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Customer Profiling as a Service on the Internet

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 Customer Profiling as a Service on the Internet

FELIX NTAWANGA, ANDRÈ P. CALITZ AND LYNETTE BARNARD

Nelson Mandela Metropolitan University
PO Box 77000
Port Elizabeth, 6031
+27415042639
{Felix.Ntawanga},{Andre.Calitz}and {Lynette.Barnard}@nmmu.ac.za

ABSTRACT

E-commerce and Internet-based transactions are now integrated into business functions.
Internet-based transactions are efficient, reliable and can lead to a reduction in transaction
costs. For bigger companies, the trend is to implement and host e-commerce systems in-
house on a client-server computer architecture. Internet technologies continue to evolve and
IT businesses are now offering their products as services that can be accessed and utilised on
demand, with customers only paying for actual service usage. The growth of Web 2.0
concepts has led to the development and evolution of web-based communities (such as
Facebook), hosted services and applications. Hosted services and applications, for example
Software as a Service (SaaS) where software is accessed on the Internet and utilised on
demand, is being utilised by new business ventures.

This research investigates and proposes a model businesses can utilise to implement a
customer profile as a service on the Internet. Online businesses incorporate customer profiles
in E-commerce applications to assist with the implementation of one-to-one marketing
strategies, such as personalisation. Research has proven that personalisation can lead to an
increase in customer loyalty. Customer profiling as a service can be beneficial to an online
business in that customer's needs and preferences can be accessed on demand, while data
security, scalability, efficiency and reliability of the data are handled by a third party.

Keywords: E-Commerce, Customer profiling, Internet services, Service Oriented

Architecture.
INTRODUCTION

The increase in the use of the Internet and its related technologies continue to significantly
change the way business is conducted (Bai, Chou, Yen and Lin, 2005). Businesses are now
taking advantage of the Internet and the latest innovations in technology to communicate with
multitudes of potential online customers. Businesses are offering products using online
techniques and this enables customers to browse and purchase products online anywhere,
anytime (Schneider, 2007; Bai et al., 2005). This type of online communication between
businesses and customers is what has been termed as electronic commerce (e-commerce).

E-commerce has enabled businesses to extend to a global market and thereby increasing the
number of customers and consequently profits (Queensland Government, 2009). The
proliferation in usage of Internet-enabled mobile devices has given businesses a further
opportunity to utilise mobile commerce (m-commerce) (Bai et al., 2005). Research studies
indicate that both e-commerce and m-commerce will continue to impact the global business
environment.

Businesses are able to accomplish critical business processes, for example sales, using e-
commerce systems that are commonly managed in-house on a client-server architecture
(Schneider, 2007). The advent of cutting-edge web technologies such as Web 2.0 has made
interactive web development and e-commerce deployment easier than before. These
technologies have enabled increased competition on the web, as new online businesses can
easily be established. Amazon Web Services (AWS) is an example of a company providing
utility computer services on the Internet such as customer authentication, access to Amazon
product data and access to historical sales data (aws.amazon.com, 2009).

IT businesses have realised the potential of service offerings and are now providing products,
such as software and hardware, as services that can be accessed on demand, using the
Internet. Businesses are aligning their offerings as on-demand services using new business
paradigms such as a service-oriented architecture (SOA) and business process management
(BPM). Software as a Service (SaaS) and cloud computing are the two most popular service
products available on the Internet (Miete, 2009).

Determining online customers’ needs and preferences poses a challenge for businesses and
customer profiles have been implemented and incorporated into e-commerce systems as a
remedy (Ntawanga, Calitz and Barnard,2008; Lai, Lain an Ku, 2003). Customer profiles
provide information necessary for employing one-to-one marketing strategies such as
personalisation (Adomavicius and Tuzhilin, 2005). Businesses are moving into service-
oriented architectures and cloud computing where software and hardware are provided,
accessed and utilised as a service on demand. Research in this area is vital to determine the
business value of employing such cutting-edge technologies in order to gain competitive
advantage and to ensure organisational agility.

The aim of this research is thus to investigate how a customer profile can be provided and
utilised as a service, using technologies such as SOA, service and cloud computing. This
paper discusses how IT businesses are utilising these technologies to provide software and
hardware as services available on demand anywhere, anytime via the Internet. A model for
customer profiling and how it can be aligned as an on-demand service over the Internet will
be proposed. The paper will further discuss the problem the research aims to address, the
literature reviewed and methodology that was followed. Conclusions and managerial
implications will conclude the discussion.

