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------------------------------------------------------ According to Gartner senior research analyst Bill Gassman, today's software is more sophisticated and expensive than early tools that just analyzed Web server log files. He said a Web analytics implementation today often follows the slow, gradual course of a company's evolution because analytics software sometimes offers more than a business is ready to handle. "The value is in integrating or correlating (Web analytics data) with other business data, and that is not only difficult because integration is in itself difficult, but they may not have the business systems in place.... They may not exist," Gassman said. The integration challenge LowerMyBills.com in Los Angeles, Calif. had worked with analytics since its inception in 1999, but never found the right solution to fit with its hybrid business model that combines e-commerce and bill management services. "Our challenge is getting the right people to the Web site and having a selection of plans that works for them," said Olivier Chaine, LowerMyBills.com's vice president of operations. "People have completely different needs and we didn't have a way of understanding those needs." Working with analytics vendor NetAcumen, the company successfully combined customer relationship management (CRM), trend recognition, and return-on-investment analysis. Data is integrated with back end systems, product engines, and marketing campaigns while still enabling 70% of the company's workers to access data individually. While it may be tempting to spend cash for a robust, profile-based personalization system early in an enterprise's life cycle in order to build customer relationships, Gassman said developing companies should do so cautiously. "Clients should be experimenting" early on, said Gassman, "trying to see where analytics make sense." He said trial and error with basic trend analysis software looking at page views and unique visitors is often a first step before companies commit to integration with back-end systems. Gassman said a business may be ready for a more integrated implementation when the Web channel contributes at least 3% in overall revenue, a customer service desk is in place to answer questions via the Web, established planning processes are already in place to benefit from more detailed Web analytics, and a e-CRM or business intelligence system is also in place. There are exceptions. "In the retail and finance industries, we're seeing clients achieve a lot more results" with early adoption, Gassman said, because the companies in those industries have defined their business models and made strong commitments to e-commerce. GetMusic.com in New York provides content to users and sells music-related goods, but the Accrue customer focuses its Web analytics efforts on unique visitors, page views, and time spent online. Research manager Derek Monteverdi said that it would be advantageous to integrate Web analytics with other systems like CRM, but it is an expensive proposition. "I think it's important to develop other aspects of CRM," said Monteverdi. "I think in order to make a large investment in Web analytics, you need to have those other areas developed." The changing market The wave of consolidation that has washed over the industry recently is another reason to implement cautiously. Three high profile firms, Accrue, webTrends, and NetGenesis, have all been involved in acquisitions during the past 18 months. "Where we think this market is going is we don't think it's a market. It's a temporary market, becoming just another feature in CRM systems, just another feature in business intelligence," said Gassman. For that reason, some application service providers (ASPs) are trying to capitalize by offering flexible analytics systems that can be linked to other business processes but leave room for growth. NetAcumen, based in San Francisco, is one of several ASPs attempting to provide hosted analytics applications on a subscription basis that integrate with other existing and future business applications. "The visitor may be shopping on the Internet, looking at products, but they may actually conduct the commerce though a local store," said NetAcumen CEO David Silver, "so tying the Web activity back to the internal corporate systems helps companies get a clearer picture of how they can actually up-sell particular products." Regardless, any enterprise -- large or small -- should make some investment in Web analytics. According to Gassman, that investment will be relative to the number users and systems that need to touch the data. "Users can include IT operations, application developers, and business managers. The higher up the food chain the data goes, the more the enterprise will need to invest, both in product cost and in integration effort," he said. MORE ON THIS TOPIC: SearchEBusiness.com has Best Web Links on demographics and user analysis. SearchCRM.com has a listing of Best Web Links on CRM analytics. SearchWebManagement.com has a collection of Best Web Links on outsourcing vs. in-house servicing. Read other articles by Eric B. Parizo.