business analytics workshop presentation final
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MNP Technology ConsultingPresents:
Business Analytics: Top Line Growth and Bottom Line Results
May 8, 2012
Introductions - FacilitatorsBrian BeveridgePartner, Technology Consulting Leader
MNP LLP
Shelley LeginCredit Union Consulting Lead
MNP LLP
Agenda
• 1:45 – 2:45 – Presentation• 2:45 – 3:00 – Interactive Session• 3:00 – 3:15 – Q & A
ObjectivesGive Credit Union Executives and Board Directors an Understanding of:
1. What Business Analytics is
2. How could it be applied to Your Credit Union
3. How could you get started on a Business Analytics Project
Does anyone have any other Objectives?
Topics1. Introduction
2. A Business Analytics Primer
3. The link between Business Success and Business Analytics
4. How can Business Analytics address the Key Issues in Credit Unions?
5. Is there an App for That? (Mobile Business Analytics)
Topics6. How to get started with Business Analytics
projects
7. Interactive Session
8. Q & A
What is Business Analytics?
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We live in a Connected, Instrumented, Data-Rich
World
Nissan Leaf Dashboard
My Ski Goggles
What is Business Analytics?
“Business Intelligence” Term Coined by Gartner in 1989
– Simply defined as “using information effectively to make better decisions”.
What is Business Analytics?Gartner’s Emphasis Today: “Corporate Performance Management “
CPM means getting a better finger on the pulse of an organization to make a better, more accurate, and more timely assessment of how an organization is doing. Enterprises need to move away from asking, “How did we do last month or last quarter” to “How are we doing right now” as well as “How will we do next week”
MNP’s Definition of BusinessAnalytics
Improving our client’s business results by providing business insights to all employees leading to better, faster, more relevant decisions
The link between Business Success and Business Analytics
Information is the Key to a New Wave of Opportunity…
2020
35 zettabytes
as much Data and ContentOver Coming Decade
44x
Sources:• The Guardian, May 2010• IBM Institute for Business Value, 2009• IBM CIO Study 2010• TDWI: Next Generation Data Warehouse Platforms Q4 2009
Business leaders frequently make decisions based on information they don’t trust, or don’t have
1 in 3
83%
of CIOs cited “Business intelligence and analytics” as part of their visionary plansto enhance competitiveness
Business leaders say they don’t have access to the information they need to do their jobs1 in 2
But Businesses are Challenged to Leverage it….
Organizations embracing Business Analytics have the answers …
Top Performers are more likely to use an analytic approach over intuition*
Source: Analytics: The New Path to Value, a joint MIT Sloan Management Review and IBM Institute of Business Value study. Copyright © Massachusetts Institute of Technology 2010.
Organizations that lead in analytics outperform those who are just beginning to adopt analytics
*within business processes
5.4x3x
Winners in the Financial Industry
Customer analytics
Using advanced analytics to profile and segment target customers, First Tennessee Bank improved marketing effectiveness by:
600%
Operational efficiency
Using financial analytics to streamline statement creation, First Command accelerated month-end updates by over:
500%
Risk management
Using business intelligence to create an online credit tool, Argos generated an annual business value for each customer of:
$855K
A Business Analytics Primer
Problems with Traditional Reporting and Analysis
• Predefined Reports built into specific applications such as Financials, HR, Point of Sale, etc.
• Some capability to customize layouts and parameters but typically limited
• Biggest limitation has been the ‘scope’ – i.e. You cannot easily combine and analyze data across application boundaries – i.e. HR and Financial information combined in the same report
• Limited ability to ‘model’ and try different scenarios• Changes often require IT to customize which costs
time and $$
Page 19
Traditional Reporting and Analysis
Page 20
Does a Pretty Good Job
Typically not “real time”
Typically – not
addressed
How arewe doing?
How arewe doing?
What shouldwe be doing?What shouldwe be doing?
Why?Why?
Analytics
Business Analytics Helps with Corporate Performance Management
■ Performance
■ Decision Making
■ Information
■ Data
BA Helps with Corporate Performance Management
What if you had all the answers to win?
Which customers are thinking of leaving?
Which transactions
are suspicious?
How is Margin
Compressionaffecting my credit union?
How can I extract
insight from all of my
information?
The ultimate differentiator today……is being able to make more informed choices with confidence, to anticipate and shape business outcomes.
The ultimate differentiator today……is being able to make more informed choices with confidence, to anticipate and shape business outcomes.