PROBLEM INVESTIGATION

Business and technology focus is now shifting from static business processes towards more
dynamic and agile service-oriented processes. SaaS and cloud computing are enjoying wide
recognition on the Internet (Miete, 2009). Service-orientation helps businesses to match the
dynamic nature of today’s business environment and promotes organisations’ agility. Agility
helps businesses to survive the competitive web environment which have low barriers of
entry for new players, further intensifying competition and survival (Chang, Changchien and
Huang, 2006).

Research conducted in e-commerce indicates that it is essential to understand online

customers’ desires prior to providing them with products and services (Martin-Guerrero,
Palomares, Balaguer-Ballester, Soria-Olivas, Gomez-Sanchis and Soriano-Asensi, 2006;
Srivihok and Sukonmanee, 2005). Customer profiles have been implemented to determine
online customers’ needs and preferences in a client-server architecture (Ntawanga et al.,
2008). This research aims at proposing a customer profile service that can be accessed and
utilised on demand in a service-oriented business environment. Specific research questions
include the following:

1. How can a customer profile be offered as a service on the Internet?

 2. How can a customer profile be provided and utilised as a service in a service-oriented
business environement?
3. To what extent can customer profiling as a service benefit an online business from a
service provider’s and consumer’s perspective?

OBJECTIVES OF THE STUDY

The main objective of the research is to determine how a customer profile can be aligned,
provided, accessed and utilised as a service in a service-oriented online business
environment. The concepts of SaaS and cloud computing have recently gained much
recognition in the business environment and subsequently IT is regarded as a driving
influence for this next generation business approach (Miete, 2009; Brantner, Florescu, Graf,
Kossmann and Kraska, 2008). Online businesses utilise customer profiles to implement one-
to-one marketing strategies such as personalisation and recommendation. Both
personalisation and recommendation have proven to improve customers’ retention, loyalty,
sales and consequently profits (Oracle 2008).

This research envisages that having a customer profile provided as a service will help
businesses bring customer loyalty into the dynamic and challenging business environments
businesses operate in today. Research indicates that a 5% increase in customer loyalty can
produce 25% to 100% increase in profits (Reichheld and Teal, 2001), hence customer
profiling as a service has potential to provide additional benefits to a business.

RESEARCH METHODOLOGY

The research methodology included a literature study on e-commerce and e-commerce

customer profiling systems in traditional client-server e-commerce environments. The
concepts of service-orientation, SaaS, cloud computing and Business Process Management
(BPM) as tools for service-orientation realisation were also studied. A prototype web-site was
developed incorporating customer profiles in a client-server architecture. The application was
evaluated using a usability questionnaire. The web-site and customer profile is currently
being implemented as a service in SOA.

E-commerce

Innovations in Internet technologies have enabled many businesses to implement e-commerce

applications. E-commerce can be defined as the use of Internet technologies to conduct
business transactions (Schneider, 2007). E-commerce has shown significant growth over the
past years and research indications are that online business is going to continue experiencing
remarkable growth. E-commerce has enabled businesses to expand their markets worldwide
thereby increasing the customer base, sales and consequently profits. The increase in the use
of Internet-enabled mobile devices has given businesses a further opportunity to extend e-
commerce into m-commerce. M-commerce is defined as the conduct of business transactions
using Internet-enabled mobile devices (Bai, Chou, Yen and Lin, 2005).

E-commerce and m-commerce both have the same objective of performing business
transactions using the Internet. Customers have access to the online market at their
convenience anywhere, anytime. E-commerce is classified into a number of categories
according to the main players involved in the transactions. The two fundamental classes of e-
commerce are business to business (B2B) and business to consumer (B2C) (Schneider, 2007).

B2B e-commerce is the transactions that occur between businesses, for example, online
companies that specialise in marketing and advertising. B2C e-commerce is when businesses
interact with end users in the transactions. An example of B2C e-commerce is when a
customer purchases products online from an e-commerce site such as kalahari.net (Schneider,
2007; kalahari.net, 2009). Other classes emanate from these two classes (B2B and B2C), for
example, consumer to consumer (C2C) which result from B2C when a business offering the
product is a consumer as well.

