fractal analytics ace solution

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Proprietary Information of Fractal Analytics Inc.

This document contains proprietary and confidential information of Fractal Analytics and subsidiaries (Fractal) and shall not be reproduced or transferred to other documents, disclosed to others or used for any purpose other than that for which it is furnished, without the prior written consent of Fractal. It shall be returned to Fractal upon request.

Analytics Center of Excellence

June 2011

2Confidential | Copyright © Fractal 2011

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Agenda

Key notes from the last meeting

ACE Solution Approach

Proposed Team Composition

Time Lines

Investment Structure

Appendix


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Institutions need to move towards intelligent approaches to make sense of data

Analytics has been instrumental to Capital One, which has exceeded 20% growth in earnings per share every year since it became public. – HBR Jan 2006

Data Information Intelligence

High

Low

Business Impact and

Competitive Advantage

Standard Reports

Ad hoc Reports

Query Drill Down

Alerts

Statistical Analysis

Forecasting

Predictive Modeling

Optimization

What happened?

How many, how often, where?

Where exactly is the problem?

What needs attention?

What is this happening?

What if these trends continue?

What will happen next?

What’s the best that can happen?


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To compete on analytics, organizations need to make it part of their DNA

How do I transform my business through Analytics?

How do I set up a business intelligence or centralized analytics unit?

How do I operationalize analytics in every instance? How can I use our analytics for day to day operations?

How do I achieve greater innovation through use of analytics?

How do I make information “come alive” in my business?

Institutionalizing Analytics

Operationalizing Analytics

Solving Problems,Optimization

Predictive Analytics & Models

Actionable Insights


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Proposed Solution Approach

Inception of a dedicated analytics center called the Analytics Center of Excellence (ACE) for Client

Built on the foundations of:

Dedicated Experienced Analytics Team

Core Analytics Process

Supported by the pillars of:

Proprietary Tools and Techniques

Quality Management Processes

Project/People Management Expertise

Project Review Mechanisms

Value Based Compensation Structure

Dedicated and Experienced Analytics TeamWell trained, talented and responsible people

ACE

Del

iver

y M

anag

emen

t P

roce

sses

Core Analytics Processes CRISP DM Methodology, Project Management Methodologies

Value based fee structure Strong Cost Benefits Pay for Performance

Qua

lity

Man

agem

ent

Pro

cess

es

Pro

duct

ivity

Man

agem

ent

Pro

cess

es

Peo

ple

Man

agem

ent

Pro

cess

es


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Establishing ACE

ACE mandate

Executive sponsor

Guidance (steering) team

Business case

Agree on management strategy

Mandate for ACE

Business Diagnostic

ImplementationProject

IdentificationForm Teams

Understanding organization needs

Conducting Business Intelligence assessments

Organizational readiness assessment

Identify projects based on Business diagnostic from IT, People and change management perspectives

BA standard practices, tools, and metrics

BA education and training

BA consulting services

ACE planning workshop

Execute projects

Review project and ACE function

Realign ACE scope

Fractal’s Role ~Implementer

Fractal’s Role ~Consultant

Fractal’s Role ~Consultant

Fractal’s Role ~Implementer

Fractal’s Role ~Facilitator


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Setting the mandate for ACE

Conduct a ACE Kick-off Workshop where Fractal facilitates the process of defining the vision of ACE for the Client

Agree upon the broad scope of activities for ACE

Form the Steering Committee

Present the business case for ACE

Large-scale organizational change of this nature typically involves:

Restructurings

Cultural transformation

New technologies

New partnerships

Visioning

Executive Sponsorship

Political Management

Strategy

Sense of Urgency

Guiding Team

Communication for Buy-In

Short Term Wins


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Starting off with Business Diagnostics

What is Business Diagnostics?

Business diagnostics is an assessment suite to study, analyze and improve the various practices/ initiatives of the Client

It aims to study the Client requirement in terms of:

Business Objectives

IT and Infrastructure

Data Availability and Quality

Manpower

Management Support

How can it help you?

