Predictive Modeling Apps Due From SPSS and SAP

Companies looking to get more out of the data in their operational CRM applications will soon get help from SPSS Inc. and SAP AG.

Companies looking to get more out of the data in their operational CRM applications will soon get help from SPSS Inc. and SAP AG.

SPSS, of Chicago, this summer will launch a packaged predictive analytics module for Siebel Systems Inc.s Marketing application. Known as SMS (Scenario Manager Suite) for Siebel, the module will offer a series of predictive models, or scenarios, that enable nontechnical business users to run predictive analytics—generally the province of statisticians and other experts—on data in operational customer relationship management systems.

Separately, SAP, of Walldorf, Germany, plans to add new predictive capabilities to MySAP CRM Version 3.1, due next quarter. Chief among its new capabilities will be a churn management application to determine which customers are at risk of leaving and how to keep them as profitable customers.

While analytical CRM is not new, much of the technology in use today is based on historical reporting and analysis of past customer behavior. But the SPSS and SAP products are further indications of the increasing need companies have for predictive analysis—using advanced and complex statistical data mining algorithms to predict customer behavior and act accordingly. "[Predictive analysis] allows you to see what the customer is doing and what ... he wants to do and combine those ... to come up with the right offer for them," said Prasanna Dhore, executive vice president of Dreyfus Service Corp., of New York. The investment company has seen its asset reduction rate drop from 22 percent to 7 percent since deploying one of the few predictive analytics applications on the market, SAS Institute Inc.s Solution for Customer Relationship Management.

The software lets Dreyfus model customers by investment behavior and life stages and predict a customers future investment behavior. Used in combination with home-grown marketing campaign management and customer service systems and with sales force automation software from Onyx Software Corp., the SAS application lets Dreyfus present customers with new investment opportunities. "Historical information gives you a very static picture," said Dhore. "Predictive analysis tells us whats going to happen and what we can do to change customers behavior, so that theyll maybe stay with us."

Initially, SPSS SMS will be packaged with Siebel Marketing and ship by September. With help from consulting services, SMS will support other vendors marketing automation applications, SPSS officials said.

SPSS plans to extend SMS to call center applications and possibly sales applications as well, by years end.