There are a number of benefits for conducting business online, in addition to increased
customer base and market, for example (Queensland Government, 2009; Schneider, 2007):

 Internet transactions are efficient and cost effective;

 Provides competitive business advantage; and
 Establishing an e-commerce store is relatively cheaper as compared to a brick and
mortar store.

E-commerce applications are normally implemented and managed in-house using a client-
server architecture. Online businesses invest in infrastructure such as back end servers,
middleware and user interface software development (Schneider, 2007). The advent of new
web technologies, for example Web 2.0, simplified web development and has led to an
increase in e-commerce adoption. E-commerce is more competitive than conventional
commerce because e-commerce has low entrance barriers for new players (Chang,
Changchien and Huang, 2006). In addition, e-commerce levels the playing field, enabling
new businesses to compete with existing ones, further intensifying the competition.

The business community has recently been exposed to the “as a service” concept that is
enjoying wide recognition (Murray, 2009). IT businesses are now offering their products as
services on the Internet that can be accessed and utilised on demand. The next section
discusses the concepts of service-orientation, cloud computing and BPM as the new wave of
enabling technologies.

Service-orientation, Cloud computing and Business Process Management (BPM)

Recently, service computing has become a multi-disciplinary concept that covers the science
and technology of bridging the gap between Business Services and IT Services. Service
computing focuses on automating business processes using IT services (Buyya, Yeo,
Venegopal, Broberg and Brandic, 2009). Businesses are more service-oriented and IT plays a
crucial role in the delivery of the required service (Qui, 2007). Today’s business environment
is dynamic and to remain competitive, enterprises have to be agile and respond to customers’
needs (Oracle, 2008).

Service-orientation enables businesses to respond quickly to the ever changing business

environment and thereby meeting dynamic customers’ needs. By meeting customers’ needs
and adapting to the changing environment, service orientation provides a basis for the link
between business processes and IT. A number of technologies exist that are promoting
service-orientation and computing, for example, web services and service-oriented
architecture (Buyya et al., 2009). A web service is defined as a software system designed to
support interoperable machine-to-machine interaction over a network normally used to
implement SOA (Schneider, 2007). This section discusses the concepts of SOA, SaaS, cloud
computing and BPM as fundamentals of the current business and technology focus in
response to the challenges in today’s business environment.

Service-oriented Architecture (SOA)

SOA can be defined as a set of patterns and guidelines for creating loosely coupled,
standards-based business-aligned services that provide a new level of flexibility in
responsiveness to business threats and opportunities (Canfora, Fasolino, Frattolillo and
Tramontana, 2008). An SOA is made up of a collection of services wrapped in web services.
Web services enable communication between programs, databases and business functions by
exchanging messages expressed in XML (Erl, 2005).

A number of definitions for a service exist, however, for the purpose of this paper a service
will be defined as an application of business capability that provides business value needed
by a community of service users (Josuttis, 2007). According to Erl (2005) a service must
have the following properties:

 A well-defined function;
 Self-contained; and
 Should not depend on context or state of other services in environment it operates.
A service is normally provided with its associated different service operations that can be
used to interact with it (Josuttis, 2007). For example, a service named CustomerService can
have an operation getCustomerData with an input customerId of type int and the operation
returns CustomerName of type string (Josuttis, 2007).

A number of business benefits can be realised by the implementation of SOA in a business.

The following are examples of such benefits (Erl, 2005):

 Improved integration and interoperability;

 Loosely coupled services improves component re-use;
 Leveraging of critical business legacy systems;
 Provides best of breed alternatives for organisations to choose from; and
 Promotes organisations responsiveness to changes in business environment (agility).

Software as a Service (SaaS)

SaaS utilises service computing in order to develop a piece of software artefact that resides in
the cloud and can be accessed on demand over the Internet (Vaquero, Rodero-Merino,
Caceres and Lindner, 2009; Miete, 2009). Salesforce and Zoho are examples of organisation
offering software products as services (Salesforce.com, 2009; Zoho.com, 2009). Consumers
utilising the software can be developers, architects, analysts, business partners and end user
customers (Zoho.com, 2009; Microsoft.com, 2009).

