Knowledge is power

The growth of e-commerce has created an explosion in both the amounts and types of data that companies must manage.

For instance, National Semiconductor, Santa Clara, Calif., a $2-billion-a-year manufacturer of analog-based integrated circuits, constantly funnels new versions of engineering drawings, Microsoft Word documents, and multimedia files to a Web-based program that fields customer queries about what they need a computer chip to do and then points them to the National Semiconductor product that meets those specifications.

National calls this site Systems Solutions. And, until recently, its solution set was limited to a fraction of the 200 to 400 products that National releases each year due to the work involved in organizing the data needed to respond correctly to customer inquiries. Things changed when National discovered a software package that not only organizes the data, but also contains a search engine that can quickly locate data wherever it is stored on National's IT networks.

That makes it easier for National to maintain the site because new product data no longer has to be placed in a special repository before it can be displayed on the site. "The search engine allowed us to separate the processes of hosting the Web site and managing the product databases that the site relies on to answer customer queries," says Phil Gibson, National Semiconductor's VP of Web Business. "Now, product managers simply put data about their products into the correct database tables, and the search engine will find the appropriate information to match any customer query."

The software package that is powering National's Systems Solution site is called OneStep. The company that developed it, iPhrase, refers to it as a "knowledge-management" application. But industry analysts say this package can be included in a broad category of software products known as enterprise content management (ECM) or product information management (PIM) systems.

Names aside, these systems are proving their worth in the business world. Companies spent roughly $2.6 billion on what could be called ECM or PIM software in 2003, and the market is expected to reach almost $3.2 billion in 2005, according to IDC, the high-tech research and analysis firm based Framingham, Mass.

This spending is being driven by the need to consolidate information from different data sources into a single repository that can serve as a data store for a Web site. Many companies have the same issues as National Semiconductor: wanting to display simple content on a Web site, and making up-to-date information from product databases and catalogs available to customers who want to purchase products on a Web site. Other companies want to organize data from their suppliers to streamline their own procurement processes.

Bob Moyer, president of PIM software supplier FullTilt Solutions, says these problems have existed for decades, but manufacturers only began to take them seriously when large retailers like Wal-Mart and Home Depot started pressuring their suppliers to organize their product databases in preparation for feeding information to the EPCglobal repository that is slated to support the move to RFID as a standard means of managing inventory in retail supply chains.

"Master data scattered about in disparate silos has been a longstanding problem," Moyer declares. "For years, distributors of MRO and industrial supplies begged and pleaded with manufacturers to provide detailed product information. But manufacturers just kind of danced around the issue until an 800-pound gorilla like Wal-Mart started making the same demands."

Industry experts say vendors typically have chosen labels for their systems based on the type of problems most of their customers are looking to solve. Erica Ruggulies, an analyst with Forrester Research, Cambridge, Mass., classifies ECM systems as those that manage "unstructured data" such as scanned images, electronic documents, and other data that typically goes on a corporate or marketing-oriented Web site. She says PIM systems typically handle the more structured product-related data.

"Not only do PIM vendors typically offer much functionality specific to product information," Ruggulies says, "they also offer capabilities for cleansing, normalizing, and classifying data so that it can be published in both electronic and print catalogs."

Ruggulies says these names should not hinder users' efforts in selecting the proper systems, as long as they focus their search on solving a specific business problem. "You have to think about, what's the business problem? Is it product introduction? Getting teams of people to work together? Getting answers to customers more quickly?" she says. "Once that's pinned down, you can start looking at certain areas or technologies."

Tony Frazier, an iPhrase VP, says the data aggregation, search, and presentation capabilities in the OneStep platform are ideally suited for helping companies address sales and customer service issues. "As we've gone to market, we've found that, in call centers especially, our value proposition is to help make agents more productive by enabling them to find more relevant information to resolve cases, ideally without escalating things above first-tier support," he says.

Gibson says OneStep actually solved two problems for National Semiconductor.

