Taming Complexity— Turning Complex Data into Valuable Information
Details, details, details—what do we do with all these details? How do I capture the details and aggregate them in a way that relates to the issues and business problems I need to solve? This is a complex and familiar issue in many financial service institutions.
What's the answer...you're probably thinking data warehouse...right? True, the data warehouse provides the means to capture all of the details that you need—it can easily contain hundreds of tables and thousands of columns filled with information—but how do you make sense of all that information? To make sense of it, you need to determine which data to summarize and analyze to meet the varying needs across your institution. For instance, the Finance Department may want particular information presented by profitability, while Marketing wants to see similar information presented by household and channel, and Operations wants different details in yet another way.
The Resolution
A data warehouse can provide limitless amounts of information about individuals, households and accounts. But a data warehouse is only successful if, at the end of the day, the intended user community is actually able to use the information to gain knowledge that benefits the business. In order to maximize its effectiveness, the information contained in the warehouse must provide benefits to a group of users with varying degrees of responsibility and skill levels.
Instead of a simple warehouse, you need a system that offers comprehensive information management. A system that collects, manipulates, analyzes and reports the specific information needed, in exactly the way it's needed. Only then can you transform that information into actionable knowledge that becomes an asset to your business.
The ability to have analysis that is a summarization, count or percentage of metrics or facts, segregated by particular variables, is what makes that information valuable. An information management system, such as InformEnt, from Fiserv CCS, which provides just that—the details and the ability to manipulate, transform, analyze and report information in every way required to enhance your business.
The Key—Flexible Data Organization: One thing is certain, if two people ask the same question, they expect to—and should—get the same answer. How do you ensure that consistency when needs are very different across your organization? By providing the flexibility to access and analyze information in many different ways. This is where the value of a comprehensive information management system comes into play.
The key is the ability to perform detailed analysis and provide reporting that meets the varying needs within your organization. Just having the details is not enough. An information management system needs to allow for both depth and breadth of information, as well as flexible analytical and reporting capabilities. This can be accomplished with InformEnt's data model, analytical engines and dynamic roll-up structures, built on dimensions, hierarchies and classifications.
Key Roll-Up Structure Components
The three components to a roll-up structure that enable layering are classifications, hierarchies, and dimensions:
- Classifications—The basis of all dimension reporting is the use of classifications. Classifications define the business rules that allow warehouse users to categorize the lowest or atomic level data in the warehouse. Classifications can also be thought of as a way to group related information in the hierarchy structure of a dimension.
- Hierarchies—Hierarchies, which can be thought of as roll-up structures, allow users to define exactly how they want to roll-up, or aggregate, varying levels of information, beginning at the lowest level of detail. These hierarchies give managers the appropriate level information for their needs while also providing analysts with a path to drill down into the details they require to answer more specific questions about the information before them.
- Dimensions—Dimensions are the highest level of groupings used to organize specific hierarchy information for analysis. A dimension can be based on standardized terms such as general ledger accounts, business units or products. Each dimension has a unique set of attributes or key values that define the distinctiveness (key attributes) of data to be summarized.
Value
An information management system, such as InformEnt, is an easy way to tame the complexity of the details, using simple business terms. Its robust 11,000-item financial business data model, and the associated classifications, hierarchies and dimensions, enable organizations to transform source data from operational systems into logical, accessible business information.
The key to this is to not expect the end user to remember all the details (table names, column names and values) of the data model or what is required to define each item of the roll-up structure. Instead the end user should simply request the information to be presented by the level of detail they require (e.g. "Non-Money-Market Interest Bearing Checking Accounts") and not necessarily have to know how to define that level of detail (e.g. interest rate greater than zero, a product type code equal to "123" and no maturity date).
The intellectual capital required to define the classifications and subsequent reporting hierarchy are recorded once and then reused. This ensures that everyone asking the same question will get the exact same answer, every time. InformEnt also facilitates ease of use with point and click functionality.
