Business analytics workshop presentation final
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This document outlines an agenda and presentation for a business analytics seminar for credit union executives and board directors. The presentation will define business analytics, explain how it can help credit unions address key issues like margin compression and regulatory compliance, and provide examples of how analytics can be applied to areas like marketing, risk management, and branch performance. Attendees will learn how predictive analytics can help credit unions retain members, optimize pricing, and streamline operations. The presentation will also cover getting started with business analytics projects.
Business analytics workshop presentation final
- 1. MNP Technology Consulting Presents: Business Analytics: Top Line Growth and Bottom Line Results May 8, 2012
- 2. Introductions - Facilitators Brian Beveridge Partner, Technology Consulting Leader MNP LLP Shelley Legin Credit Union Consulting Lead MNP LLP
- 3. Agenda • 1:45 – 2:45 – Presentation • 2:45 – 3:00 – Interactive Session • 3:00 – 3:15 – Q & A
- 4. Objectives Give 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?
- 5. Topics 1. 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)
- 6. Topics 6. How to get started with Business Analytics projects 7. Interactive Session 8. Q & A
- 7. What is Business Analytics? -7-
- 8. We live in a Connected, Instrumented, Dat a-Rich World
- 10. My Ski Goggles
- 11. What is Business Analytics? “Business Intelligence” Term Coined by Gartner in 1989 – Simply defined as “using information effectively to make better decisions”.
- 12. 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”
- 13. MNP‟s Definition of Business Analytics Improving our client‟s business results by providing business insights to all employees leading to better, faster, more relevant decisions
- 14. The link between Business Success and Business Analytics
- 15. Information is the Key to a New Wave of Opportunity… 44x as much Data and Content Over Coming Decade But Businesses are Challenged to Leverage it…. 1 in 3 2020 35 zettabytes 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 2 Business leaders say they don’t have access to the information they need to do their jobs 83% of CIOs cited “Business intelligence and analytics” as part of their visionary plans to enhance competitiveness
- 16. Organizations embracing Business Analytics have the answers … 3x Organizations that lead in analytics outperform those who are just beginning to adopt analytics 5.4x Top Performers are more likely to use an analytic approach over intuition* *within business processes 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.
- 17. Winners in the Financial Industry Customer analytics Operational efficiency Using advanced analytics to profile and segment target customers, First Tennessee Bank improved marketing effectiveness by: Using financial analytics to streamline statement creation, First Command accelerated monthend updates by over: 600% Risk management Using business intelligence to create an online credit tool, Argos generated an annual business value for each customer of: 500% $855K
- 18. A Business Analytics Primer
- 19. 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
- 20. Traditional Reporting and Analysis Does a Pretty Good Job Typically not “real time” Typically – not addressed Page 20
- 21. Business Analytics Helps with Corporate Performance Management How are we doing? What should we be doing? Analytics Why?
- 22. BA Helps with Corporate Performance Management ■ Performance ■ Decision Making ■ Information ■ Data
- 23. What if you had all the answers to win? Which customers are thinking of leaving? Which transactions are suspicious? How is Margin Compression affecting my credit union? The ultimate differentiator today… …is being able to make more informed choices with confidence, to anticipate and shape business outcomes. How can I extract insight from all of my information?
- 24. A Taste for Analytics -24-
- 25. 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
- 26. The Four Styles of Analysis Line Managers Business Users Financial Analysts Business Analysts Business Managers Executives How are we doing? Why? What should we be doing? Immediate, visual insight into business performance Self-service analysis of trends and patterns Insight to determine strategy, allocate resources and set targets Analytic Reporting Predictive Analytics Trending Scenario Modeling • Top down view • Drillable reports • Sort top & bottom • Review then query • Personal exploration • Compare & contrast • Rotate and nest • Work disconnected • Model scenarios • Compare scenarios • Save versions • Uncover patterns • Statistical calcs • Mine data/text • Predict will be” ”What outcomes • Budget Variance • Product ranking • Sales trend analysis • Market analysis • Financial analysis • Profitability analysis • Fraud prevention • Churn analysis ”Drill-Down” ”Slice and Dice” ”What if”
- 27. The Four Styles of Analysis Line Managers Business Users Financial Analysts Business Analysts Business Managers Executives How are we doing? Why? What should we be doing? Immediate, visual insight into business performance Self-service analysis of trends and patterns Insight to determine strategy, allocate resources and set targets Business Analytics Application Components Dashboards Scorecards Reports Queries Analysis Content analytics Predictive modeling Planning/ budgeting Business Analytics platform Loans Systems Banking Systems HR Systems Marketing Systems Financial Systems
- 29. Business Analytics Applications Analytic Reporting 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
- 30. Business Analytics Applications Dashboards 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
- 31. Scenario Modelling Model and compare scenarios Reorganize, reshape Multiple versions Financial and profitability analysis Exploration and „what-if‟ scenario modeling
- 32. Predictive Analytics is Transformation Technology • 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?