In addition to making it easier to update the Systems Solutions site, adopting OneStep allowed National to retire more than a half-dozen homegrown search engines that were supporting various corporate Web sites. "We had all of these tools for users to master, and things were getting out of control," Gibson says.

He marvels at how much easier it is to make National's Web sites user-friendly, something he says was especially critical for the Systems Solutions site. After product data is loaded into the appropriate database, any number of National employees—product managers, field sales and service engineers, and Web designers—can log onto the system and use natural language commands to fashion queries that customers they dealt with are likely to ask when searching for specific products.

"We can go in and fine-tune the queries as we introduce new technology," Gibson says. "But on a day-to-day basis, we find that these queries are allowing us to consistently present the best products for the problems our customers are looking to solve."

Sloan Valve Co. is a Franklin Park, Ill.-based manufacturer of plumbing supplies. With nearly 1,000 employees, Sloan selected what would be classified as an ECM system to bring order to the chaos that had arisen from the evolutionary growth of its multiple Web sites. "Part of the struggle is that the content on these sites was created in different departments, both inside and outside of Sloan," says Sultan Ghahtani, the company's Webmaster.

A bigger problem was that the IT department was responsible for maintaining content on all the sites. When a business unit wanted to update its site, it sent a request to IT, which took the lead in creating new content, deciding what documents would look like, and where they would be posted on the site. But IT could not actually execute those plans without getting approval from the business unit. "The whole process was very inefficient," Ghahtani says.

After consulting with several vendors, Sloan chose to attack the problem with a software package called Content Management Server from RedDot Solutions. Ghatani says this system was tailored to medium-size companies like Sloan, which means it was relatively inexpensive and easy for nontechnical people to use.

After installing the system, Sloan consolidated its numerous product-oriented Web sites into a single site that is updated regularly to reflect newly introduced products. The job of creating new content for the site has been turned over to an outside communications firm. Sloan's marketing and product directors still approve all content before it is posted to the site, but the approval process is managed electronically using a workflow system embedded in the RedDot package.

"We have tripled our Web content and it is much cleaner and more precise," Ghahtani says, adding that the IT staff is now focused on things like the performance of the site, as well as other strategic technology issues, rather than devoting time to developing content.

One indication of the growing importance of knowledge management systems is the recent entrée into the space by industry giants IBM and SAP. IBM moved into the market last March by acquiring four-year-old PIM vendor Trigo. In July, SAP purchased a company called a2i, which specializes in enterprisewide product content management and cross-media catalog publishing.

In addition to raising awareness about knowledge management, these acquisitions should make companies that have not yet selected a system think about the age-old single-vendor versus best-of-breed question. This issue is especially important in the knowledge management arena because integration of both applications and data is crucial to the success of any knowledge management program.

Where data is concerned, no knowledge management program can function effectively unless all the data being funneled to a Web site or user interface has been properly rationalized. Functionality for rationalizing data was the main attraction for IBM and SAP in their acquisitions of Trigo and a2i, respectively.

Jim Murphy, an analyst with Boston-based AMR Research, says the integration challenge is a good reason for SAP users—particularly those looking to comply with retailers' requirements for joining the EPCglobal Network—to look at SAP's content management solution. "If you already have an ERP backbone in place, it's probably best to stick with that technology if you can," Murphy says. "Having a new vendor jump in lowers your chances of having the integration go smoothly."

FullTilt's Moyer says users don't necessarily have to work with a single vendor to execute a successful knowledge management strategy. However, he does say they must be aware of the need to map out plans for rationalizing data and integrating the applications that will feed the knowledge management system.

"Right now, too many companies are looking at this solely as a question of how to satisfy Wal-Mart's or Home Depot's demands for consistent product information," he says. "But even before they get to that point, they need to think about cleaning up their data for their own internal use. It's like an iceberg in which dealing with outside customers is just the top. What's below the water—and what they don't necessarily see—is the importance of internal data synchronization."