A Taste for Analytics
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Guided Exploration of Your Data
• Enables guided exploration of information that pertains to all dimensions of your business
• Continuous exploration and investigation of past performance to gain new insights and aid in business planning
• Facilitates complex analysis and scenario modeling easily and quickly without requiring IT resources
• Gets to the “why” behind an event or action to improve business performance.
• Provides navigation from summary to detail levels of information effortlessly
AnalyticReporting
Trending ScenarioModeling
PredictiveAnalytics
Business Users
Line Managers Executives
Business Managers
Financial Analysts
Business Analysts
Why?
Immediate, visual insight into business performance
Self-service analysis of trends and patterns
• Top down view• Drillable reports• Sort top & bottom• Review then query
• Budget Variance• Product ranking
• Personal exploration• Compare & contrast• Rotate and nest• Work disconnected
• Sales trend analysis• Market analysis
• Model scenarios• Compare
scenarios• Save versions
• Financial analysis• Profitability
analysis
• Uncover patterns• Statistical calcs• Mine data/text• Predict outcomes
• Fraud prevention• Churn analysis
How are we doing?
Insight to determine strategy, allocate resources and set targets
What should we be doing?
The Four Styles of Analysis
”Drill-Down” ”Slice and Dice” ”What if” ”What will be”
Business Users
Line Managers Executives
Business Managers
Financial Analysts
Business Analysts
Why?
Immediate, visual insight into business performance
Self-service analysis of trends and patterns
How are we doing?
Insight to determine strategy, allocate resources and set targets
What should we be doing?
The Four Styles of Analysis
Loans Systems
Banking Systems
HR Systems Marketing Systems
Financial Systems
Dashboards Scorecards Reports Queries Analysis Contentanalytic
s
Predictivemodeling
Planning/ budgeting
Business Analytics platform
Business Analytics Application Components
Business Analytics Continuum
Analytic Reporting
Trending
Scenario Modeling
Predictive Analytics
Business Analytics Applications
Provides full breadth of report types Delivers consistent information across all types of
report output Can be personalized and targeted Enables collaboration across users, communities
and with IT Provides access via email, portal, MS-Office,
search and mobile devices etc
Multi-Dimensional Analysis Provides guided exploration across multiple
dimensions of information Performs complex analysis and scenario modeling
easily and quickly Gets to the “why” behind trends to reveal
symptoms and causes Moves from summary level to detail levels of
information effortlessly
Analytic Reporting
Provides at-a-glance, high impact views of complex information
Helps quick focus on issues that need attention and action
Are highly visual and intuitive
Combines information across disparate sources
Scorecards
Provides instant measurement relative to targets and benchmarks
Aligns decisions and tactics with strategic initiatives
Supports scorecarding methodologies
Ensures ownership and accountability
Dashboards
Business Analytics Applications
Scenario Modelling
Model and compare scenarios
Reorganize, reshape Multiple versions Financial and profitability
analysis Exploration and ‘what-if’
scenario modeling
• Analyzes patterns found in historical and current transaction data
• Analysis into attitudinal survey data to predict future outcomes
• Enables more proactive decision making, driving new forms of competitive advantage:– How do I predict outcomes
resulting from my decisions?– How can I predict demand and
allocate resources to ensure I am delivering services effectively?
– How can I find the patterns in vast amounts of data?
Predictive Analytics is Transformation Technology
Single Data Model
Summary – Business Analytics in Context
Analysis & Reporting
Report
ScorecardAnalyze
Forecast
Plan
What happened?
What is happening?Why?
What will happen?
What do I want to happen?
Planning, Budgeting, Forecasting & Consolidation
Move from “Sense and Respond” to “Predict and Act”
Sense and respond
Instinct and intuition
Automated
Skilled analytics experts
Back office
Predict and act
Real-time, fact-driven
Optimized
Everyone
Point of impact
Lack of Insight
Inability to Predict
Inefficient Access
Variety
Volume
Velocity
How can Business Analytics address the Key Issues in Credit Unions?
Key Business Issues Facing Credit Unions
1. Address Margin Compression
2. Develop a strategy for consolidation
3. Enhance regulatory compliance
4. Prepare for industry transformation
5. Attract new members
6. Leverage IT to improve productivity and profitability
7. Attract, manage and retain top talent
8. Protect your members from fraud
Marketing...could predict the right offer for the right member at the right time?
