Don’t get around much anymore…

Yes it has been quite a while. Actually we haven’t been doing a lot more than preparing for the big event. As silver sponsor of the largest Enterprise Intelligence Summit in Berlin starting on April 11th 2010 we have been wrecking our brains and CPUs and deprived our bodies of sleep and caffein to deliver the second release of the anvalad product suite. And obviously there’s still a lot to do before we sleep…

So stick with us and assume that the posts will start rolling again once, the release is out and the buzz is in the air. And all in line with the swinging winners, we’ll invite you to dance and take a closer look at our solutions:

• GIP Integration Platform – will jump-start your warehouse and BI initiatives (and does ours)
• Portfolio Management – can transform your average relationship manager into a true portfolio manager
• Sales Management – will ensure your Products & Services, Sales and Advisory teams are in synch and communicate
• Investment Suitability – takes care that you sell the right products to the right clients
• Master Data Management – if your organization doesn’t belong to the lucky few without data quality issues

All of these solutions are either available as classic on site models or in a hosted, SaaS delivery model. And obviously you can testdrive the whole suite using your data and your processes. Take a chance and dance with us…

It’s a jolly good time to prepare another wish-list; one for banks, wealth managers and other financial services. Although it might be a little late for Santa, I’m sure it’s not yet too late for the new year resolution call:

1) Bring about risk-aware incentive- and bonus-frameworks

While I subscribe to a liberal market stance and always have spoken out against harsh regulatory & governmental control over market matters, I do think that the timing of shareholder, client and manager thinking are not aligned. And since these time-gaps have shown to be elementary in the latest crisis origins, we certainly need better frameworks to counteract and regulate them. One of the most influential effects would be to determine the long-term effects in a rather sceptical and pessimistic way using Value-at-Risk baselines and only pay-out incentives and bonuses based on these sceptical terms. And after a 3 to 5 year proof period the real effects could be measured and compensated accordingly. This would mean a sharp decline in bonus volume during the initial years with a moderating effect in the years that follow.

2) Bring us transparency on investment products

It is true that in Europe MIFID has aided the customers in creating more transparency on the risk level and downside aspects of all complex Investment Products. To take this positive trend to the next level and to a global reach it would be helpful to demand for every product which kickbacks and provisions are paid out by the provider of the various products.

3) Demand full clarity on client- vs. 3rd party revenues

Recent studies have shown that banks often generate 25 – 30 % of their revenues with provisions and Kick-Backs. And if those hidden cost would be attributed to the clients and their portfolios an average performance increase of 8% p.a. could be achieved. While market advocates argue that pure performance oriented wealth manager could offer this model without any regulatory change – and some, like the German Quirin Bank, really do – the clients would benefit stronger from a solid governmental response. Why should the taxpayer money that has saved the financial system from total collapse not be worth enough to at least foster a more competitive marketplace.

4) Make the annual thinking cage vanish

Banks talk their clients into long-term thinking and investing and yet are ruled by quarterly reports and annual bonus payments. Just as clients like to take stock of their portfolios on an annual basis, the banks should honor their long-term responsibility and have long-term measures determining their medium-term success – these must be risk-based.

In this mind-set I whish all of our fellow readers a merry holiday season and that Santa has not overlooked your wishlist. Let’s jointly continue to change our profession and field of expertise to the better. Because not just during the Christmas spirit I’m convinced that only banks acting true and fair and dilligently serving their clients will be truely successful in the long run.

Merry x-mas
-Tom

In his recent post about the alignment of Business & IT senior Informatica Perspective blogger John Schmidt asks the rethorical question whether Business (as a role or organization) needs to be involved in IT decision making & implementation of IT projects. It’s a very worthwhile piece asking the right questions and defending an obvious yet somewhat outdated point of view…

The real question in terms of data integration, business intelligence and making smart use of existing information assets is: Does IT still need to be involved?

And that is not a rethorical question at all! Many of Informatica’s competitors in the integration and BI space actually have started to put that blunt thesis to the test. Why can’t we look at IT as the enabler and catalyst but turn over the execution into the same hands that are held accountable for a company’s success or failure?

Pampering Business

“Their time’s too valueable”, some say – my answer would be that there is no time saved when you have to iterate your requirements n times, specify them to the n-th degree and find out in testing, that they are only partially met.

“They don’t have the skills”, others counter – that is true if you have to be a J2EE crack to integrate or know cryptic and proprietory languages in order to produce your reports and business intelligence solutions.

