2. Agenda Key notes from the last meeting ACE Solution Approach Proposed Team Composition Time Lines Investment Structure Appendix
3. Institutions need to move towards intelligent approaches to make sense of data Optimization What’s the best that can happen? High Predictive Modeling What will happen next? Business Impact and Competitive Advantage Forecasting What if these trends continue? Statistical Analysis What is this happening? Alerts What needs attention? Query Drill Down Where exactly is the problem? Ad hoc Reports How many, how often, where? Standard Reports What happened? Information Intelligence Data Low 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
4. 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? Questions you may have The Institutionalizing Analytics (IA) Journey Institutionalizing Analytics Operationalizing Analytics Solving Problems, Optimization Predictive Analytics & Models Actionable Insights
5. 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 ACE Value based fee structure Strong Cost Benefits Pay for Performance Quality Management Processes Productivity Management Processes Delivery Management Processes People Management Processes Core Analytics Processes CRISP DM Methodology, Project Management Methodologies Dedicated and Experienced Analytics Team Well trained, talented and responsible people
21. Realign ACE scopeFractal’s Role ~Implementer Fractal’s Role ~Consultant Fractal’s Role ~Consultant Fractal’s Role ~Implementer Fractal’s Role ~Facilitator
22. 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 Executive Sponsorship Political Management Strategy Short Term Wins Visioning Sense of Urgency Communication for Buy-In Guiding Team
23. 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
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28. 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 Adoption of standard performance metrics Implementation Challenges Pool of trained specialists Offer flexible staff resources Guiding Team
29. 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
30. Proposed Team Composition A team of Engagement Manager, Project Manager, Statistical Analysts, Data Analysts offshore. Proposed Model Fractal Team Client Team Escalation Project Sponsor Engagement Manager (Onsite) Daily working relationship Client SPOC Project Manager Statistical Analysts Data Analysts
32. Resource Management Fractal Resources Client Resources Analytical Company Localized Analytics Establishment of ACE Time Initiation of ACE Implementation Day 0 Day 1000
33. Possible Business Models High 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 provides a fixed capacity team in Fractal office for Client to execute analytics projects 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 Cost of Delivery BOT (Build, Operate & Transfer) Complete Outsourcing Captive Center Low Control & Risk / Investment for Client Low High
35. Timelines Fractal’s Role ~ Implementer Implementation Fractal’s Role ~ Consultant 8-12 Weeks* Team Formation Fractal’s Role ~ Consultant 1 Week Project Identification Fractal’s Role ~ Implementer 1 Week Business Diagnostic Fractal’s Role ~ Facilitator 4 Weeks Vision for ACE 2 Weeks *As per scope of work identified during business diagnostics.
36. 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
38. 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 Pioneer in Offshore Analytic Delivery Global Presence London Bay Area New Delhi Singapore New York Mumbai Advanced Solutions across Data Intensive Businesses Mature Capabilities for Diversified Financial Services
39. 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 Impact High Medium Low P H PA M DB L DG Data Sources Data available with Client Multiple (Additional Data may be required) Complexity Complexity has been defined in terms of ease of use of the analytics solutions for Client. High Medium Low B M H M Implementation Timeframe Specified in weeks show regular (R) L W
40. Menu of services for Financial Institutions Risk Marketing Executive Management Acquisition Marketing Mix Management Campaign & Response Mgmt Credit Scoring M M M PA H M 12 PA H H 8 PA M H 8R Activation and On boarding Deposit behavior scoring B PA M H 8R M P M L 4 B Segmentex DG M M 8 Customer Management Customer Lifetime Value Behavioral Risk Management Revenue Enhancement B M B PA H H 12 PA H H 24 PA M H 12R Proactive Retention Collections & Recoveries B PA M H 12R M PA M H 12 Operational Effectiveness Business Diagnostics Credit Risk Dashboard Campaign Optimization M M PA H H R DB H L 4 B DB M M 4R Spend Profiling & Pockets of Value Portfolio Risk Management B B DG M M R DG H M 12 Payment Quality Analysis B DG M L R
41. 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. Type of Service Complexity Impact Data Sources required Implementation Timeframe Type of Service Complexity Impact Data Sources required Implementation Timeframe Predictive Analytics Product High Medium Medium Low Multiple Multiple 12 Weeks 4 Weeks Deposit Behavior Scoring The deposit behavior scorecard looks at risk quantification across Liability Customers for Asset products acquisition.
42. 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. Type of Service Complexity Impact Data Sources required Implementation Timeframe Type of Service Complexity Impact Data Sources required Implementation Timeframe Type of Service Complexity Impact Data Sources required Implementation Timeframe Predictive Analytics Predictive Analytics Diagnostic Medium Medium Medium High High Medium Multiple Client Client 8 Weeks (R) 8 Weeks (R) 8 Weeks 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. 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.
43. 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
44. 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. Type of Service Complexity Impact Data Sources required Implementation Timeframe Predictive Analytics High High Client 4 Weeks 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 Medium High Multiple 12 Weeks
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46. CRM endeavors such as usage enhancement, loyalty/customer retention and value migration through up sellingType 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)
47. 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)
48. 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
54. Forecast portfolio lossesType of Service Complexity Impact Data Sources required Implementation Timeframe Dashboard Medium Medium Client 4 Weeks (R) Type of Service Complexity Impact Data Sources required Implementation Timeframe 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. 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