The Business Diagnostics provides the Client :

An insight into its various functional areas, its strengths and key areas of improvement

A benchmarking against the best in class

A gap analysis to aid the Client in designing the roadmap to set up ACE


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The Methodology comprises of 3 key modules

Analysis Module

Analysis of the Client’s practices

Bench marking against the best in breed & identifying areas of improvement

Consulting module

Final recommendations report presentation

Suggested approach and best practices to the Client

Fractal OnsiteAssessment

Fractal HealthCheck Engine

Study Module

On-site study and assessment of current practices of the Client

Study of systems, resources, strategies and analysis done by the Client

Fractal Business Diagnostics Report


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Solution Construct: Critical Assessment Areas

Readiness to accept change Senior Management buy-in

Data Capture techniques Data Storage facilities Data Consolidation techniques Data feed to reporting cubes

Current Structure and its alignment to support analytics

Roles and KPI’s, related to analytics

Mini-Projects required to bridge the gap for establishing ACE

Existing Segmentation frameworks

Applicability of existing segmentation

Existing tools for data management

Extent of usage of data in strategy and operations


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Project identification and prioritization as per Client requirement

Conduct a ACE Kick-off Workshop session to finalize the charter and plans, and gain consensus on an implementation approach

Crate an Analytics calendar based on the priorities within the organization

Start reviewing projects and function and realign scope if required

Self-service model

appropriate user

Create and promote standard

processes

Pool of trained

specialists

Guiding Team

Offer flexible staff resources

Adoption of standard

performance metrics

Implementation Challenges


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Forming Teams

Form action teams to:

Develop business analysis practice standards

Provide for education and training

Mentoring and consulting support

Secure the needed facilities, tools, and supplies

Develop the ACE Business Plan/Operations Guide describing:

Implementation strategy

Phases

Deliverables

Training

Technology

Consulting services

Infrastructure requirements


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Fractal Team

Proposed Team Composition

A team of Engagement Manager, Project Manager, Statistical Analysts, Data Analysts offshore.

Proposed Model

Client Team

Project SponsorEngagement

Manager (Onsite)

Escalation

Client SPOC

Project Manager

Daily working relationship

Statistical Analysts

Data Analysts


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Roles and Responsibilities

Position Role on TeamPrimary Points of Interaction

Engagement Manager

Responsible to Client and Fractal for success of the project.

Single point interface between Client and Fractal, and responsible at the highest level for meeting all client requirements

Responsible for liaising with the onshore team of Client and leading the offshore team to deliver to the requirements of Client

Project sponsor

Business teams and clients of the Analytics group

Project Manager

Responsible for leading and managing delivery teams of data modelers and analysts

Understanding and converting client requirements into well stated and clear deliverables and tasks for analysts and modelers

Ensuring timely deliveries within the quality parameters

Client SPOC

Engagement manager

Team of statistical modelers and data analysts

Statistical Analysts

Responsible to project managers for delivering against specifications

Understanding client requirements and converting them into analytics deliverables

Responsible for building the statistical models, preparing reports and presentations on analysis and modeling

Project Manager

Engagement manager

Database Analysts

Responsible for managing all aspects related to database management in an analytics engagement

Responsible for understanding data availability and quality, data extractions, preparation, cleansing and transformation

Project Manager

Engagement manager


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Resource Management

Initiation of ACE Implementation

Establishment of ACE

Loca

lized

A

naly

tics

Ana

lytic

al

Com

pan

y

Fractal Resources

Client Resources

Time

Day 0 Day 1000


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Possible Business Models

Co

st o

f D

eliv

ery

Control & Risk / Investment for Client

High

Low

Low High

BOT (Build, Operate & Transfer)

Captive Center

How it works?Fractal will build, operate and manage the CoE and provide Client with option

to assume ownership after a pre-defined period

How it works?Fractal will build and handover the captive

centre to Client or we will provide resources for the

centre on time and material basis

Complete Outsourcing

How it works?Fractal provides a fixed capacity team in Fractal

office for Client to execute analytics

projects


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Advantages / Disadvantages

Strategic Implications Complete Outsourcing BOT Captive Center

Initial Investment Low Low to Moderate Very High

On-going operating cost Medium Low to ModerateHigh

Strategic option value Low High High

Local expertise None None High

In-house capability to manage offshore

Low Low Required

Process maturity required Medium Low High

People management NoneNone (required when

transfer happens)High

Security & IP concerns Potential Low Low


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Timelines

*As per scope of work identified during business diagnostics.

Project Identification

1 Week

Fractal’s Role ~ Consultant

1 Week

Fractal’s Role ~ Consultant

Team Formation

8-12 Weeks*

Fractal’s Role ~ Implementer

Implementation

4 Weeks

Fractal’s Role ~ Implementer

Business Diagnostic

2 Weeks

Fractal’s Role ~ Facilitator

Vision for ACE


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Investment Structure

Terms & Conditions:

T&E for the entire project will be charged at actual

Any taxes and levies, as applicable, will be charged at actual

Our fees do not include cost of data purchase (if required)

These payment terms are valid for a period of 30 days from the date of this proposal

At the end of each month, Fractal will invoice Client for the services provided in that month and Client will pay Fractal as per its standard payment terms

Module Pricing

Workshop for defining Vision for ACE

Business Diagnostic

Project Identification and Team Formation

Execution and Implementation


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Appendix: About Fractal


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Dedicated industry specific practices

Financial Services

Consumer goods and Retail

Manufacturing & Technology

Consistent recognition from Gartner and Black Book of Outsourcing global top 10 ratings for 2008, 2009 and 2010.