“They can’t architect on a strategic level”, comes at last – and that might be the fact closest to the truth, however how many long-term application & business architecture masterpieces have you seen drafted, implemented and survive. Even in the best of my experiences these success stories have been overthrown by fundamental changes in the business model or by economic upheavel just as often as not.

For both the IT as well as the business decision makers this paradigm shift holds a lot of promise:

• Being involved one level deeper into the concrete implementations Business needs to think
  and IT needs to develop solutions on a more generic (and thus more strategic) baseline
• IT can become a catalyst and focus its time and energy on truely game-changing innovations
• Business can be empowered to change the rules in their business game very fast and flexible
• Both parties can share their burden in the maintenance and pampering of existing solutions
• The run-the-boat versus change-the-boat ratio will improve

Are there examples out there that did just that, you might ask. Yes, there are – I know at least a few in the integration and business intelligence space.If you know some as well, be as kind as to share them with us.

So be brave enough, whether IT or Business stakeholder and hold out that paradigm to say – IT does not need to be involved.

Dehli calling...

Today we’re off to India to polish off the final development and deployment phase of our upcoming active BI platform for the financial services industry. While the initial prototypes and use-cases have proven successfull there is still a lot to cover until January and until we see the best practices implemented we have been struggling to convey to our clients.

“Seeing is believing” is a true and tempting slogan, and we want our clients to do just that. But before we want to see and feel for ourself. Our trip will atke us

• to our Indian development teams to finalize the platform & product
• to Indian Private Banks interested in exchanging some best practices on sales, portfolio management & investment suitability
• to some  Senior Advisors who know the market and its specialties

Stay tuned for regular updates and – infrastructure permitting – some more graphical insights to a thriving market. Most of us western geared banking people would be fascinated, what a difference an industry with little legacy issues makes. We’ll find out and keep you posted.

Almost every tool and solution provider that plays along the buzzword bingo joins the hosted and managed services chant. We’re no different by the way. But do you think that the highly seclusive and privacy bound Wealth Management industry is going to bite that bait?

Chances are that the times are right to give it a shot:

• Many new regulatory requirements – including MIFID II – require huge efforts on the side of the banks  - to share these efforts across multiple industry participants could foster more effective solutions and even increase the quality of the information content
• Many services are already managed and hosted outside the banks themselves – market data providers, risk rating agencies and portfolio management services are just the most obvious examples – these days you can get a tailor made externally provided service for almost any aspect of your value chain – just ask for a quote
• While data volumes explode and analysis requests skyrocket most banks still try to solve these issues on outdated infrastructure using entangled and legacy software and relying on staff that has grown close and dear to exactly these surroundings
• “Green Field Approach” is often treated as  the most dangerous idea within the bank’s established IT organizations – while the cost for maintaining the dedicated services grow the amount available to solve new business questions and provide true business value is shrinking annually

Thus I strongly believe in the dawn of the more effective banking solutions. Starting with high-value but non-mission critical topics like analytical solutions,  portfolio management or middle- and back-office systems the correct offerings are going to find their clients.

What do you think? Are your financial services clients going to take the bait?

Are they at least willing to try and prototype these offerings provided they offer an economic, functional and time-to-market benefit?

I’ve suspected as much but not quite as dramatic as I’ve experienced: The reality of virtualization in large corporations.

Ideally virtualization offers the bright new world of fast, pragmatic yet standardized server cloning that gets you up and running with a new project in minutes instead of weeks. It is however possible to counteract that boost in effectivity efficiently by introducing administrative burdens like forms, sign-off processes and four hierarchies of escalation.

And if the server mushrooming, albeit virtual, still nags at your brains you can invent a policy where each virtual instance has to have exactly one physical counterpart. I am not kidding, that is how a large internal infrastructure organization designed their virtual hosting services.

As I mentioned – virtually impossible.

It´s amazing what a few days off the net, off the schedule and off your daily tasks can do to your creativity. I´ve come up with three new and three related new ventures worth pursuing over the weeks and months to come.
But first let´s get back to the tasks at hand in our immediate future and on our roadmap to active BI for Wealth Management put to work in a SaaS delivery model:

1) Our active prototype is due to go live with the initial client this month still (and he´s on vacation you might think)
2) Our lab SaaS version is scheduled for beta-testing to start end of September (interested in these beta-tests – just drop us a few lines on the when and what)
3) Our next big marketing event is to be the Teradata Partners conference this October.

