceaddress hygiene on email addresses Migrate email address tables from VVV 2007/Q3 See Data Model micro to customer data model as singlesource of truth Enable data feeds to/from VVV and 2007/Q3 Build ETL processesDB2 for email addresses (when DB2becomes source of truth Enable capture of coupon redemption 2007Q3 Identify scope of work date @individual customer level Enable ability to capture redemptions 2008/Q2 Identify scope of work of individual customer bar codedcoupons at POSIT Requirements by Type Data Warehouse / Storage Customer Hub (XXX) Campaign Management Data Feeds ETL RulesBusiness Intelligence Tools Data Model Business Rules Development eCommerce POS System Mapping Software Other Application17The Anglum Group LLC 18. Marketing E-Mail:Timeline / Planning Framework2006200720082009Q4 Q1Q2Q3Q4 Q1Q2Q3Q4Q1 Q2Q3 Q4Update POS and Customer Hub for email captureUpdate customer data model for email dataMigrate email address tables from VVV Data feeds to/from Cheetah and DB2 Data FeedsData FeedsConduct ongoing email address maintenanceEnable capture of coupon redemption date Enable ability to capture redemptions of individual bar coded coupons= Planned = Key= Firm Estimate of Timing= Recommended Dependency18= Guestimate of Timing 19. Marketing Credit Card:Business RequirementsDescription:Co-branded XYZ credit card to be used to drive sales and gain additional insights into XYZ customer behavior.Key Facts:Current / Future Plans: XYZ is currently identifying a bank partner for a Begin credit card implementation readiness, including in-co-branded card with XYZ name store acquisition process, capture of application at POS, Bank partner selection is expected in October ability to accept new card type, and development of2006supporting marketing materials (2007 Q1) Bank partner would handle all credit-related Launch credit card pilot in May 2007processing, including card issuance, customer Identify rewards layer of credit card offering (to encouragestatements, customer service, and collections sign up and utilization) Customer would be offered an incentive for card Identify XYZ approach / policy for using credit cardactivation (e.g., save $5)personally identifiable information from XYZ credit card Customer-specific data will be transferred from magnetic stripebank partner and added to XYZ customer Expand credit card rollout (2007 Q3)database Extend call center role to handle co-branded credit card XYZ will also leverage customer behavioroutbound calling (2008?)information where applicable 19The Anglum Group LLC 20. Marketing Credit Card:IT Implications Work EffortLikelyRiskMajor IT Implications RequiredTimingNear-Term Action StepsLevel Develop POS process to collect 2007/Q1 Verify address verification process;customer applications and renderdata security in store; verifynear real-time credit decisions communications links Enable POS to accept a new card 2007/Q1 Verify compatibility with modules and typestress test Enable data feeds of customer 2007/Q1 Identify what information to collect from records from credit card issuer credit card issuer; set up ETLprocesses; identify fair/legal data use;data model changes; enhance securityof data transmission Enable matching of credit card 2007/Q2 Understand legal, FCRA, SOX, andcustomer records with existingissuing bank rules/regulationscustomer records Support pilot launch and ensure timely 2007/Q2 Stress test and ensure data data transfer between POS, customer security/privacyhub, and issuing bankIT Requirements by Type Data Warehouse / Storage Customer Hub (XXX)Campaign Management Data Feeds ETL Rules Business Intelligence Tools Data Model Business Rules DevelopmenteCommerce POS SystemMapping SoftwareOther Application 20 The Anglum Group LLC 21. Marketing Credit Card:Timeline / Planning Framework20062007 2008 2009Q4Q1 Q2 Q3Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 Q4 Develop POS process to collect customer applications and provide credit decisions Enable POS to accept a new card type Enable data feeds of customer records from credit card issuer Enable matching of credit card customer records to XYZ records Support Pilot launch and data transfers between POS, Customer Hub and issuing bankData feeds to/from POS, Customer Hub, and issuing bank Data Feeds = Planned = Key = Firm Estimate of Timing = Recommended Dependency21= Guestimate of Timing 22. Marketing Rewards Program:Business RequirementsDescription:Rewards or loyalty program that provides XYZ customers with a compelling value proposition to identifythemselves at point-of-sale or at XYZ.comKey Facts:Current / Future Plans: Prior rewards program (XYZ Points) tested in Identify potential rewards program alternatives20XX-20ZZ was not successful and was Evaluate alternatives, including mechanics, brand fit,terminated due to insufficient sales lift rough economics, exit strategy, and pilot strategy Marketing has identified the need to provide a Build high-level blue print, including key processes, high-compelling customer value proposition tolevel technology requirements, delivery process, andencourage self-identification and engagementcommunications components Marketing is currently beginning to explore Develop a budget and payback analysisalternative rewards program approaches Secure corporate commitment Marketing anticipates launching a pilot in late Develop specific program execution strategy, supporting2007infrastructure, creative, and other details Any rewards program needs to sync with XYZ Launch pilot in 20XX (Q4) or 20ZZ (Q1)credit card customer offer(s) 22The Anglum Group LLC 23. Marketing Rewards Program:IT ImplicationsNote: The IT implications for a Rewards Program will be very dependent on the actualprogram design, but the following outlines some likely high-level needs.Work EffortLikely RiskMajor IT ImplicationsRequiredTimingNear-Term Action Steps Level Develop infrastructure that will handle 2007/Q1 Identify scope of work; determinerewards program accounting (e.g.,whether to use internal systems or 3rd-point or credit accruals, rewardsparties to supportissuance, etc.) Determine (and code in data model) 2007/Q2 Include as part of rewards program business rules for definingdesigntransactions, including handling ofreturns Modify customer data model to 2007/Q2-3 See Data Model micro support program-specific data needs Enable POS to handle reward 2007/Q3-4 Identify scope of work (hardware,program requirements, includingprocesses)testingIT Requirements by Type Data Warehouse / Storage Customer Hub (XXX) Campaign Management Data Feeds ETL Rules Business Intelligence Tools Data Model Business Rules Development eCommerce POS System Mapping Software Other Application23The Anglum Group LLC 24. Marketing Rewards Program: Timeline / Planning Framework20062007 2008 2009Q4Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q2 Q3 Q4 Develop infrastructure that will handle rewards program accountingDevelop (and code in data model) business rules for defining transactionsModify data model to support program-specific data needsEnable matching of credit card customer records to XYZ records Launch Rewards Program = Planned= Key= Firm Estimate of Timing = RecommendedDependency 24= Guestimate of Timing 25. Marketing Multi-Channel Execution:Business RequirementsDescription:Ability for XYZ and its customers to interact seamlessly across in-store and online channels, with full visibility toinventory availability whether in-store or online, and the ability to easily exchange merchandise in either channel.Key Facts: Current / Future Plans: XYZ doesnt currently enable cross-channel Develop the Product Information Database (PID) toshoppingsupplement / replace the Lot Master Customers can shop online and have the Develop business case for near real-time inventoryproduct shipped to a storereporting capabilities (e.g., ability to properly allocate Customers can buy online and return product toproduct and identify replenishment levels, ability to de-riska store the shopping trip for customers, ability to push emails Customers cant go online to confirm that a based on in-store inventory levels)particular style (and size) is available in the Enable near real-time inventory reporting capabilitiesinventory of a nearby store; Famous Footwear Modify eCommerce website to show local store inventorycustomers can do this availability Customers cant shop in-store and have theproduct shipped from the eCommerce inventory One of the limiting factors is the Lot Master,which doesnt track individual styles and sizeswith the granularity necessary for managinginventory across channels25 The Anglum Group LLC 26. Marketing Multi-Channel Execution:IT ImplicationsWork EffortLikelyRiskMajor IT ImplicationsRequiredTimingNear-Term Action StepsLevel Develop the Product Information 2007/Q1-4 Needs corporate approval to proceed Database (PID) Enable near real-time visibility to 2008/Q2 Identify scope of workstore-level inventory Integrate PID and real-time inventory 2008/Q4 Identify scope of workview to eCommerce website (toenable online lookup of available in-store inventory) Integrate PID and real-time inventory 2009/Q2 Identify scope of workview to POS system (to enableordering of eCommerce inventory bystore associates)IT Requirements