Answered: Discuss some of the trade-offs and the…

Computer Networking: A Top-Down Approach (7th Edition)

7th Edition

ISBN:9780133594140

Author:James Kurose, Keith Ross

Publisher:James Kurose, Keith Ross

Chapter1: Computer Networks And The Internet

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Discuss some of the trade-offs and the challenges of a move to an enterprise-level
analytics solution for companies and their individual end users who might have grown
accustomed to working with their own customised solutions for generating data.
Back your discussion with i) critical review of relevant literature, ii) the case of Nationwide
Insurance

Nationwide Insurance Use of BI to Enhance Customer Service
Nationwide Mutual Insurance Company, one of the largest insurance and financial
services companies in the United States, with $23 billion in revenues and more than $160
billion in statutory assets. It offers a comprehensive range of products through its family
of 100-plus companies with insurance products for auto, motorcycle, boat, life,
homeowners, and farms. It also offers financial products and services including annuities,mortgages, mutual funds, pensions, and investment management.

Nationwide strives to achieve greater efficiency in all operations by managing its expenses
along with its ability to grow its revenue. It recognises the use of its strategic asset of
information combined with analytics to outpace competitors in strategic and operational
decision making even in complex and unpredictable environments.
Historically, Nationwide’s business units worked independently and with a lot of
autonomy. This led to duplication of efforts, widely dissimilar data processing
environments, and extreme data redundancy, resulting in higher expenses. The situation
got complicated when the company pursued any mergers and acquisitions.
Nationwide, using enterprise data warehouse technology from Teradata, set out to
create, from the ground up, a single authoritative environment for clean, consistent, and
complete data that can be effectively used for best-practice analytics to make strategic
and tactical business decision in the areas of customer growth, retention, product
profitability, cost containment, and productivity improvement. The company transformed
its siloed business units, which were supported by stove-pipped data environments, into
integrated units by using cutting-edge analytics that work with clear consolidated data
from all of its business units. The Teradata data warehouse at the insurance company has
grown from 400 gigabytes to more than 100 terabytes and supports 85% of the company’s
business with more than 2,500 users.

Integrated Customer Knowledge
Nationwide’s Customer Knowledge Store (CKS) initiative developed a customer-centric
database that integrated customer, product, and externally acquired data from more than
48 sources into a single customer data mart to deliver a holistic view of customers. This
data mart was coupled with Teradata’s customer relationship management application to
create and manage effective customer marketing campaigns that use behavioural analysis
of customer interactions to drive customer management actions (CMAs) for target
segments. The insurance company added more sophisticated customer analytics that
looked at customer portfolios and the effectiveness of various marketing campaigns. This
data analysis helped the company to initiate proactive customer communications around
customer lifetime events like marriage, birth of child, or home purchase and had
significant impact on improving customer satisfaction. Also, by integrating customer
contact history, product ownership, and payment information, the company’s
behavioural analytics teams further created prioritised models that could identify which
specific customer interaction was important for a customer at any given time. This
resulted in one percentage point improvement in customer retention rates and significant
improvement in customer enthusiasm scores. Nationwide also achieved 3% annual
growth un incremental sales by using CKS. There are other uses of the customer database.
In one of the initiatives, by integrating customer telephone data from multiple systems
into CKS, the relationship managers at the company try to be proactive in contacting
customers in advance of possible weather catastrophe, such as a hurricane of flood, to
provide the primary policyholder information and explain the claims processes. These and

other analytic insights now drive the insurance company to provide extremely personal
customer care.

You are expected to:

- Review and address relevant literature on the adoption of enterprise-level
analytics solution, highlight their advantages, disadvantages, and implementation
challenges,
- Refer to the case study provided to form an argument and make a point,
- Consider reviewing few solutions in more detail, conducting comparative analysis,
or case analysis to strengthen your argument.

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