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Does you analytics scale?Institutionalizing Analytics is a challenge that will require experts like Fractal Analytics
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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
3Confidential | Copyright © Fractal 2011
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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?
4Confidential | Copyright © Fractal 2011
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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
5Confidential | Copyright © Fractal 2011
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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
6Confidential | Copyright © Fractal 2011
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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
7Confidential | Copyright © Fractal 2011
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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
8Confidential | Copyright © Fractal 2011
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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
9Confidential | Copyright © Fractal 2011
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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
10Confidential | Copyright © Fractal 2011
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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
11Confidential | Copyright © Fractal 2011
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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
12Confidential | Copyright © Fractal 2011
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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
13Confidential | Copyright © Fractal 2011
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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
14Confidential | Copyright © Fractal 2011
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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
15Confidential | Copyright © Fractal 2011
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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
16Confidential | Copyright © Fractal 2011
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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
17Confidential | Copyright © Fractal 2011
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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
18Confidential | Copyright © Fractal 2011
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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
19Confidential | Copyright © Fractal 2011
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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
20Confidential | Copyright © Fractal 2011
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Appendix: About Fractal
21Confidential | Copyright © Fractal 2011
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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
®
New York
London
New Delhi Bay Area
Mumbai
Singapore
22Confidential | Copyright © Fractal 2011
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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
23Confidential | Copyright © Fractal 2011
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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
24Confidential | Copyright © Fractal 2011
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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
Implementation Timeframe
Predictive Analytics
High
Medium
Multiple
12 Weeks
Type of Service
Complexity
Impact
Data Sources required
Implementation Timeframe
Product
Medium
Low
Multiple
4 Weeks
25Confidential | Copyright © Fractal 2011
®
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
Data Sources required
Implementation Timeframe
Predictive Analytics
Medium
High
Multiple
8 Weeks (R)
Type of Service
Complexity
Impact
Data Sources required
Implementation Timeframe
Predictive Analytics
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
Data Sources required
Implementation Timeframe
Diagnostic
Medium
Medium
Client
8 Weeks
26Confidential | Copyright © Fractal 2011
®
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
Data Sources required
Implementation Timeframe
Predictive Analytics
High
High
Multiple
8 Weeks
27Confidential | Copyright © Fractal 2011
®
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
Data Sources required
Implementation Timeframe
Predictive Analytics
High
High
Client
4 Weeks
Type of Service
Complexity
Impact
Data Sources required
Implementation Timeframe
Predictive Analytics
Medium
High
Multiple
12 Weeks
28Confidential | Copyright © Fractal 2011
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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
Data Sources required
Implementation Timeframe
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
Data Sources required
Implementation Timeframe
Predictive Analytics
Medium
High
Client
12 Weeks (R)
29Confidential | Copyright © Fractal 2011
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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
Data Sources required
Implementation Timeframe
Predictive Analytics
Medium
High
Client
12 Weeks (R)
30Confidential | Copyright © Fractal 2011
®
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
Data Sources required
Implementation Timeframe
Predictive Analytics
High
High
Multiple
24 Weeks
31Confidential | Copyright © Fractal 2011
®
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
Data Sources required
Implementation Timeframe
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
Data Sources required
Implementation Timeframe
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
Data Sources required
Implementation Timeframe
Diagnostic
Medium
Low
Client
Regular
32Confidential | Copyright © Fractal 2011
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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
Data Sources required
Implementation Timeframe
Predictive Analytics
High
High
Multiple
Regular
Type of Service
Complexity
Impact
Data Sources required
Implementation Timeframe
Diagnostics
Medium
Medium
Client
Regular
33Confidential | Copyright © Fractal 2011
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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
Data Sources required
Implementation Timeframe
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.
®
Nirmal Palaparthi
nirmal@fractalanalytics.com
+65 91280581
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