Salesforce specialises in Customer Relationship Management (CRM) software that can be

accessed on the Internet and service consumers only pay for what they use (Salesforce.com,
2009; Hayes, 2008). Figure 1 is an example of a free demonstration version of the Salesforce
system. Figure 1 illustrates the components of the system and the tabs at the top of the screen
indicate other services that can be run when a consumer has logged on to the Salesforce
service website (Salesforce.com, 2009).

Figure 1: Salesforce CRM services page.

Zoho services provide services such as reporting tools, invoicing, word processing and
project management software that can all be accessed online at a fee. Customers can log in
using a user name and password, create a document and keep it on a Zoho server. Figure 2
shows an interface on an invoicing service from a free trial version of Zoho (Zoho.com,
2009).

Cloud Computing

Cloud computing is when highly scalable computer hardware resources such as CPU, storage
and network bandwidth are provided and accessed as a service from the Internet at a fee and
consumers only pay for what they have used (Vaquero et al., 2009; Buyya et al., 2009;
Hayes, 2008). Amazon Web Services (AWS) is currently the most prominent utility
computing provider (Brantner et al., 2008; Hayes, 2009) whilst others include Microsoft’s
Azure platform service (Microsoft.com, 2009).
Figure 2: Zoho online invoicing service.

Amazon Elastic Computing Cloud (EC2) is one example of Amazon’s utility computing
application. EC2 provides consumers with scalable computer hardware such as CPU and
disks that can be accessed as a service on demand from the cloud (aws.amazon.com 2009).
Amazon simple storage service (S3) is another example from the AWS list. S3 provides
scalable and highly available storage service at low cost (Brantner et al., 2009). Other AWS
include Amazon simpleDB, Amazon cloudfront and simple queue service (SQS)
(aws.amazon.com, 2009).

Microsoft Azure Platform services provide runtime environment in the cloud that delivers on-
demand computing, storage, and automated systems management (Microsoft, 2009).
Developers can host, scale, and manage web applications on the Internet through Microsoft
data centres using Azure. Microsoft Azure services platforms include Azure for developers,
system integrators, independent software vendors (ISV) and business.

The benefits of service and utility computing are that the services (Buyya et al., 2009;
Murray, 2009):

 Can be accessed and utilised anywhere, anytime;

  Is cost effective as consumers pay for what has been used and there is no need for
upfront investment; and
 Handle non-functional requirements such as security, scalability, availability, updates,
efficiency and implementation complexities as they are taken care of by the service
providers.

Service and utility computing is a promising challenge to software providers to create

software that can be invoked as services and serve millions of consumers as opposed to
having a piece of software running on individual machines (Miete, 2009). The underlying
factor for such a vision is the wide acceptance of the Internet and cutting-edge technologies,
such as web services and SOA.

Business Process Management (BPM)

BPM is a management discipline that deals with the design and improvement of business
processes (Oracle, 2008; Josuttis, 2007). BPM provides the IT and business experts with a
common language in order to attain their separate goals that points towards achieving the
organisation’s overall goal (Oracle, 2008). Services are parts of business processes and form
the basis for SOA (Josuttis, 2007). BPM assists with analysis and decomposition of business
processes into their respective lowest level of activities, which are services that can be
implemented using SOA.

The next section discusses how online businesses adapt to survive the challenging online
environment by implementing customer profiles to determine customers’ needs and
preferences. The customer profiles are used for online marketing which in turn improves
customer loyalty.

Customer profiling in client-server environment

Determining online customers’ preferences is one major challenge businesses face on the
Internet. Customer profiles have been implemented as a remedy and online businesses
increasingly recognise the vital role customer profiles play in determining customers’ needs
and preferences (Ntawanga et al., 2008; Adomavicius and Tuzhilin, 2005). Customer profiles
are used to implement one-to-one online marketing strategies, such as, personalisation and
recommendation. These techniques assist e-commerce businesses to survive on the Internet
by increasing customer loyalty and turning e-commerce site visitors into customers (Kim,
Lee, Shaw, Chang, Nelson and Easley, 2006; Adomavicius and Tuzhilin, 2005).
A customer profile is a snapshot of who your customers are, how to reach them and why they
buy from your business. A customer profile is a collection of information that describes the
customer (Adomavicius and Tuzhilin, 1999). Customer profiling is the process of developing
a profile using relevant and available information to describe the characteristics of an
individual customer and to identify discriminators from other customers and drivers for their
purchasing decisions (Manifold Data mining inc., 2008). In other instances online businesses
create customer profiles for a group of customers to identify the group’s collective
characteristics.

