Sophisticated software methods are being adopted by businesses to enable them to better understand their client base by interpreting customer and trading information.
And one Irish company which is attempting to make major inroads into the area of business intelligence is Norkom Technologies. It is aiming to secure a significant share of a market which it is estimated will grow to $4.7 billion (€4.35 billion) by 2001. In 1997 the same market was valued at just $1.1 billion by Meta Group IT research.
The company has attracted the attention of a number of global venture capitalists since it opened for business last March. It has also expanded its workforce to 30, opened a new office in Brussels and it is about to open another in London. What is unusual about such progress is that Norkom has yet to launch its first product. Nevertheless, managing director Mr Paul Kerley, forecasts it will become "Europe's number one business intelligence, consulting, research and solutions company within four to five years".
Indeed, Mr Kerley had his sights set on this goal long before Norkom was established. Five years ago he had a loose plan to build a tool which would re-interpret company information in a number of valuable ways. But an opportunity arose to take a position as senior manager of consulting and projects at Cap Gemini, the IT services company.
"At the time I didn't have significant business skills and customer-facing experience, so I took the job. But it was an open secret I was there as a corporate anarchist, and I was always going to leave to do this," he says.
When he left Cap Gemini last year, Mr Kerley pulled together three industry colleagues to establish the Norkom management team. The company's bread and butter function at the moment centres around consultancy, research and analytical services. It has developed a number of customer and marketing intelligence services for its clients, each one tailored to the individual's requirements.
Specialising in the telecommunications and insurance sectors, Norkom takes transactional data amassed by company databases, and blends it with local demographic data to build up a clearer picture of the customer base. Telecommunications functions include analysing "churn" rates, where customers switch from one telecoms provider to another for unexplained reasons. On the insurance end, Norkom can build up profiles of policy holders and estimate how much disposable income they might be prepared to spend on upgrading their policies.
Depending on the amount of information available to a client the various ways Norkom can manipulate the business information are almost limitless. Its business intelligence tools would typically include data warehousing, data mining and knowledge management technology.
"This information helps companies decide whether they should be seeking new customers, or just selling more products to the existing customer base. People lose business on the basis of price, service or recognition, and we can help them differentiate which applies on a case-by-case basis," says Mr Kerley.
Now the Norkom management team is "betting the mortgages" on its Alchemist product which was developed with £2 million (€2.54 million) in private finance, and £500,000 from Enterprise Ireland.
Described by Mr Kerley as an "enterprise portal", it is an intelligent software product suite which promises "customer intimacy". It will be launched in June at the European Customer Relationship Management (CRM) conference in London.
Built on Java and ideal for use in the sales field, Alchemist interacts through a Web interface with clients, and depending on their requirements can manipulate valuable company information to detail customer profiles. A typical application would involve Alchemist automatically sending an email to an account manager three months before a customer's insurance policy is due to expire. The intelligent software might have deduced from the customer profile that he or she is likely to shop elsewhere. The warning message gives the account manager time to contact the customer and work on their retention.
Telecommunications applications might include indicating when tariffs should be switched, or observing employee telephone behaviour.
Norkom is already piloting Alchemist with three Belgian companies, through contracts valued at around £600,000. It has ambitious plans to shift straight into a "year three phase of growth" with a £10 million investment plan. The company says a recent visit to New York opened up positive leads for it to raise between $5 million and $15 million over the next two years.
Norkom plans to put a middle management layer in place, and open a London office in June. Mr Kerley would like to expand the British presence to 40 people over a three-year period, open an office in Copenhagen in early 2000, and later that year open a New York office.
Belgium was chosen as the test bed for the launch of Alchemist because of its manageable size, and because the business intelligence market has barely been developed there yet. The product is being targeted within a 150-kilometre diameter of Brussels.
Mr Kerley believes there is no better time for an Irish start-up company to take on the world.
"All of the conditions that prevailed in Silicon Valley now prevail in Ireland. The multinationals that produced the skills have created a supply chain for new enterprises and because there is huge respect for Irish technological capability around Europe, it is a lot easier to build a global company out of Ireland than it was a few years ago."