by Type Data Warehouse / Storage Customer Hub (XXX)Campaign Management Data Feeds ETL Rules Business Intelligence ToolsData ModelBusiness Rules Development eCommerce POS SystemMapping Software Other Application26 The Anglum Group LLC 27. Marketing Multi-Channel Execution: Timeline / Planning Framework20062007 20082009Q4Q1Q2Q3 Q4Q1 Q2Q3Q4 Q1Q2Q3Q4 Develop the Product Information Database (PID)Enable near real-time visibility to store-level inventory Integrate PID and real-time inventory view to eCommerce website Integrate PID and real-time inventory view to POS system= Planned= Key= Firm Estimate of Timing= RecommendedDependency27 = Guestimate of Timing 28. Marketing Analysis & Research:Business RequirementsDescription:Analysis & research involves using the customer database for research project recruitment, leveraging customer-specificprofile and transaction history to gain deeper insights into customers, and measuring CRM results. Customer insightsare leveraged for marketing, merchandising, buying, and real estate site selection (among others).Key Facts:Current / Future Plans: Currently Marketing uses primary research Use customer database to recruit respondents for primaryvehicles (e.g., A&U studies) and CSAT data forresearch (to avoid expensive recruiting costs)customer analysis and research Identify customer segments / clusters using customer Finance supports Marketing with ROI analysisprofile and transaction history, and apply to Real Estate,and direct response analysis (including NPV,Merchandising, Marketing, Media Buys, FSI Distribution,potential program scenarios, investment etc.analysis, market test, radio test, and store Understand market/store trading area demand usingconcept design test analyses) customer transaction history Leverage customer-specific data to evaluate CRMsuccess, including metrics such as size/growth ofdatabase, ratio of incremental sales to names mailed,return on direct expense, segment/customer lifetime value Develop predictive models to identify which specificdemographic / psychographic variables need to bepurchased (to support Marketing and Real Estate) Utilize internal campaign analyst (on Marketing team) forbasic analytics (queries, some modeling) Utilize Finance team to help estimate campaignprofitability, also measure results; will likely require morethan one Finance analyst when direct marketing scales Utilize third-party analytic shops to handle morecomplicated analysis 28 The Anglum Group LLC 29. Marketing Analysis & Research: IT ImplicationsWork EffortLikely RiskMajor IT ImplicationsRequiredTimingNear-Term Action Steps Level Pull customer database extracts to2007/Q1+ Identify typical extracts and build into support customer analysis andwork / staffing requirementsresearch Data model modifications to 2007/Q1 See Data Model micro incorporate CRM metrics, third-partydemographic data Enable Finance analysis of direct 2007/Q1-2 Develop more automated approach to marketing program (pre/post) at scaleextracting relevant data from DB2 and populating reports Embed identified customer segments /2007/Q4 Optimize Real Estate site selectionclusters into multiple applicationsprocess and infrastructure Determine Merchandising approach using customer clusters and implementIT Requirements by Type Data Warehouse / Storage Customer Hub (XXX) Campaign Management Data Feeds ETL Rules Business Intelligence Tools Data Model Business Rules Development eCommercePOS SystemMapping Software Other Application29The Anglum Group LLC 30. Marketing Analysis & Research: Timeline / Planning Framework2006 20072008 2009Q4Q1Q2 Q3 Q4 Q1 Q2Q3 Q4 Q1Q2 Q3 Q4 Identify typical customer data extracts Customer data extractsData Extracts Enable scaled & automated Finance analysis of marketing programs Embed customer segments/clusters into multiple applications= Planned= Key = Firm Estimate of Timing= RecommendedDependency30= Guestimate of Timing 31. Real Estate:Business RequirementsDescription:Real Estate focuses on new store site selection and existing store closings, and is expected to use the customer-specific profile and transaction data to optimize its site selection processes.Key Facts: Current / Future Plans: Primary goal is to identify high potential sites Use customer-specific data to support site selection (20XXand optimize the store mix Q2?) Data used include store-level transaction data, Incorporate mapping tools that graphically display dataPrizm cluster data, and some customer data (e.g., customer density in a trading area) (20XX?)from CSAT research (with demo/psychographic Incorporate analytical models that estimate customer valuedata