SAS and Action-Oriented Business Processes: Alliances, Partnerships, and Acquisitions

SAS and Action-Oriented Business Processes: Alliances, Partnerships, and Acquisitions

Being a technology leader today does not ensure longevity. Companies must continually reinvent themselves in a way that meets the needs of a rapidly changing market, yet reinvention must be balanced, incorporating the relevant aspects of a company that secured its top position in the first place. SAS Institute delivers business analytics solutions, but has been expanding its presence in certain verticals, and has been making a series of well-thought out acquisitions to sustain its technology leadership.

Part two of the SAS: Striving to Sustain Leadership series.

Leveraging its early 2000's acquisitions like Intrinsic's campaign management and Verbind's interaction management solution, SAS has become a notable marketing automation (MA) player rather than a business intelligence (BI) platform provider per se—other BI pure competitors, except possibly for NCR's Teradata division, will have a time of repeating SAS' feat. SAS and Teradata are be prime examples of technology providers that have initially had a long focus on very scalable BI and datawarehousing (DW) deployments (see SAS Institute Shoots for the Two-Stop-Shop with new Release of Warehouse Administrator and SAS Puts the "E" in "Data"). They have been evolving into true business applications players for some time now by being able to combine their deep analytics and BI solution functionality with certain enterprise applications areas, as seen in the case of MA. This will remain a key feat for these BI vendors as they expand their scope into more action-oriented business processes instead of limiting them to conceptual BI roles. In particular, SAS became a marginal player in the CRM and MA market with its acquisition of Intrinsic in 2001, and the release of SAS Marketing Automation 4 in 2004 gave it some sales traction and market visibility in the space.

To brush up on our knowledge, marketing automation (MA) involves analyzing and automating the marketing process, which includes a proactive strategy for using information and IT in marketing. The ultimate goal is to properly allocating marketing resources to the activities, channels, and media with the best potential return and impact on profitable customer relationships. The new metrics of customer profitability, lifetime value, and wallet share are needed to supplement the traditional metrics of market share and penetration. Typical functional components of MA include customer data cleansing and analysis tools, and campaign management systems.

SAS has been able to tackle the market owing to its protracted expertise in predictive analytics, which includes all analytics, both tools and packaged applications, that are more complex in their mathematics than core analytics. Core analytics are those used to define or analyze a current or past state, consisting of both tools and packaged applications that compute frequencies, cross-tabs, query and reporting cubes. Predictive analytics are better capable of determining the probable future outcome of an event, among other uses. For example, one can benefit from the ability to execute marketing campaigns, but it is much more beneficial to be able to identify segments within a customer base where subscriptions will likely be cancelled and the customer possibly goes to the competitor. It is thus more effective to have that predictive capability, and then build a campaign to go after those potentially lost accounts.

APICS Dictionary defines customer relationship management (CRM) as a marketing philosophy based on putting the customer first. In contrast to enterprise resources planning (ERP) back-office information, CRM emphasizes the collection and analyses of information designed for sales and marketing decision support to understand and support existing and potential customer needs, including account management, catalog and order entry, payment processing, credits and adjustments, and other functions.

Leading analysts concur that CRM is a business strategy designed to optimize profitability, revenue and customer satisfaction by organizing the enterprise around customer segments, fostering customer-centric behavior and implementing customer-centric processes. But, the major commercial CRM software application areas include sales force automation (SFA), customer service and support (CSS), call centers, and marketing automation (MA). CRM entails all aspects of interaction a company has with its customer, whether it be sales, marketing or service related. Computerization has also changed the way companies are approaching t