Relationship management
...could consider the risk and
profitability of the entire member
relationship when pricing new deals?
Executive leaders...could make better business decisions using accurate data across all time horizons
Risk and finance...could streamline compliance and understand risk exposure across businesses and regions?
Payments ... predictive analytics could detect and prevent a wire transfer identified as high probability of fraud?
Branch management...could understand which
branches or products were performing the best?
Credit Union What ifs…
The Irony is…• You probably have more than enough DATA to
get the answers…• But you can’t access it, analyze it, or
communicate it well enough• You understand people who have already done
business with you vs those that have not• “Myth Busting” – many assumptions may not be
supported by the data
No Shortage of Internal Data
Financial Transactions- Deposits/Withdrawals- Loan Pmts- Interest
Branch Data- Members by Brach- Revenue by Branch- Product Mix by Branch
Member Data- # of members- Demo Information- Location- Accounts
Financial Products- Revenue- Costs- Location- Accounts
Issue – How to transform it into INFORMATION and ACT on it
Executive - Strategic Planning
Middle Managers - Management Control
Front-Lines - Operational Control
Internal “Hard” Data External “Soft” Data
The Data isn’t always where its needed
The greatest challenge of the computer industry is to learn how to build information bases, not databases. The really important information cannot be easily quantified and exists outside the organization.
- Peter Drucker (1993)
Increase flexibility and streamline operations
Create a Member- focused Credit Union
Optimize enterprise risk
management
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$
The Analytics-Driven Credit Union
How can I ensure that our pricing is competitive and
profitable?
How do I retain my best members?
Why are my marketing response rates so low?
Which are my best performing branches?
What products/services attract mass affluent
members?
How do I find the optimal balance between service
and cost of delivery?
Who are my ideal members and how do I
attract them?
How can I improve service levels and the knowledge
of my front-line employees?
How do I make more members highly
profitable?
43
?
The Member View
Create profitability analysis and forecasts Perform “what if?” scenario analytics Calculate profit and loss (P&L) at the
account level Increase cross and up sell opportunities Analyze historical information to:
Predict customer propensity to buy Develop lifetime value models Create account retention strategies
Develop strategies to improve retention and wallet-share of profitable customers
Reduce servicing costs by matching service levels to customer value
Member Profitability Analytics
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Mine historical member information to determine patterns and segmentation
Use predictive models to determine likelihood of response to offers or defection
Generate reports and alerts on customer interactions and portfolios
Incorporate unstructured text data into the analysis to better capture customer sentiment
Predict which customers are likely to leave and what will keep them
Use marketing dashboards to track and monitor response and sales created
Improve marketing cross-sell efforts and reduce execution costs
Marketing Optimization
Delivers an intuitive, centrally controlled pricing tool that considers complete relationship value and risk to improve pricing consistency for both credit and non-credit deals
Provides bottom-up and top-down planning capability and automated approval workflow
Enables quick changes and consistent roll out with centrally controlled pricing model
Provides dashboards for relationship managers, lending officers and senior management
Enables relationship managers to quickly and consistently evaluate risk and profitability of new business and increases management visibility into lending book
Relationship Pricing
Includes paperless, real-time self-service reporting and analysis of account holdings and recent activity
Delivers Wealth Manager dashboard with service process monitoring, reporting, analysis and forecasting
Provides online or mobile client statements with portfolio summary, performance analysis and asset allocation
Improves relationship manager knowledge and customer service
Client Servicing
Risk Management View
What operational risks can be reduced?
How do I eliminate operational silos to get an enterprise view of
risk?How do I inform
business users about the risk impact of decisions?
How do I ensure that pricing models are risk
adjusted?
How do I respond more efficiently to evolving
regulatory requirements?
How do I operationalize risk appetite?
Can I perform risk scenario analytics?
How do I integrate governance, risk and
compliance processes?
Could I benefit from fraud detection and
credit risk analytics?
48
?
Provides an integrated enterprise risk solution to help reduce risk exposure and simplify regulatory response with a single system of record
Enables the identification, management, monitoring and reporting of operational risks and regulatory compliance initiatives, including policy management and IT
Improves processes with fully integrated risk and compliance data Risk control self-assessments Scenario analysis Key risk indicators Loss event database Policies and regulatory mandates Harmonized control framework
Provides root cause analysis
Governance, Risk and Compliance
Includes business intelligence to provide finance-integrated, actionable risk dashboards, scorecards, and reporting
Enables risk adjusted financial planning, business modeling, strategy selection and initiative planning
Scenario analysis for all risk classes (credit, market, liquidity, operational, counterparty)
Risk optimization through risk and finance integration, risk appetite management and communications, strategic planning, and risk-adjusted relationship pricing
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Risk Insight & Optimization
?