overlays) based on purchase history (20XX Q4?) Analytical models used include (a) new store Develop the ability to click on a specific map location andsales forecasting model (Nexus); (b) transferautomatically calculate predicted store sales and transfersales forecasting model and distance decay sales impact (20XX?)model to estimate cannibalization of nearby Locate Real Estate software tools / data in centralexisting stores and the positive impact of store database with web browser access and wireless dataclosings; and total market analysis to optimizecards (20XX?)store locations and # of stores Currently evaluating a new third-party tool thatwill leverage customer-specific data Real Estate team members currently usesoftware / data installed on individual PCs forsite selection analysis31 The Anglum Group LLC 32. Real Estate:IT Implications Work EffortLikely RiskMajor IT Implications RequiredTimingNear-Term Action Steps Level Implement 3rd-party tool to analyze2007/Q2 Finalize vendor selection, definecustomer-specific data within trading requirements, implement software, trainareas users Integrate current mapping tool (used 2007/Q2-3 Confirm license rights, implementby Marketing) into RE environment software, train users Enable data sharing of store trading 2007/Q3 Establish process for store trading area area profile information (to be used by profiling, provide information to users,RE, Marketing, and potentiallyupgrade regularlyMerchandising) Create central repository for RE tools / 2008/Q1-3 Define data architecture requirements, datadefine business requirements, integratesoftware, train users Enable secure virtual access via web 2008/Q3 Purchase wireless data cards by DROs and RE managersIT Requirements by Type Data Warehouse / StorageCustomer Hub (XXX) Campaign ManagementData Feeds ETL Rules Business Intelligence ToolsData Model Business Rules Development eCommercePOS System Mapping Software Other Application 32The Anglum Group LLC 33. Real Estate:Timeline / Planning Framework20062007 20082009Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1 Q2 Q3 Q4Implement 3rd-party tool to analyze customer-specific trading area dataIntegrate current mapping tool Enable data sharing of store trading area profile informationCreate central repository for Real Estate tools & dataEnable secure virtual access via web to RE central repository = Planned= Key = Firm Estimate of Timing = RecommendedDependency 33 = Guestimate of Timing 34. Merchandising:Business RequirementsDescription:Determining product mix in-store, including depth and breadth of assortment, price / markdown optimization,inventory replenishment, and size management.Key Facts:Current / Future Plans: Merchandising leverages a number of analysis One near-term priority is to use customer insight to groupand planning tools, including tools for case pack(cluster) stores, which will benefit most merchandisingoptimization, price execution, size management applications (esp. assortment planning); goal is to assortby store, markdown optimization, promotion individual stores based on their specific customer basetracker, and store-level inventory management, Assortment planning driven by customer-level data isetc. another priority, and is perceived to drive a lot of future XYZ cycles XX% of its lots annually; withvalue by assisting in the ability to assort at the individualseasonality and fashion trends, this complicates store levelthe ability to assort Customer-level transaction data will also help drive size One of the largest potential benefits of CRM is itsinventory decisions (especially by learning the extent thatapplication to assortment plansa customer or customers may size up or down) Assortment planning is currently driven by store Customer-level data will also improve the effectiveness ofclusters, store volume, and other historical datathe PromoTracker tool (measuring impact of putting a Lot Clustering currently is a mixed bag, withon a particular promotional vehicle) vs. the currentclusters defined by ethnicity, geography, andambiguity because of existing product aggregationschannel Other wish list items include individual store-level A new Assortment Planning tool is beingcustomer reporting (who is buying, not just what is beingimplemented; it uses a dedicated data mart and bought), tracking at the linear foot level, profitability byi2 softwarefixture, etc. PromoTracker is used today for a lot of the One key enabler is to put (customer) data into a centralmerchandising analysis, and is housed in anrepository in a format suitable for analysisACCESS database; MicroStrategy is also usedfor