A second advantage of using the roll-up structures is that they can be used for both relational and OLAP (online analytical processing) reporting. Whether an end user is using a business intelligence (BI) reporting tool or reporting from a multi-dimensional database, the exact same roll-up structures could be used. Using a common set of structures to extract information from the warehouse will ensure consistency no matter what reporting tool is used.
Since a user can define many hierarchies for a specific dimension, these hierarchies can be used to perform "what if" analyses on the data without making any changes to the underlying data. An example of this is reporting for the organization dimension. One hierarchy can represent the current organization while a second hierarchy can be defined to represent a proposed organizational change, like branch consolidation, allowing management to evaluate both the current and proposed structures. Such "what if" analyses allow users to see how the proposed changes will impact the organization before committing to a permanent change. Having this information in advance enables you to make decisions with much more confidence and ease, to assure that the right decisions are made for the business.
Just as hierarchies can be used to "see the future," they can also be used to compare current results to "what would have been." Consider the previous example of a branch consolidation. It is now a year later and the "new" organization is in place. We can use the "current" hierarchies and the "prior" hierarchies with both of them rolling up the same detailed information to see how well the new organization compares with what would have been, had no changes been made.
A third advantage to centralized reporting hierarchies is improved performance. Since the reporting structures are created in advance of their actual use, the structures can be refined to optimize performance, at any time. This may not happen if you depend on your end users to define the classification criteria as they are creating each individual report. In addition to defining the structures in advance, the actual resolution of the lowest level items to the hierarchy itself is determined one time. This eliminates the need for the resolution to be repeated each time an individual report is needed.
InformEnt in Action
A $16 billion financial corporation in Tennessee has experienced tremendous benefits from the InformEnt system. One major benefit is enhanced data analysis. By accessing information from InformEnt, the institution has a better view and more thorough understanding of customer activity. InformEnt delivers a personalized picture of each customer, which is used to create detailed profiles, including profitability scores and next logical purchase. The institution also uses analysis from InformEnt to create packaging and relationship pricing options for particular customers. "InformEnt has provided us with a way to analyze data and offer products and services based on specific customer relationships. For example, we may offer a customer a more favorable mortgage or loan rate if the customer has other profitable products with us," said the senior vice president of internal reporting.
Another successful InformEnt user is a multi-bank holding company with regional operations in Pennsylvania and more than $1 billion in assets. The key challenge was decision making, especially in the area of effective product pricing. Pricing was difficult, complex and dependant on labor-intensive, manual analysis of diverse reports from multiple systems. In addition, decision support was slow, error-prone, and extremely costly in terms of staff resources. The CEO stated, "We needed information technology that would aid our decision-making process, increase confidence in those decisions, and have a positive impact on our bottom line, and InformEnt does just that. We implemented InformEnt in 1995 and have been very satisfied since. We have recently enhanced our multi-dimensional analysis capabilities and now have even quicker and easier access to our business information, in any format we want—and this makes us much more productive. The InformEnt warehouse and related decision support tools are now the platform of support for both long-term strategic and day-to-day operational management at our corporation."
A third example of InformEnt's value is found at a $1 billion California Credit Union. Not only does InformEnt offer significant gains in efficiency, it also adds the critical dimension of data accuracy and integrity. With consistent, high-quality information available from the warehouse, they have been able to personalize service, build stronger relationships and increase profitable member retention. "We have changed our member relationship culture from transaction-focused to solution-focused, which means our associates need readily available, integrated information to anticipate needs and more accurately assist members with financial planning. InformEnt gives us that information and analysis at our fingertips. We use InformEnt to analyze information to improve product pricing and service options, track member behavior and measure it against profitability metrics, and then develop revenue-generating strategies," said the Credit Union's vice president of information technology.
For more information about Knowledge Management, a more detailed article about taming the complexity of information, or other CCS solutions, please visit Fiserv CCS.