Customer profiles can be classified by two sets of information namely factual or static and
behavioural or dynamic (Adomavicius and Tuzhilin, 1999). Factual or static customer profile
information contains specific facts about the customer, including demographics, for example,
age, gender, name and surname. Behavioural or dynamic customer profile information
models the behaviour of the customer and this is done using conjunctive rules such as
association and classification rules (Adomavicius and Tuzhilin, 1999). An example of
behaviour is when shopping on weekends; a specific customer usually spends in excess of
R100 on groceries (Adomavicius and Tuzhilin, 1999).

Businesses utilise customer profiles to filter and analyse information to understand and
endeavour to meet the needs and preferences of each specific customer or a group of
customers based on their profiles (Liu, Lin, Chen and Huang, 2001). Customer profiles
provide a suitable tool to analyse and determine customers’ needs and preferences that can be
used to implement one-on-one online marketing strategies. Some notable online businesses
that utilise customer profiles include kalahari.net in South Africa and Amazon.com in the
United States of America (kalahari.net, 2009; Amazon.com, 2009).

Explicit and implicit feedbacks are two common methods used by online businesses to
establish a customer profile (Jokela, Turpeinen, Kurki, Savia and Sulonen, 2001). Explicit
feedback is the simplest method to establish a customer profile. Customers are openly asked
to register their details on the website using an online questionnaire. Information that is
captured during this process normally includes factual information such as name, gender, age
and other demographic details. Figure 3 shows the explicit feedback method for collecting
customer information on kalahari.net (kalahari.net, 2009).

In some instances the registration process proceeds by asking the customer to provide
preferences, answer a specific questionnaire or rate items or products on the website
(kalahari.net, 2009; Ntawanga et al., 2008). These sections for registration include
behavioural or dynamic information that is used to model the users’ online behaviour.
Examples of online businesses that use explicit feedback questionnaires to establish
behaviour customer profile information include Amazon.com, kalahari.net and Ebay.com
(Amazon.com, 2009; kalahari.net, 2009; Ebay.com, 2009).

Figure 4 is a screenshot example of how behavioural customer information can be obtained

from the customer using a questionnaire (Ntawanga et al., 2008). Research shows that
questionnaires are the most commonly used method to establish an initial customer profile.

Figure 3: Explicit feedback customer profiling questionnaire.

Figure 4: Product knowledge questionnaire.

The benefits of creating individual profiles for customers include assisting implementing one-
on-one online marketing strategies, such as personalisation, customisation and
recommendation to be performed on online websites. These methods have proved to increase
customer retention, loyalty and consequently improve sales and profits (Lai et al., 2003).

Personalisation refers to the use of technology and available customer information to tailor e-
commerce interactions between a business and each individual customer (Adomavicius and
Tuzhilin, 2005; Kim and Lee, 2005). Personalisation helps to make a website more
responsive to unique and individual needs of each user (Adomavicius and Tuzhilin, 2005).
Successful personalisation applications depend on knowledge about consumers’ needs and
preferences that is contained in a customer profile.

Customisation is a widely used method to remove a burden of website information overload

on the part of the online user (Kim and Lee, 2005). Customisation refers to a process whereby
end users are given an opportunity to select requirements from a set of comprehensive
options and the online businesses provide products and services based on users’ explicitly
selected requirements (Zhang and Jiao, 2007; Weightman and McDonagh, 2003). In
customisation, end users have a direct input in specification and creation process of a product
or service (Weightman and McDonagh 2003).

Recommendation refers to the use of available customer information to propose what users
will be interested in on a website. A recommender system is a system that attempts to assist
users when making decisions in various domains by offering suggestions about items to users
by employing various methods (Chung et al., 2007). A major difference between
personalisation and customisation, and recommender systems is that in recommender systems
suggestions are made to customers in proposal form and the customers have a choice of
whether to view or ignore recommendations. In personalisation and customisation the
products are suggested without an option for customers to choose using customers’ observed
or explicitly provided (especially customisation) preferences.

