Friday, December 19, 2008

Who reads MIS Reports?

1. Can you imagine the number of reports being produced in a large sized bank?
2. Can you imagine how many of them are automated, system generated reports and how many of them are made manually
3. Can you imagine, of the reports generated, how many are read by someone and analysed and how many just sit in some folder?
4. Can you imagine, the number of reporting requirements that are still not met?
5. Finally, can you imagine the number of pages of reports printed and left unattended at printers?

My Answers:

1. 2000
2. 700 are automated and 1300 are manually made or has some form of human intervention
3. 10% of the reports are read and analysed.
4. Reporting requirements equivalent of another 2000 reports.
5. 2000 pages per month

Wednesday, November 19, 2008

Outsourcing Reporting Function - Smart Decision

Large organizations with huge reporting requirements have been traditionally outsourcing the report production services. Report production is considered non value added. The basic analysis of the reports are also outsourced, so that the organizations don't waste their valuable resources into these routine mundane activities. To illustrate, Nielsen does reporting function to large corporates in US through their ACNielsen Retail Measurement Services

If reporting function can be outsourced, why do some large corporates still do these functions manually, internally deploying their knowledgeable resources? Is it not beneficial to have these reports done by companies such as Nielsen while the corporates focus on analyzing reports and making meaningful decisions.

GE used to enforce six sigma rigor on their IT suppliers, forcing them to reach above 4.5 sigma still maintaining costs. Similarly, corporates could force the outsourced vendor to automate reports over time and then in-source them or have it outsourced for a fraction of the original cost when they used to be manual task.

Analytics Initiatives in Financial Services

Large financial services companies have similar analytics efforts being carried out by various departments for achieving their own objectives. However, the teams have to work together and sync up periodically to learn best practices from each other. It must also present a view of how these efforts are complementary yet unique and how they all collaborate to meet the overall corporate objectives. One of the ways to present these initiatives to the senior management could be as follows:

Initiative A: Who to target?: This model may define the audience to target based on their perceived potential

Initiative B: How to target?: This model may define the best possible ways to reach to the target audience, like the most effective channel

Initiative C: When to target?: This model may define when is the right time to target; e.g. targetting when someone has a baby with a life insurance policy

Initiative 4: What to target: This initiative may define the best product to target with

Initiative 5: Where to target: This initiative may define the best possible location to target them; is it their home computer or a branch near their home or on their mobile phone.

Monday, November 10, 2008

What is your Brand?

I recently heard the following conversation in CNN after the US presidential poll results.

Reporter: When I ask my 4 year old son and 9 year old son on what Obama stand for, both mentioned "Change". When i asked them what McCain Stood for, they didn't have any answer. They did not know. Even i do not know"

This struck a chord in me... Obama was repeatedly conveying a message in simple term, that people could relate to. That word meant Miracle in Work.

What can banks and insurance companies learn from this episode? Its Brand message in simple words. If i ask your customer, what your bank stands for, do they have a simple word to explain, instead of blinking or telling a long story. Can they say "My friend in need" or 'Advisor" or "My Pal". If they can't say something, you say it repeatedly in your messages and then they will repeat it. That's what Obama did. He kept saying Change. Now people say he stands for Change. We will wait and see what Change he brings in. Are they real changes or just minor aberrations that will be dissolved over time.

Sunday, November 9, 2008

Segmentation in Financial Services

I will be thrilled to read the case studies of segmentation strategies effectively deployed by Banking, insurance and investment banking firms.

Sunday, November 2, 2008

What can i do with so much data?

In large organizations, various departments buy data for various reasons. The people who buy the data potentially don't understand how those data can be used across the enterprise. In such scenarios, either some of the data is potentially not put to use or the other department buy the same data from elsewhere. How can you solve this problem?

You need to have some specialists within organization, who act as data specialist and analyze all the data that is being bought and see how the data can be used by other departments. Also, they need to hold meetings and communicate within the enterprise and provide sample data.

In this world, data is power.

Saturday, October 18, 2008

Potential Value




Segment I: Segment I can be regarded as unattractive. It has low potential value and low current value. Therefore, it is expected that future profitability is low. In order to maximize the profitability of this segment, strategies should focus on cost reductions and possibly on price increases (i.e. less promotions) instead of trying to increase the purchase level.

Segment II: Segment II has high potential value, but the company has not succeeded in taking a large share of this value. Therefore, companies should aim to get a larger part of the customer potential in this segment. Customers in this segment have many opportunities for upselling activities. Of course, some customers might be more sensitive to such activities than others.

Segment III: Segment III has low potential value and high current value. We are concerned here with relatively loyal customers with low up-selling possibilities. As loyal customers are important for companies, companies should strive to keep these customers. However, up-selling efforts are not likely to be successful.

Segment IV: This segment is the most valuable segment. These customers are loyal and have a large potential value. Losing this group of customers would really harm the company. Management should strive to keep this group of customers using all kinds of relational efforts. This group might, for example, get priority in the service delivery process.

Tuesday, October 14, 2008

Convenience Checks Campaign

I have been getting convenience check on my credit card every month from Wamu. They should know by now that i have not been keeping any balance on my card and i have never used any of the convenience check. By looking at my behaviour they should decrease the frequency with which they send the check. Further, instead of sending 4 checks and a long letter, they should send only 1 check, if at all they want to send.

This is a money saving idea for Wamu.

Tuesday, October 7, 2008

Customized Ad on sales receipt

Most of us use credit/debit card at the check out counter. The sales receipt machine should be able to read the issuer of the card and then target advertisement from that banker.

May be, we should go one step further. The bank should be able to send a customized advertisement or offer to the card holder on the back of the receipt. This can even come real-time.

This concept is already practiced by HEB. If you purchase a baby food from GERBER, the system prints out separate discount coupon for a similar product from HEB's own brand.

Customer Value

For any given company, a customer represents 2 values.

1. Realized Value: This is the $ value of profit that the customer contributed to the company's bottom line for a given period.

2. Potential Value: This is the $ value of profit from lost opportunity during the same given period. The lost opportunity could have been lost to a competitor or its still not realized by anyone.

If companies are able to derive these 2 values (Realized Value & Potential Value), then the company can device various strategy to increase the "Realized Value" from the customer.

Once we get these values, the following questions need to be answered:

1. Which customer should the company give more importance to? Is it for customers with higher Potential Value or customer with higher Realized Values.
2. What kind of service levels should we maintain for each of these 2 segments
3. Should we perceive the $ value alone or should we standardize them to a % value. In other words, Realized Value + Potential Value = 1.