Case Study:
Acxiom Corp. has always been good at managing data .Lots of data. By its own estimate, Acxiom manages more than 20 billion customer and prospect records. "We do three things really well," claims Alex Dietz, who is referred to internally as the "products and infrastructure technology leader" and functions as Acxiom's CIO. (Acxiom has no traditional titles.) Those three things, Dietz says, are managing large volumes of data; cleaning, transforming, and enhancing those data; and distilling business intelligence from the data to drive smart decisions. The data are used by Acxiom's approximately 1,000 clients for everything from developing telemarketing lists and identifying prospects for credit card offers to screening prospective employees and detecting fraudulent financial transactions. No one at Acxiom seems to know exactly how much data the company manages in its 11 tightly guarded data centers. The company's central data center is located north of Little Rock, in Conway, Arkansas, where Acxiom was founded in 1969 as a spin-off of a local bus manufacturer. Acxiom also has data centers in Downer's Grove, Illinois, outside of Chicago, and as far away as Sunderland in the United Kingdom. The company recently opened a data center in Phoenix, and an additional facility is under construction in West Little Rock. The best estimates are that the Conway systems alone store between 1.5 and 2.0 petabytes of data, or up to 2,000 terabytes.
A portion of the data makes up Acxiom's information products, such as its InfoBase database of consumer data and its Personicx list of U.S. households segmented into 70 categories. Acxiom clients use those offerings to build marketing prospect lists, check the accuracy of names and phone numbers in their customer databases, and add demographic details or verify personnel data. Acxiom continues to add to its portfolio: In August, it debuted Personicx LifeChanges, a system that tracks U.S. households through life stages such as marriage or the purchase of a home. Those and other data products account for just over one-fifth of Acxiom's revenue.
To build its data library, Acxiom collects information from a wide range of public and private sources. The company has property deed-registration information from 930 counties across the United States, as well as from 3,500 telephone directories. It also purchases data from private sources, such as catalog and magazine subscriber lists and research from consumer surveys.
But a lot of the data Acxiom manages belongs to other companies. More than half of its revenue is generated by data-related services, such as building and hosting data warehouses, integrating and cleaning customer data, running customer relationship management applications, developing customer marketing lists, and analyzing data or providing clients with the means to analyze it themselves. Clients typically store three years of complete customer history data with Acxiom, CEO Charles Morgan says, but that's expanding
The case has drawn Acxiom into the debate over when it's appropriate for companies to supply customer data to government agencies. Acxiom provides data to government agencies, acknowledges the company's privacy leader, Jennifer Barrett, though she declines to offer specifics. The company also provides privacy-consulting services to the government, Barrett notes, pointing out that the government's privacy efforts and policies lag the private sector by about 10 years. "So when government agencies ask companies for data, they often haven't thought about these issues the way Acxiom has," she says. Still, government contracts account
for less than 1 percent of the company's revenue.
Acxiom considers privacy a core competency, and providing clients with privacy-consulting services is a lucrative part of its business. It was among the first companies to create a chief privacy officer post and has nine full-time employees devoted to privacy issues, along with dedicated resources in each country where Acxiom does business. Also, Acxiom is working with several members of Congress to help shape a national privacy policy, according to the company's legal leader, Jerry Jones.
Privacy's twin is security, and Acxiom is working hard on that too. The company created a security chief post in late 2003 and named Frank Caserta, a senior technical adviser in the database and data warehouse group, to the position. His job, he says, is to make sure Acxiom has a centralized, strategic view of data security and to champion the best data security practices within Acxiom and among its clients. An increasingly security-conscious world is opening up new opportunities for Acxiom to provide data in areas such as employee background checks, compliance with regulations like the USA Patriot Act and the Do Not Call Registry, and fraud detection. In February 2004, credit data provider and Acxiom customer TransUnion LLC, together with Acxiom, introduced a system for fraud prevention and regulatory compliance for financial services, insurance, and telecommunications companies.
Acxiom has more ambitious plans on the global front. CEO Morgan says information systems for checking customer credit are woefully underdeveloped in China, where consumers can wait months to get approval for car loans. "You can imagine the fees," he exclaims. "And you wouldn't believe the paperwork."
Source: Adapted from Rick Whiting, "Data Demands Respect,"
InformationWeek, October 25, 2004. Copyright © 2005 CMP Media LLC.
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CASE STUDY QUESTIONS REAL WORLD ACTIVITIES
Q1. Acxiom is in a unique type of business. How would you describe the business of Acxiom? Is it a service- or a product-oriented business?
Q2. From the case, it is easy to see that Acxiom has focused on a wide variety of data from different sources. How does Acxiom decide which data to collect and for whom?
Q3. Acxiom's business raises many issues related to privacy. Are the data collected by Acxiom really private?
Plus these additional questions:
1. In general, what are some key hardware aspects and challenges of a data management computer system?
2. In general, what are some key software aspects and challenges of a data management computer system?