- 33. Summary – Business Analytics in Context Planning, Budgeting, Forecasting & Consolidation Analysis & Reporting What happened? What will happen? Report Forecast Single Data Model What is happening? Scorecard Why? Analyze What do I want to happen? Plan
- 34. Move from “Sense and Respond” to “Predict and Act” Predict and act Velocity Lack of Insight Inefficient Access Volume Sense and respond Instinct and intuition Skilled analytics experts Variety Inability to Predict Back office Real-time, fact-driven Everyone Point of impact Automated Optimized
- 35. How can Business Analytics address the Key Issues in Credit Unions?
- 36. Key Business Issues Facing Credit Unions 1. 2. 3. 4. 5. 6. Address Margin Compression Develop a strategy for consolidation Enhance regulatory compliance Prepare for industry transformation Attract new members Leverage IT to improve productivity and profitability 7. Attract, manage and retain top talent 8. Protect your members from fraud
- 37. Credit Union What ifs… Payments Branch management ... predictive analytics could detect and prevent a wire transfer identified as high probability of fraud? ...could understand which branches or products were performing the best? Executive leaders ...could make better business decisions using accurate data across all time horizons Relationship management ...could consider the risk and profitability of the entire member relationship when pricing new deals? Risk and finance Marketing ...could predict the right offer for the right member at the right time? ...could streamline compliance and understand risk exposure across businesses and regions?
- 38. 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
- 39. No Shortage of Internal Data Member Data Financial Products - - # of members Demo Information Location Accounts Issue – How to transform it into INFORMATION and ACT on it Revenue Costs Location Accounts Financial Transactions Branch Data - - Deposits/Withdrawals Loan Pmts Interest Members by Brach Revenue by Branch Product Mix by Branch
- 40. The Data isn‟t always where its needed Executive - Strategic Planning Middle Managers - Management Control Front-Lines - Operational Control
- 41. 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)
- 42. The Analytics-Driven Credit Union Increase flexibility and streamline operations Optimize enterprise risk management 42 $ Create a Memberfocused Credit Union
- 43. The Member View How do I retain my best members? Who are my ideal members and how do I attract them? How can I ensure that our pricing is competitive and profitable? What products/services attract mass affluent members? ? How do I find the optimal balance between service and cost of delivery? How can I improve service Why are my marketing response rates so low? How do I make more members highly profitable? 43 levels and the knowledge of my front-line employees? Which are my best performing branches?
- 44. Member Profitability Analytics 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
- 45. Marketing Optimization 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 45
- 46. Relationship Pricing 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
- 47. Client Servicing Includes paperless, real-time selfservice 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
- 48. Risk Management View How do I inform business users about the risk impact of decisions? How do I integrate governance, risk and compliance processes? Could I benefit from fraud detection and credit risk analytics? Can I perform risk scenario analytics? 48 How do I eliminate operational silos to get an enterprise view of risk? How do I operationalize risk appetite? ? How do I respond more efficiently to evolving regulatory requirements? What operational risks can be reduced? How do I ensure that pricing models are risk adjusted?
- 49. Governance, Risk and Compliance 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
- 50. Risk Insight & Optimization 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, counterp arty) Risk optimization through risk and finance integration, risk appetite management and communications, strategic planning, and riskadjusted relationship pricing 50
- 51. The Streamlining View How do I provide better executive visibility into enterprise performance? Where can I cut costs without affecting revenue? ? How do I improve tracking/ monitoring of high-value payments? What branches and relationship managers are my best performers? Why? How do I streamline my financial planning/budgeting process? How do I deliver real-time insight at the point of impact? What’s the best approach for IT cost allocation?
- 52. Branch Performance Management 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
- 53. Payments Monitoring and Analysis 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 53
- 54. Is there an App for That? (Mobile Business Analytics) -54-
- 55. Is there an App for that?
- 56. 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)
- 57. 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
- 60. How to Get Started with Business Analytics projects -60-
- 61. 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
- 62. What has to go Right on BA Projects? 1. 2. 3. 4. 5. 6. Executive Sponsorship and Commitment Planning Trust in the Data – Data Validation Proper Roles Change Management Sustainment
- 63. Strategy Based Analytics Approach
- 64. 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
- 65. Getting Started with Analytics Projects 1. 2. 3. 4. 5. Start with an Executive Discovery Session Review Business Strategy Build the linkages from Strategy to Measures Determine success indicators 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
- 66. 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?
- 68. 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
- 69. 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.
- 70. Interactive Session • Business Analytics – Credit Union Examples • Mobile / iPad Analytics Solutions
- 71. Questions -71-
- 73. Follow Up • Brian Beveridge • (204)-775-3500 ext 4602 • Brian.Beveridge@mnp.ca • Shelley Legin • (778)-772-8009 • Shelley.Legin@mnp.ca