What’s the best approach for IT cost
allocation?
Where can I cut costs without affecting
revenue?
What branches and relationship managers are
my best performers? Why?
How do I streamline my financial
planning/budgeting process?
How do I improve tracking/ monitoring of high-value
payments?
How do I deliver real-time insight at the point of
impact?
How do I provide better executive visibility into
enterprise performance?
The Streamlining View
Enables driver-based, rolling branch financial planning at the product and customer segment level
Provides staff planning so headcount expenses can be easily understood and controlled
Monitors and analyzes key revenue, cost and profitability measures by branch, product type, product, member segment and even household
Branch Performance Management
Monitors transactions by counterparty, geography, asset class and transaction type
Identifies trigger events for interventions Implements governance of key
performance measures and targets Predicts traffic, counterparty weakness
and bottlenecks Builds agile, fully costed plans and
forecasts to optimize pricing/chargeback tariffs
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Payments Monitoring and Analysis
Is there an App for That? (Mobile Business Analytics)
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Is there an App for that?
You’ve seen the headlines…
• Today, over 80% of the Fortune 100 are already deploying or piloting iPad -(NetworkWorld 2011)
• “Mobile BI has the potential to significantly expand the population of BI users to include a much more mainstream audience” -(Gartner 2011)
• “Forty percent of devices that information workers use to access business applications are personally owned” – (IDC 2011)
Why Mobile Business Analytics?
• Very broad reach• “Real Time” accessibility of information
and decision making• New, immersive experiences and
visualizations• New possibilities for Collaborative
Business Analytics
How to Get Started with Business Analytics projects
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How to get started with BA?• First and foremost – You need to realize that
Business Intelligence is not ‘Out of the Box’ unless plugging into ERP or other ‘Single Application’ Solution
• There is typically design and development work involved
• Depends heavily on your data and application mix as well as your objectives/metrics
• Invest in “Up Front” planning and “selling” of the project
What has to go Right on BA Projects?
1. Executive Sponsorship and Commitment
2. Planning
3. Trust in the Data – Data Validation
4. Proper Roles
5. Change Management
6. Sustainment
Strategy Based Analytics Approach
Strategies
Measures
Analytics Applications
Decision Process
Plug Into CU Management Process
1. The strategic management process where strategic issues are refined and implications discussed.
2. In the operational management process corrective actions are taken and implications are discussed.
3. In the daily management processes corrective actions are taken.
In all three processes, there is an ‘evidence based’ or analytics-based review of performance indicators
Getting Started with Analytics Projects
1. Start with an Executive Discovery Session
2. Review Business Strategy
3. Build the linkages from Strategy to Measures
4. Determine success indicators
5. Identify process and project fitness – Readiness Assessment
6. Build the scorecard/measurement process
7. Gather Data from Operational Systems
8. Build the Views, Reports, Analyses, and Dashboards
Readiness Assessment
Asks the following questions:
1. Do you have executive support?
2. Are the goals defined?
3. Can your staff handle the change?
4. Do you have the data needed?
5. Can your systems support BA?
6. Can your IT staff handle this?
Avoid Common Pitfalls
1. Lack of Planning You need a map of where you're hoping to go – and the team to get you there.
2. Under-Estimating the Data Access/Validation phases of the project.
3. Lack of Resources – You will need:• Business Expert• Data Expert• Business Analytics Solutions Expert
Avoid Common Pitfalls
4. Lack of responsibility. If you are going to make critical decisions on the data in the BA system, you need at least one staff member who takes responsibility to be the ‘Data Validation Cop' of content.
5. No Change Management. You need to get people prepared for the change in their roles and responsibilities as well as the challenges of having data/results more visible.
6. Lack of Ongoing Sustainment. You need to constantly feed the solution with data and adjust the metrics as the business changes.
Interactive Session
• Business Analytics – Credit Union Examples
• Mobile / iPad Analytics Solutions
Questions
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Thanks for Participating
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Follow Up
• Brian Beveridge
• (204)-775-3500 ext 4602
• Shelley Legin
• (778)-772-8009