The following methods are commonly used to derive recommendations in online websites:
 Collaborative filtering: Collaborative filtering determines the contents for a specific
customer profile based on the customer’s profile and reference to other customers
with similar profiles. The system does the recommendations solely based on
analysing similarities to other customers (Kim and Lee, 2005), and tries to offer
recommendations on items the customer has not yet rated.
 Content based filtering: The content based filtering technique is done based on the
customer’s profile created from what the customer has done in the past (Kim and
Lee, 2005). Some of the customer actions that can be used to create the profile are
purchasing behaviour and items a customer has rated in the past.
 Knowledge based or Hybrid filtering: The knowledge based filtering technique is a
combination of content based filtering and collaborative filtering techniques
(Adomavicius and Tuzhilin, 2005). One way to implement the knowledge based
filtering technique is to implement the content based filtering and collaborative
filtering techniques separately and then combine the results.

A CUSTOMER PROFILE AS A INTERNET SERVICE

A literature review was conducted on customer profiling and new Internet technologies.
Similar customer profiling systems were analysed and evaluated (Ntawanga et al., 2008; Lai,
et al., 2003). The analysis focused on how customer profiles are created by studying
parameters used to store customer profile information, how customer profiles are updated to
capture changes that can take place and how the profiles can be used to provide accurate
personalisation to customers (Ntawanga et al., 2008). Table 1 show parameters used by
selected E-commerce websites to store customer information in a form of a profile
(Amazon.com, 2009; kalahari.net, 2009; Ebay.com, 2009).

Required Fields Field name kalahari.net Amazon.com ebay.com

Name Yes Yes Yes
e-mail address Yes Yes Yes
Phone number Yes Yes Yes
Date of Birth Yes Yes Yes
Country Yes No Yes
Password Yes Yes Yes
Optional Fields Cell phone number Yes No Yes
Initial preferences Yes Yes Yes
Mobile alerts Yes No No
Table 1: Customer profile parameters.
One of the most difficult questions in service computing that SOA architects have to answer
is what services should be implemented to achieve a business goal (Erl, 2005). IBM’s
service-oriented modeling architecture (SOMA) was used to analyse the customer profile
service and derive associated operations for customer profiling (IBM, 2004).

Customer profile as a service has the following operations:

 register customer;
 identify customer;
 retrieve a customer profile;
 monitor customer activities;
 update a customer’s profile; and
 delete a customer profile.
The following subsections will discuss each operation. The operations perform the customer
profiling and can be accessed by clients, running on any platform and implemented using any
programming language.
 A. Register customer
The core function of the RegisterCustomer operation is to perform the registration of a new
customer. Generally when a customer visits an online website for the first time, he or she is
requested to register (kalahari.net, 2009; Amazon.com, 2009). The registration process is
normally optional as customers can browse and purchase without having a user account or a
profile on a website. The goal of the project is to investigate how customer profiles can be
utilised as a service using technology such as SOA and it was therefore vital to have each
user registered in the system. Registration is initiated by customers completing an online
questionnaire that captures biographical details. The next step in the registration process is
the completion of an online questionnaire to create the customer’s initial profile (Ntawanga et
al., 2008). Some of the input parameters for this operation are shown in Table 1.

B. Identify customer
IdentifyCustomer’s main function is to determine if a customer is registered or not within the
system. GetProfile will be invoked automatically if the customer already exists, otherwise
RegisterCustomer will be invoked to ask the customer to register in the system. The operation
can be called and accessed by any service. The input parameters for this operation are
customer login details, for example user name and password.

C. Retrieve a customer profile

The basic functionality of this operation is reading the customer profile database and
retrieving a customers’ profile. GetProfile will provide its functionality to any service that
sends a request, provided the requestor meets the conditions for the interaction. Only
registered customers will have their profiles available to be accessed and used. The input
parameters for this operation is customer unique Id and the output is a string describing the
customer’s profile.

D. Update a customer profile

UpdateProfile will be responsible for updating the individual customer’s profile. Legitimate
parameters that describe the customer’s profile will be sent to the operation and the operation
will decide whether to update or decline the update of a profile. The UpdateProfile
operation’s tasks will depend on three other implicit operations that would be running within
the client’s environment, namely:
  Monitor customer activities will be monitoring and recording customers’ behaviour
during the interaction session on the clients’ side;
 Analyse customer activities will be responsible for analysis and classification of the
recorded activities of the customer and for deriving a new profile; and
 Compare profile will use the GetProfile service to retrieve the customer’s old profile
and compare it with the newly derived profile. When the two profiles differ, the
UpdateProfile will be utilised to update a particular customer’s profile, otherwise the
update will be abandoned.