Keep out on the watch for these items to appear – and if I find some additional time in between – I might let you know about these other six creative ideas…

Let’s talk about the semantic bank: just a few months ago, the discussions about crawling the web for structured information seemed a technical possibility without any business opportunity. Since looking at the existing frameworks and solutions more closely I have changed my mind. Today I am convinced that semantic technologies can add value to traditional BI environments fast and effectively.

Have a glance at the two most successfull use cases:

1) Financial Instrument enrichment – all banks, asset managers and other financial services are spending much effort and lots of money on the gathering, administration and maintenance of a decent data quality of financial instrument master data. And while the market data providers take the lion share out of this business, there are hundreds of solutions and consulting offerings promising another edge and improvement. Few though have tapped the Internet to do just that. Gather feedback about funds managers, assess product risk profiles from a neutral stance or extend product vendor information with background research – all things that add to a rich and diverse view on ones financial instruments. And one solution that can cover a universe of hundreds of thousands with just one additional resource for ongoing maintenance.

2) Network Opportunity Management – ever wondered how to get more and better referrals from your existing client base? Wouldn’t it be niece to aks an existing client not just for the old and dry recommendation but whether be would recommend your services to John Neighbor, the guy your client plays tennis with. Or on the other hand to convince a prospect with the experience from Susan Classmate – didn’t they go to school together? Whilst many of these social connections are publically known and available today, there is hardly time to make use of them manually in our fast paced day to day business. A semantic network analysis toolset can gather these links proactively and put them right where your client advisor can find and use them.

Got interested, wanna see some of these cases in real life. Just call or mail.

semantically yours
-Tom

Are you working in an efficient or an effective organization? Or even both? And how do you measure where your BI delivery unit ranges on a maturity scale of those two attributes.

I’ve spoken to a range of experts from both the consulting end or company end of BI delivery. Here’s a brief account on their take of these questions:

a) Efficiency or Effectiveness

While many state-of-play controlling and performance measurement frameworks claim their grasp on efficiency very few seem to have tried to tackle effectiveness. One of the few approaches put into practice is trying to compare the effectiveness of different projects from all functions of a large Financial Services firm. Here the top 500 projects – whether IT, marketing, HR or accounting related – where put to the effectiveness test. A dedicated effectiveness business case template was developped converging existing financial and qualitative metrics into a common grid. Just this baselining effort skinned out a staggering number of 40 projects that were discarded as non-strategic. Out of the rest the anticipated change budget was alloted across the functions dependent on the projects decreasing effectiveness measure. After 18 months of following this practice the Organization in question increased their effectiveness by 40% – instead of just lowering their cost they were able to use their staff according to current priorities and available skills.

b) Specialized vs. Generalized

The second religious battle one can find in almost any BI competency center is whether it is favourable to have few generalized reports & dashboards understood by the majority of the people or to have dedicated detailed reports and dashboards catering to all the specific questions of the experts. Our approach is to grow from the generic to the specialized and not to tackle these different levels of complexity at once. While you can use the broader, mostly Top down driven Big Picture View to generate and firm up senior sponsorship and involvement it is hard to play the game bottom-up. The usual exception is if you can cater to a broad and important circle of experts – say the client advisors and relationship managers at a private bank. But even these guys these days need to have a broad and holistic picture of their clients, their client’s portfolio, the product and service offering en vogue and the current risk appetite of their organization. So as a generic rule of thumb I would suggest a broad yet powerful audience with a good grasp of the entire organization is a fair bet.

c) Active vs. Passive

BI tradinionalists would rate this one academic but to me it’s the make or break of successful BI solutions. If your report, dashboard or interactive analysis tool is nothing more than a tool showing off glitzy charts and color coded tables, chances are that it will not have a big impact on your organization. So if you really want to see your cause to have an effect you should think about process and feedback. Process embedding is a sure and proven way to integrate reporting checkpoints along the ways business moves. Even more powerful though harder to implement are self contained or self propelling feedback loops that enable an organization to reflect about itself. Think about a client advisor that actively analyses her client book to hunt for new opportunities and actions within – and even records them while analyzing. Think of the team head that structures her feedback sessions based on facts analyzed from the portfolio of her advisor’s client books. Think about the advisor peer that has seen and knows it all but has an additional (financial or appreciative) incentive to share her tactics with her peers.

So if you now sit back and take stock it seems quite easy to take a qualitative verdict on your measurement framework. Not so easy still to measure its effectiveness. One line of thought we are assessing for one client may be promising: Just the experienced investor does with stock picks – decide the quantitative hurdle for each KPI before it’s launched. Review after 3 and 6 month and discard it if it hasn’t made a difference. Go ahead – you make the difference.