On giant databases

Why Wal-Mart, Tesco and other big retailers build giant databases that record every purchase and whatever else their customers are doing? Here’s how Peter Dorrington of SAS, a software vendor, puts it:

Not only do firms like Tesco have good operational systems that control their costs, but they understand their customers and can offer particular product mixes which are attractive to certain groups

So this is the big idea. Businesses are sold on the hope of better understanding their customer and therefore finding better ways of taking the business to new levels. In fact, the best they can hope for is running the business efficiently as it is – without transformations. Without data that is not in the database you cannot attract new customers. You don’t know how big is your customers’ appetite for schinkenspeck until you offer some. And the database will not tell you that it won’t be popular in Middle East because it’s neither halal nor kosher unless there is appropriate database field, and you ask. And asking the right question is the hardest bit.

Banks are legally obliged to keep all information about their customers’ transactions for a long period of time. That information is readily available but it doesn’t help developing new products, market expansions and major investments. This is where artificial intelligence can assist. AI is bound for a big comeback.

Meanwhile, we have systems ironically classified as business intelligence and giant databases. They are surrounded by aura of mystery. Here’s what Anthony Bianco writes in The Bully of Bentonville, a leftist anti Wal-Mart opus:

From their perch in the Glass center, Information systems technicians monitor the computer-to-computer interplay using software that enables them to anticipate glitches, or “exceptions”, as they’re known in digitese, and intervene to prevent them from occuring. “We are pretty near real time. We can tell people that they need to go do something and we are within hours, depending on the event”, said Linda Dillman, who, as Wal-Mart’s chief information officer, runs the Glass Center.

Funny as it is, this description of how Wal-Mart’s is running their RetailLink infrastructure also gives indication how distant from reality is the perception of the giant databases.

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