First Retail Banking engagement in 2001

Served more than 90 Banks worldwide as analytics providers or strategic partners to Payments and Insurance industry majors.

PCI compliant infrastructure and dedicated FTE team of 90 consultants

Fractal helps organizations across the world compete better through institutionalization of analytics and decision management

Founded in 2000 in India

Fully owned subsidiaries in Asia Pacific , Britain and United States.

Over 20 Fortune 500 relationships across Financial services

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New York

London

New Delhi Bay Area

Mumbai

Singapore


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Solution Dimensions

We have classified the Analytical Solutions for Financial Institutions on the basis of the following dimensions:

Type of Solution

Products / Software

Predictive Analytics

Dashboards / Reports

Diagnostics / Statistical Analysis

Complexity

Complexity has been defined in terms of ease of use of the analytics solutions for Client.

High

Medium

Low

Impact

High

Medium

Low

Data Sources

Data available with Client

Multiple (Additional Data may be required)

Implementation Timeframe

Specified in weeks show regular (R)

P

PA

DB

DG

B

M

H

M

L

W

H

M

L


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Menu of services for Financial InstitutionsA

cq

uis

itio

nC

us

tom

er

Ma

na

ge

me

nt

Op

era

tio

na

l

Eff

ec

tiv

en

es

s

Risk Marketing Executive Management

Credit Scoring

Deposit behavior scoring

PA H M 12M

P M L 4M

Campaign &Response Mgmt

Activation andOn boarding

PA M H 8RM

PA M H 8RB

Marketing MixManagement

PA H H 8M

Segmentex DG M M 8B

Behavioral RiskManagement

Collections & Recoveries

PA H H 12B

PA M H 12M

RevenueEnhancement

ProactiveRetention

PA M H 12RB

PA M H 12RB

Customer Lifetime Value

PA H H 24M

Credit Risk Dashboard

Portfolio Risk Management

DB M M 4RB

DG H M 12B

CampaignOptimization

Spend Profiling & Pockets of Value

PA H H RM

DG M M RB

Business Diagnostics DB H L 4M

Payment QualityAnalysis

DG M L RB


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Risk Solutions for Customer Acquisition

Credit Scoring

A scorecard based approach for evaluation of credit worthiness of an individual. On the basis of parameters such as past transactional behavior, profile amongst others.

Deposit Behavior Scoring

The deposit behavior scorecard looks at risk quantification across Liability Customers for Asset products acquisition.

Type of Service

Complexity

Impact

Data Sources required



High

Medium

Multiple

12 Weeks

Type of Service

Complexity

Impact



Product

Medium

Low

Multiple

4 Weeks


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Marketing Solutions for Customer Acquisition

Campaign & Response Management

Campaign & Response Management is a set of processes designed towards usage of data analysis for creating and execution of marketing campaigns and evaluation of response generated from them.

Activation and On boarding

A predictive analytics based solution for inducing usage through targeted campaigns and Incentivization programs. Further dimensions to the same process are opportunity / risk assessment studies if activated.

Type of Service

Complexity

Impact




Medium

High

Multiple

8 Weeks (R)

Type of Service

Complexity

Impact




Medium

High

Client

8 Weeks (R)

Segmentex

Customer segmentation solution in a 18 box framework that provides a portfolio snapshot, enables identification of revenue opportunities. Also acts as a diagnostic tool that helps create strategies for value enhancement.

Type of Service

Complexity

Impact



Diagnostic

Medium

Medium

Client

8 Weeks


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Performance Assessment for Customer Acquisition

Marketing Mix Management

Assessing the impact of marketing activity on overall growth of business. Determine the ROI of marketing and “Due-To”s of growth across each marketing activity.

Type of Service

Complexity

Impact




High

High

Multiple

8 Weeks


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Risk Solutions for Customer Management

Behavioral Risk Management

Analytic framework based dynamic credit limit / pre-approved offers management system. The approach relies on behavioral scorecards developed on client data in order to allow differential credit limits and pre approved expenses across the customer base.