merchandising analysis 34 The Anglum Group LLC 35. Merchandising:IT Implications Work Effort LikelyRiskMajor IT Implications Required TimingNear-Term Action StepsLevel Optimize current Assortment 2006/Q4 Identify what is required to reduce wait Planning tool to increase analytical time between analysis requestsprocessing speed Apply new customer clusters /2007/Q1 See Marketing: Analysis & Researchsegments into existing merchandisingapplications 2007/Q3-4 Identify scope of work Revise merchandising tools (e.g.,Assortment Planner) to leveragecustomer-level transaction data 2008 Identify scope of work Additional integration of customer-level transaction data -- TBDIT Requirements by Type Data Warehouse / StorageCustomer Hub (XXX) Campaign Management Data Feeds ETL Rules Business Intelligence Tools Data Model Business Rules Development eCommercePOS System Mapping Software Other Application ___i2___35 The Anglum Group LLC 36. Merchandising:Timeline / Planning Framework2006200720082009Q4Q1 Q2 Q3 Q4Q1Q2Q3 Q4Q1Q2 Q3 Q4Optimize current Assortment Planning tool Apply new customer clusters into existing merchandising applicationsRevise merchandising tools to leverage customer-level transaction data = Planned= Key = Firm Estimate of Timing = RecommendedDependency36 = Guestimate of Timing 37. Agenda Executive Summary Micros: Business Requirements Marketing: Direct Mail Marketing: Email Marketing: Credit Cards Marketing: Rewards Marketing: Analysis & Research Marketing: Multi-Channel Execution Real Estate Merchandising Micros: CRM Solutions Data Architecture Data Model Point of Sale & Retail Ops Next Steps 37 The Anglum Group LLC 38. Data Architecture:Business RequirementsDescription:The manner in which data is stored, managed, and used in a system; establishing common guidelines for dataoperations that make it possible to predict, model, gauge, and control the flow of data in the system.Key Facts: Current / Future Plans: Customer data is captured and stored in the XXX customer operational database will be the singlecustomer operational database housed on aversion of the truth and be augmented with external dataMySQL server in the XYZ environment Operational database will be linked to POS and will feed Enrichment provider updates individual records customer data to the data warehousewith name/address, provides NCOA and other Plan to extend the existing data warehouse in DB2 toaddress hygiene services integrate customer and transaction level data CSAT data is housed in the operational database Expect to have XX million phone numbers and ZZ million Existing data warehouse maintained in a DB2unique customers by the end of 2006 in the CDWmainframe environment and does not include Plan to store granular level data (sku/store/day) ANDcustomer level dataoperate marketing and merchandising support applications Data warehouse is configured for analyticalin DB2 environmentprocessing (OLAP) and not structured to support Replacing COBOL data integration process with the ETLtransaction-oriented applications (OLTP) tool from TIBCO Sales Audit system supplies transaction data Unicas campaign management tool to be implemented in DB2 selected as platform for customer data the data warehouse by external vendorwarehouse (after analyzing several alternatives) MicroStrategy DSS to be used as analytical tool for Business has worry for "pipes" to move datamarketing as well as merchandisingamong systems Future data sources include e-commerce, data appends, Marketing has concerns about DB2 ability to meet call center data and promotion/response historytheir needs but has deferred to IT expertise38The Anglum Group LLC 39. Data Architecture: IT Implications Work Effort Likely RiskMajor IT Implications Required TimingNear-Term Action Steps Level Build data warehouse for customer data 2006/Q4 Develop logical and physical models Enrichment process with Harte-Hanks2006/Q4 Build process to update customer hub Feed customer/transaction data to DW 2006/Q4 Create data model, ETL process, business rules Optimize and tune DB2 data warehouse 2007/Q1 Performance tuning based on SLAs Implement ETL tool process (ETL) 2007/Q2 Licensing and contract negotiations Implement campaign management tool 2007/Q1 Install, requirements, create dimensional data Extend MicroStrategy DSS capability2007/Q2 Create dimensional data/metrics; system tuning Integrate new sources of customer data 2007/Q2 Requirements, business rules, mapping, metrics Implement data stewardship process 2006/Q4 Data access, quality, retention privacy standards Rollout new XXX system for POS 2007/Q3 Understand / resolve performance issuesIT