business intelligence: a key to enhanced profitability
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Business Intelligence: A Key to Enhanced Profitability. ELFA Annual Convention San Antonio, Texas October 25, 2011. Our Moderator Paul Bent Senior Managing Director The Alta Group, LLC, Long Beach, CA. Our Panelists Michael Donnary Senior Manager / Banking and Asset Finance - PowerPoint PPT PresentationTRANSCRIPT
Business Intelligence:
A Key to Enhanced Profitability
ELFA Annual ConventionSan Antonio, TexasOctober 25, 2011
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
2
Our Moderator
Paul BentSenior Managing Director
The Alta Group, LLC, Long Beach, CA
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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Our Panelists
Michael DonnarySenior Manager / Banking and Asset Finance
Capgemini, Rosemont, IL
Scott ThackerChief Operating Officer
Ivory Consulting Corporation, Walnut Creek, CA
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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Our Panelists
Richard RyanPartner
Invigors EMEA, London, U.K.
James J. McKinneyHead of Balance Sheet Management, Operations & Strategy
RBS Citizens Asset Finance, Chicago, IL
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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Our Agenda What is Business Intelligence (BI), anyway? The 2011 Business Technology Performance Index (BTPI)
o Key findingso What’s next for BI?
What does BI “look” like?o How does it work?o Where does it fit in?
Applying BI analytics in leasing and lendingo Monitoring performanceo Analyzing effectivenesso Modeling and Managing processeso Forecasting trends
BI databases, resources, and information
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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Our Approach Today Interaction with you
o How much do you know about BI?o What do you think about BI?o What are your experiences with BI?
Open discussion – not a lectureo Everyone’s invited to participateo Questions, opinions, ideas
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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What is Business Intelligence, anyway? Different things for different people Internal and external information Combines information, reporting, data, and insights
o Verifies / challenges assumptions on which business operateso May be analytical, supporting evaluationo May be predictive, supporting planning
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
8
What is Business Intelligence, anyway? Internal
o KPIs/reportingo Drill down on P&L driverso Analyze performance & riskso Data-heavy analysis
External o Market and competitive intelligenceo Growth, opportunity, and trend identification o Lighter data volume
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
9
BI – a working definition:
The systematic analysis of internal and external
information to yield insights that can help maximize
a company’s performance, market position,
and profitability.
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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9th year for the Report Serves as the industry benchmark
for IT and operations direction and spending
Represents a summary of survey responses and an analysis
Presents insights into the continuing evolution of technology in the equipment finance marketplace
The 2011 Business Technology Performance Index
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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Many organizations have several Business Intelligence tools from multiple vendors. The situation has become even more complex as the Business Intelligence tools market has seen massive consolidation.
A majority of respondents currently aggregate and report data from a data warehouse or other repository of multiple core applications.
More than one quarter use no Business Intelligence tool or manually construct reports from application outputs.
Key IT initiatives include improvements in customer self service, controls and compliance and risk management.
2011 BTPI – Key Business Intelligence Findings
While these are not the best of times for the industry, this year’s responses indicate improvement and optimism --and a more forward-looking approach taken by businesses.
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
12
Conflicting Priorities: Reduce Cost and Increase Business Agility?
Many Equipment Finance companies have in place data warehouse and business intelligence programs. Yet they are failing to see the benefits.
What are the positive drivers for exploiting information in your organization?
45%
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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So What is Stopping You?
The explosion in information volume often results in inconsistencies between sources, duplication of master records, and time spent reconciling sources.
What are the greatest barriers to an effective BI program in your organization?
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
14
What’s next for Business Intelligence? Many organizations will attempt to address opportunities through a
traditional approacho Tactical fixes to processes and organizational structures.o Implementing additional IT solutions.
A number of organizations have already made good progress o Transforming themselves into information-centric organizations.
Rapid and informed decision making is key to success The absence of good business intelligence creates the potential for
failure
To be effective and competitive in today’s post-recession environment, organizations must leverage their business information.
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
15
How does BI actually work? Software systems
o Standaloneo Features embedded in existing software systemso Mobile apps
Analytics drawing on existing databases Presentation capabilities tailored to user’s needs Dashboards, real-time updates, integrated tools, reports
Focus on management effectiveness Streamlining, not adding on Simplifying, not complicating
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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What does BI “look” like?
It looks likefinancial KPIs
at a glance
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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What does BI “look” like?
It looks likereal time sales
performanceindicators
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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What does BI “look” like?
It looks likeHR stats
on demand
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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What does BI “look” like?
It looks liketrends and
forecasts
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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How does BI fit into your management and IT picture?
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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The BI “Journey” Monitoring Analyzing Modeling Forecasting
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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Applying BI analytics in leasing and lending (a few discussion points) Monitoring performance
o Profitability– Where do we make our money? – Can we analyze results by:
» Financial products? Geographies?» Credit scores? Asset types?
o Sales– How well is the sales force aligned with the most profitable opportunities?– How and why do we lose deals?– Cross selling and up-selling opportunities?
o Marketing– How do we track conversion rates over time?– How do customers respond to specific campaigns and adjustments?
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
23
Applying BI analytics in leasing and lending (a few discussion points) Analyzing effectiveness
o Vendors and brokers– What is our penetration rate?– How does it correlate to product and price offerings?
o Customers– Which ones are unprofitable? What factors make them so?– How can we migrate them to more profitable products?
o What product offerings result in the highest returns?o Other examples
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
24
Applying BI analytics in leasing and lending (a few discussion points) Modeling and managing processes
o Underwriting– How can scorecards be aligned dynamically with bad debt experience?– What is the overall view of each customer relative to our exposure?
o Portfolio– How will it perform under hypothetical future conditions?– What provisioning should be consider?
o End of lease– What end of lease event is most profitable? Under what circumstances?– How can the highest potential end of lease customers be identified?
o Other examples
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
25
Applying BI analytics in leasing and lending (a few discussion points) Forecasting trends
o Data mining techniqueso Stochastic and predictive analytical methodso Modeling built on parametric assumptionso Availability of large volumes of statistical data
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
26
BI databases, resources, and information Databases across competitive boundaries BI resources and systems Further information
Business Intelligence: A Key to Enhanced Profitability
ELFA Annual ConventionOctober 25, 2011
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Thanks for your participation.
Paul Bent, The Alta GroupMike Donnary, Capgemini
Scott Thacker, Ivory ConsultingRichard Ryan, Invigors EMEA
Jim McKinney, RBS Asset Finance