MCI Builds Customer Relationships with MPP
It's the essential paradox of mass marketing today: How do large companies
make each of their millions of customers feel as if the company knows and
treats them as individuals? How do they determine what products and services
to offer to which customers?
MCI Corp., the Washington, DC-based telecommunications firm, found the answers
to those and other questions in a large-scale sales and marketing data warehouse
system. Called warehouseMCI, the system combines very large database (VLDB)
and massively parallel processing (MPP) technologies to produce one of the
largest commercial data warehouse systems in existence today, storing more
than six terabytes (TB) of information on more than 20 million MCI customers.
More importantly, warehouseMCI is also the basis for virtually all of MCI's
marketing and sales activities. "We are using the warehouse to build
relationships with our customers and to understand what services people
want," says Ryan Souza, senior manager for warehouseMCI at the company's
information technology facilities in Colorado Springs, CO. "The trend
today is to move from mass marketing to relationship marketing. We needed
a cost-effective way to provide individual service to a mass market."
That challenge is further complicated by the firm's rapid growth and expansion
of services over the past few years. With nearly $5 billion in sales last
year, MCI was one of the first to provide an alternative long-distance telephone
service to AT&T. As the company has grown, so have the kinds of telecommunications
services it provides. Today, the company also provides cellular phone, electronic
mail, Internet access and more. "How do I understand 20 million customers
and what they want? How do I know what they need?" Souza asks.
MCI stumbled on its data warehouse system almost by accident. In September
1993, the Colorado Springs sales and marketing organization undertook a
complete reengineering of the IT systems that support the group's business
activities. The telecommunications market was changing rapidly, with deregulation,
more open competition and many new services, including cellular and paging.
MCI knew it had to change with the times. "We had decided back then
that we needed to change from a product-driven marketing strategy to a customer-driven
marketing strategy," says Souza.
After some study of the sales and marketing group's needs, the IS group
determined three core competencies or components for a new computer system.
The first was a client management component that would enable customer service
and sales representatives to recognize customers when they called in; for
instance, once the customer provided a phone number or some other form of
identification, the MCI representative's computer screen would load up with
details on all previous contacts with that customer. The second system needed
was a decision support component, which would help provide strategies for
marketing to customers. The third component, a contact management system,
would store information about the customer and provide a detailed record
of every contact MCI has had with its customers.
Souza says these three systems are, in fact, circular in nature; the client
contact information feeds the decision support system, which in turn provides
information to the contact management system. The contact management system
likewise provides information to the client management system and so forth.
Ideally for MCI, the three components, when combined, would help to provide,
in Souza's words, "what customers want, when they want it, through
the channel they want to use."
MCI didn't recognize right away that it needed a data warehouse, but it
did want a system that would act as a central storage point for the information
that could feed all three systems. "We knew what we needed," he
says, "but we didn't know what it was."
While some companies have to draw up separate business plans to justify
a data warehouse, Souza says the earlier management decision to reengineer
the existing sales and marketing systems provided the rationale and business
case for building the warehouse. Today, information about every contact
between an MCI customer and a company representative gets entered into the
central data warehouse as soon as it happens.
Back to Basics
In starting out on the project, MCI first chose a computer platform. Souza
says MCI realized it would need an expandable, scalable computer platform
for its data warehouse, as it anticipated rapid growth both in data storage
needs and the number of users supported. At the time (mid-1994) he felt
that symmetric multiprocessing (SMP) systems were limited to eight to 12
processors. "We didn't feel that SMP systems were inherently scalable
enough," says Souza. "We wanted to be able to increase the size
of the machine and incur incremental costs in as linear a fashion as possible."
Although clustered SMP systems today offer greater scalability than they
did a year or two ago, Souza says the company turned its attention to the
only available platforms that would meet its needs at the time, MPP systems.
Of those around, it found the IBM RS/6000 SP to be the most viable; it offered
one of the largest expansion capabilities at the time--a maximum of 512
IBM RISC-based CPUs.
MCI evaluated three databases--Oracle Parallel Server, Informix-XPS and
IBM's DB2 Parallel Edition--that could run on the RS/6000 SP. The firm selected
the Informix-XPS product. In particular, Souza says, MCI felt that its shared-nothing
architecture would support the scalability of the system better than the
shared-disk approach some other data warehouse solutions take.
The warehouseMCI system went into production in late 1994 with a 16-node
IBM RS/6000 SP and an early beta copy of Informix-XPS. Souza says the system
has grown faster than anticipated, having been upgraded first to a 52-node
system and then to the current 104-node configuration in mid-1995. Each
node has 25MB of dedicated main memory. The system has 800MB of "live"
data that is fully mirrored. The remaining 4.4TB is used for staging data
for various analyses.
The MCI system, by the way, is the largest known commercial IBM RS/6000
SP in operation today. Only Cornell University in Ithaca, NY, is known to
have a larger system--it has the maximum the system's architecture supports,
512 processors--but it is used for academic and scientific research, not
commercial data warehousing.
Offloading from the Warehouse
MCI doesn't permit its marketing analysts to work directly against the warehouseMCI
system. It is an enterprise data warehouse, intended as a central repository
of information that the whole corporation can access for data. "We
have no users directly hitting the [central] warehouse," says Souza.
Instead, to support the activities of its various business units, MCI has
established four production data marts. Each contains targeted segments
of the data warehouse's information base, not the entire amount, which are
tailored to the needs of a particular marketing or business group. Each
data mart runs on a Sun Microsystems Sparccenter2000 or Sparcstation-20,
configured as a server and located in each business unit. "The business
units pull the data they need from the corporate warehouse," says Souza.
"They can then do the real business operations on the mart side."
Because each business unit operates its own data mart, MCI's IS group doesn't
have to make promises about update schedules or around-the-clock operation
guarantees. This eases the management burden of such a large data warehouse.
And the central IS organization supports local data marts only in business
units that don't have in-line IS groups of their own.
This not only preserves the integrity of the enterprise warehouse, it permits
each business unit to choose whatever tools it deems best for its own decision
support and analysis activities. "We don't want to have a central IT
organization that users have to go through to get their jobs done,"
says Souza. "We allow them [the business units] to purchase and use
any tool they need to do their jobs."
One of the first tangible changes to come from the warehouseMCI project
is the marketing of MCI One, a package of various telecommunications services
the company tailors to meet the specific needs of individual customers.
For instance, a customer can combine long-distance, cellular and e-mail
services for less cost than purchasing each of the three services separately.
Thus far, MCI has concentrated warehouseMCI on getting to know its residential
service customers. As the project expands, MCI plans to extend access to
the data warehouse to its commercial sales and marketing organization, so
they too can get to know customers in a personal way.