Requirements by Type Data Warehouse / Storage Customer Hub (XXX) Campaign Management Data Feeds ETL Rules Business Intelligence Tools Data Model Business Rules Development eCommerce POS SystemMapping Software Other Application39The Anglum Group LLC 40. Data Architecture:Timeline / Planning Framework2006 2007 20082009Q4Q1Q2 Q3Q4 Q1Q2 Q3Q4 Q1 Q2Q3 Q4Enrichment processNCOANCOA NCOANCOA NCOA NCOA NCOANCOA NCOANCOA NCOABuild initial customer data Revise and extend customer data warehousewarehouseFeed customer andIntegrate new sources of customer datatransaction data to DW Optimize and tune DB2 data warehouseImplement Unica Extend campaign management tool Implement ETL tool Extend MicroStrategy DSS capabilityImplement data stewardship process = Planned = Key= Firm Estimate of Timing = Recommended Dependency40 = Guestimate of Timing 41. Data Architecture: Issues and ConcernsISSUE / CONCERNPOINT OF VIEW / BEST PRACTICE1. Mainframe environment may not be suited Most large retail customer database are managed in for managing analytics customer databasea server environment1. Marketing analytics are resource-intensive, Data mart may be needed to support analytical requiring distributed processingneeds and provide needed response1. Marketing and merchandising may require Separate data marts are often created to support different data rollupsdistinct subject areas1. Initial infrastructure design / development Need to identify / support broader and growing business represents very basic CRM capabilitiesneeds (i.e., with focused help of Business Analyst)1. Quarterly NCOA processing will identify Create extensive and complex process to merge customers who have moved, resulting induplicate records into one record duplicate records1. Creation of personally identifiable data (PII)Data stewardship process is needed to mitigate risk creates a risk management issue and protect value asset(continued)41The Anglum Group LLC 42. Data Architecture: Issues and Concerns (continued) ISSUE / CONCERNPOINT OF VIEW / BEST PRACTICE1. Customer-facing applications demand aAnticipating and solving customer-facing problems higher level of accuracy and requires high-level management involvement, issue responsiveness resolution processes, defined SLAs, and robustinfrastructure1. Management of persistent key is an Need to define XYZ point-of-view on persistent key essential component of customer data methodology and ensure execution follows the management methodology (vs. delegating to 3rd-party resource)1. The need to demonstrate accuracy ofData audit / validation process needs to be created customer data to business users will to identify issues proactively; IT needs to designate increase as the use of CRM increases ina data expert the organization 42The Anglum Group LLC 43. Data Model:Business RequirementsDescription:The Data Model includes how data are represented in the CRM database management system includingstructure, integrity, manipulation and querying.Key Facts:Current / Future Plans: Campaign management process is driving data Install, customize and implement campaign managementrequirements for Phase I tool (Unica Affinium Campaign) Scope includes basic Recency, Frequency, Develop business rules to support data requirementsMonetary (RFM) values along with store and lot Create ETL process to integrate foundation data tomaster datasupport basic campaign management CRM will never be "done", therefore customer Develop campaign management templates to stream-linedata models will be revised on an iterative basisdevelopment process of future, advanced campaigns Currently under consideration is whether PSS Integrate promotion and response datashould use the data warehouse to run analytics Integrate external data to support business analytics andor create a dedicated campaign managementadvanced campaign managementdata mart Develop analytic metrics, derived data and aggregated Campaign/response subject areas are not in data to support business requirementsscope for Phase 1, nor is granular level data Write a set of e-commerce requirements to aid XYZ in their E-commerce data is out of scope for Phase 1 interaction with Accenture Hardware has been purchased to support a Integrate e-commerce, data appends, call center andstrategy to not require massive denormalizationpromotion/response history into the customer dataor aggregation warehouse Support for email marketing is out of scope for Define data and business requirements for Real Estate,Phase 1Merchandising, Store Operations and Call Center Data and business requirements for RealEstate, Merchandising, Store Operations andCall Center not well