Collections and Recoveries

It uses debtor’s historical behavior information and correlates that to transaction history, bureau information, card characteristics and demographic data. Behavioral and demographic information is used to segment the portfolio of debtors and predict their behavior in the near future in order to ascertain delinquency levels at a portfolio level.

Type of Service

Complexity

Impact




High

High

Client

4 Weeks

Type of Service

Complexity

Impact




Medium

High

Multiple

12 Weeks


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Marketing Solutions for Customer Management

Bespoke Segmentation Analysis

Client specific segmentation analysis of transactional behavior within the card portfolio. Key aims of the analysis are:

Identification of customer segments for targeted marketing initiatives

CRM endeavors such as usage enhancement, loyalty/customer retention and value migration through up selling

Type of Service

Complexity

Impact



Dashboard

High

Medium

Client

12 Weeks

Revenue Enhancement

Predictive Analytics based broad approach that helps create model based, specific programs for revenue impacting activities such as card spends (Fee, Balance Transfers , Retail ,Cash withdrawal) and revolving charges (Fines, Interest).

Cross Sell / Up Sell programs are executed on the basis of response modeling for identification of customers showing propensity to respond to offers for other products offered by the Client.

Type of Service

Complexity

Impact




Medium

High

Client

12 Weeks (R)


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Marketing Solutions for Customer Management (Contd.)

Proactive Retention

A response model driven attrition strategy that enables identification of profitable / high potential customers on the basis of parameters and helps in strategy formulation in order to secure the most profitable customers.

Type of Service

Complexity

Impact




Medium

High

Client

12 Weeks (R)


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Performance Assessment for Customer Management

Customer Lifetime Value Management

Assessment of Customer relationship potential in accordance with their expected relationship life cycle, in order to provide a reference framework for a wide variety of processes such as customer acquisition, sequencing of campaigns and attrition management.

Type of Service

Complexity

Impact




High

High

Multiple

24 Weeks


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Risk Solutions for Operational Efficiency

Credit Risk Dashboard

A comprehensive credit risk management dashboard which incorporates “forward” looking indicators and disseminates information on Logs Originations Reports Portfolio Performance Vintage analysis Collection Reports Forecast portfolio losses

Type of Service

Complexity

Impact



Dashboard

Medium

Medium

Client

4 Weeks (R)

Portfolio Management & Basel II

Fractal has comprehensive Basel II Health Check solution suite for Financial Institutions. The suite includes a Gap analysis, Data readiness tool kit, Basel II set up tool kit and MIS framework.

Type of Service

Complexity

Impact



Diagnostic

High

Medium

Client

12 Weeks

Payment Quality Analysis

Payment Quality analysis provides a qualitative assessment of transactions undertaken by a member’s customer base. Members are able to benchmark their performance on key parameters such as card declines, charge backs and referrals against payment quality norms.

Type of Service

Complexity

Impact



Diagnostic

Medium

Low

Client

Regular


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Marketing Solutions for Operational Efficiency

Campaign Optimization

Campaign Optimization Engine optimizes offer channel assignment across customers and programs keeping in mind the practical constraints, maximizing profitability

Pockets of Value

Comparative analysis for identification of key growth and value opportunity areas on the basis of competitive mapping of Clients across dimensions such as:

Spend levels on merchant categories across customer segments

Types of transactions

Type of Service

Complexity

Impact




High

High

Multiple

Regular

Type of Service

Complexity

Impact



Diagnostics

Medium

Medium

Client

Regular


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Performance Assessment for Operational Efficiency

Business Diagnostics

An objective third party evaluation of Client strategy It aims at identification of gaps and provide recommendations for increasing the ROI on the basis of current processes. Key components evaluated include:

Data warehouse

Customer segmentation

Predictive modeling

Management Information Systems

Campaign Management

Organization Structure

Type of Service

Complexity

Impact



Dashboard

High

Low

Multiple

4 Weeks

United States | United Kingdom | Singapore | India

www.fractalanalytics.com

For further details contact:

Fractal is a leading provider of consumer analytics to Insurance carriers, Consumer Banks, CPG and Retail

companies. Fractal's analytical solutions help companies across the globe enhance profitability by powering their

customer management efforts with scientific decision making.

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Nirmal Palaparthi

[email protected]

+65 91280581

http://www.fractalanalytics.com/

mailto:[email protected]

fractal analytics ace solution

Business

use of analytics

business case

business objectivesit

business impact

business diagnosticswhat

dedicated analytics

management perspectives

experienced analytics