E. Delete a customer profile

DeleteCustomer will be invoked when customers opt to remove their details from the system.
A number of websites that store customer profiles do not provide an option for customers to
remove their details once they register (Amazon.com, 2008; kalahari.net, 2008). In this
research, this operation within the customer profiling service will be used to determine:

To what extent can optional deletion of customer profiles improve customer’s trust and
honesty in providing details for customer profiling?

Research indicates that customers do not trust online websites that collect their personal
information and as a consequence they provide information that does not reflect their true
opinion (Chang et al., 2006). We propose that, when users have greater control over their
profiles, for example knowledge of how the system rates them, editing and deleting their
profiles, the more they will be willing to provide relevant and accurate information for
profiling.

Figure 5 depicts a model proposed by the authors on how a customer profile can be provided
as a service on the Internet. A business utilising an e-commerce application can access the
customer profile as a service.
Figure 5: Customer Profiling as a Service on the Internet.

The customer profile service (Figure 5) will be available within the cloud, providing a secure,
reliable, scalable and cost effective service. Since this service operates within the cloud,
neither the customer nor the business will be responsible to ensure the security, reliability,
scalability and cost effectiveness. The customer interface could exist on any platform, for
example a computer or a mobile device. The customer interface can have access to any
number of servers and the servers can retrieve the specific customer’s profile by using the
GetProfile service available within the customer profile service in the cloud.

CONCLUSION AND FUTURE RESEARCH

Conducting business online is challenging when it comes to customer retention, as there are
many online competitors and customer loyalty is lower in e-commerce than traditional
commerce (Chang et al., 2006). Online businesses implement methods such as
personalisation, recommendation and customisation to improve customer loyalty on the web.
Customer profiles provide a basis through which recommendation and personalisation
decisions can be accomplished. SaaS and other technologies such as SOA is cutting-edge
technology being used by businesses to implement IT business systems and more research
needs to be conducted in this field.

Customer profile as a service can help businesses to establish online customer needs and
easily act in response to them, thereby improving customers’ loyalty, sales and consequently
profits. When customer profiles can be accessed on demand as a service, online businesses
will not need to worry about implementation complexities. Scalability, availability and
security are guaranteed in cloud computing that can be used to host the customer profile
service. Customer profiles can be shared among online businesses which can relieve
customers from conducting repetitive registration tasks on various online websites they visit
(Zoho.com, 2009).

Future research will involve implementing the customer profile as a service using technology
such as SOA and web services. A platform such as Microsoft Azure will be considered to
host the customer profile service in the cloud.

MANAGERIAL IMPLICATION

Today’s business environment is dynamic and agile business processes and IT services
implementation is vital for success (Qui, 2007). Utility and service computing is a promising
challenge for both the business and ICT fraternity. Organisations are now implementing
software and hardware that can be accessed and utilised on demand by many consumers, and
consumers only pay for what they have used (Buyya et al., 2009; Brantner et al., 2008).
Online businesses implement customer profiles to determine customers’ needs and
preferences.

Customer profiling as a service can assist businesses both as service provider and service
consumer. Customer profile service consumers will not need to handle security issues, which
is one major concern in customer profiling. Furthermore, implementation complexity will be
handled by the service provider. Scalability and reliability can be guaranteed when a
customer profile is accessed and utilised as a service (Buyya et al., 2009). Customers’
profiles can be accessed on demand by e-commerce systems from anywhere, anytime and e-
commerce businesses need not ensure availability, as customers’ data is stored securely in the
cloud (Brantner et al., 2008; Microsoft.com, 2009). The Internet service provides time and
cost savings for both existing and upcoming e-commerce businesses.
Generic customer profile as a service can help online businesses to integrate customers’
needs and preferences, since the profile can be accessed by a number of authorised
businesses. Personalisation, recommendation and customisation can be conducted across a
number of websites for a customer without the need to register, as general characteristics of a
particular customer will be centrally located and kept in the customer profile service hosted in
the cloud.

Managers for online businesses can adopt the method that this research proposes. Customer
profile service providers can gain a competitive advantage from existing online businesses
who would like to use the service on demand. On the other hand, customer profile service
consumers will save time and money, since there would be no need for implementing and
maintaining their own customer profiling systems.
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