defined43The Anglum Group LLC 44. Data Model: IT ImplicationsWork Effort Likely RiskMajor IT ImplicationsRequired TimingNear-Term Action Steps Level Campaign management tool 2006/Q4 Map campaigns/Affinium Campaign to implementationdata model and install software Creation of business rules to support 2006/Q4 Meet with users to gain consensus on data requirements business rules ETL process to support basic campaign 2006/Q4 Create ETL environment, install software managementor develop COBOL programs Support initial basic proof-of-concept 2006/Q4 Create re-useable campaign templates customer campaignsin Affinium Campaign Integration of promotion/response data 2007/Q2 Define data and business requirements Integration of external data to support 2007/Q2 Gather business requirements; review business analytics and advanced available data sources; analyzecampaign management Accenture e-commerce system and data Support business analytics, reporting 2007/Q2 Document business requirements;and ad-hoc queriesdevelop analytic metrics, create deriveddata and aggregated dataIT Requirements by Type Data Warehouse / Storage Customer Hub (XXX) Campaign Management Data Feeds ETL Rules Business Intelligence Tools Data Model Business Rules Development eCommerce POS System Mapping Software Other Application 44The Anglum Group LLC 45. Data Model:Timeline / Planning Framework2006 2007 2008 2009Q4 Q1 Q2Q3Q4 Q1Q2 Q3Q4 Q1 Q2Q3 Q4Creation of business rules tosupport data requirementsUnica software installationCreate ETL environment; develop ETL process Create campaign management templatesIntegration of promotion and response dataIntegration of external data to support business analytics and advanced campaign managementSupport business analytics, reporting and ad-hoc query requestsWrite e-commerce requirements to understand Accenture e-commerce Design data and business requirements for Real Estate, Merchandising, Store Operations, Call Center= Planned = Key= Firm Estimate of Timing= Recommended Dependency45 = Guestimate of Timing 46. Data Model: Issues and ConcernsISSUE / CONCERN POINT OF VIEW / BEST PRACTICE1. Customers and/or households may move Detailed worksession with XYZ and enrichment over timepartner needed to review scenarios and craftsolution1. Data mart may be needed to support Industry best practice is to create a separate data analytical needs mart to deliver response time1. Marketing and merchandising may requireData requirements are different for each subject different data rollups area and need to be supported accordingly1. Creation of meta data and a data dictionaryDocumentation at a technical and business user is vitally important level is needed, especially because CRM is new forXYZ1. The need for subject matter expertise in IT needs to set up policies and procedures to overall data stewardship, training, security,establish credibility and earn the right to be the and privacy is needed; currently XYZ iskeeper of the one version of the truth very reliant on enrichment provider1. Business is concerned with overall dataProactively create an audit process the proves data quality and data integrity integrity(continued) 46The Anglum Group LLC 47. Data Model: Issues and Concerns (continued)ISSUE / CONCERN POINT OF VIEW / BEST PRACTICE1. Rules for handling customer preferencesCurrent industry best practice is to maintain (e.g., opt-in / opt-out) arent fully definedcustomer preferences by channel; other rules needto be developed for preference management1. Significant customer-centric expertise doesNeed to establish expertise in each functional area not exist in Real Estate, Retail Ops, Call to maximize usage of CRM and prioritize requests in Center or Merchandising departmentsorder to realize ROI1. Access to phone number append data fromLicensing and housing data internally enhances enrichment providercapability and will drive down cost 47The Anglum Group LLC 48. Point of Sale & Retail Ops:Business RequirementsDescription:Executing CRM at retail, including leveraging the point-of-sale system to capture key customer information ANDproviding summary information about customers back to the store-level associates to improve customerinteractions and engagement.Key Facts:Current / Future Plans: XYZ move from its current ABC POS system to Convert all stores from XXX to YYY by the end of 2007a more sophisticated capability is partially Solve current problem of slow data transfer (for capturingcomplete with 9999 stores converted (XX% of customer phone numbers and validating customer ID)sales volume) XXX will be leveraged for more complex CRM applications ABC is a critical enabler of CRM because it in the future, including communicating a richer set ofallows a persistent connection to a supportinginformation to the store associate (e.g., which segment acorporate customer name databasecustomer belongs to, customer purchase history summary, The Customer Hub supports CRM data at POS etc.) The first POS initiative is to enable capture of XXX will also be used in the future to capture customercustomer phone number and (wherepreference information (useful to direct marketing)appropriate) return a customer name XYZ is experiencing challenges in timelyexchange of information (up to 25 seconddelay), and has delayed the CRM phone numbercapture rollout until this is resolved CRM also leverages the SMILES program,which is a training initiative designed to improvecustomer engagement at store level 48 The Anglum Group LLC 49. Point of Sale & Retail Ops:IT ImplicationsWork Effort LikelyRiskMajor IT ImplicationsRequired Timing Near-Term Action Steps Level Identify root cause of slow data2006/Q4 Identify root cause, fix, and continue transfer to capture customer phone rollout of customer phone numbernumber and confirm customer ID capture Pilot XXX ability to handle more 2007/Q2 Design stress test of system complicated data transfer (to supportmore complex CRM in-storeinteractions) Finish conversion of YYY stores to 2007/Q4 Continue ongoing conversionXXXIT Requirements by TypeData Warehouse / Storage Customer Hub (XXX)Campaign ManagementData FeedsETL Rules Business Intelligence ToolsData ModelBusiness Rules DevelopmenteCommerce POS System Mapping SoftwareOther Application49The Anglum Group LLC 50. Point of Sale & Retail Ops:Timeline / Planning Framework2006 20072008 2009 Q4 Q1Q2Q3Q4 Q1Q2 Q3 Q4 Q1Q2 Q3 Q4Identify root cause of slow data transfer to capture customer phone number and confirm customer IDPilot XXX ability to handle more complicated data transferFinish conversion of YYY stores to XXX= Planned= Key = Firm Estimate of Timing= RecommendedDependency50= Guestimate of Timing 51. Agenda Executive Summary Micros: Business Requirements Marketing: Direct Mail Marketing: Email Marketing: Credit Cards Marketing: Rewards Marketing: Multi-Channel Execution Marketing: Analysis & Research Real Estate Merchandising Micros: CRM Solutions Data Architecture Data Model Point of Sale & Retail Ops Next Steps 51 The Anglum Group LLC 52. Next Steps Confirm timing and priority of business requirements Conduct additional planning to define scope of work required where needed Specifically this includes: Ability to capture email address at POS Ability to capture individual customer coupon redemption date Ability to handle customer bar coded coupons POS process to collected customer credit card applications and render near-real-time credit decisions POS ability to process new credit card type Data transfers to support credit card launch, ongoing execution Rewards Program accounting infrastructure Ability to handle Reward Program requirements at POS Near real-time visibility to store-level inventory Integration of PID and real-time inventory to eCommerce website and POS Merchandising initiatives Revise IT support plans as needed based on revised timing, priority ofrequirements, and defined scope of work Identify executional taskforces for near-term high priority initiatives Point-of-Sale -- Ability to Handle Complex Data Capture & Transfers Customer Data Model Modifications to Support Direct Marketing, Other Business Initiatives Credit Card Preparation and Launch Rewards Program Strategy Design, Preparation, and Launch Multi-Channel Execution -- Inventory Visibility Across Channels Direct Marketing -- Program Analysis Real Estate Incorporation of Customer Data and Creation of Central Tools/Data Repository Merchandising Incorporation of Customer Data Define CRM decision making model and processes52 The Anglum Group LLC 53. How We Can Help Tactically in the Near Term Persistent Key Process Review persistent key process and logic with Harte Hanks Data Stewardship Review existing data stewardship and recommend policiesand procedures Data Audit and Validation Identify checks and balances in data process to ensureaccuracy and quality of the data Merge Rules and Planning tactical approach for merging duplicate recordsHouseholding Rules Reporting Requirements Develop comprehensive set of requirements that can translateinto report design to measure overall CRM effectiveness, directmarketing effectiveness, CRM system performance, etc. eCommerce Develop documentation of Accenture eCommerceDocumentation capabilities, policies, and data management53The Anglum Group LLC