Accenture Information Management Services

Accenture performance analytics solution for banking

Driving high performance by aligning management decisions with company strategy

Compelling research from the Accenture Institute for High Performance found that high-performance businesses have a much higher analytical orientation than other organizations.1 According to the research, approximately 10 percent of company executives (15 percent of executives in highperformance businesses) view their analytical capability as a key element of their strategy. But nearly every organization aspires to use analytics more effectively and expects to invest to upgrade analytical capabilities significantly over the next five years.
Financial institutions struggle to measure business performance across the enterprise because they suffer from multiple versions of the truth. Data is generated, collected and presented inconsistently and in piecemeal fashion. The performance manager in Germany may use different data sources, terminology and metrics than her counterpart in Italy to establish high performance for her company. Budgeting becomes extremely difficult when the CFO is at the mercy of a plethora of systems that produce too many contradictory reports with unreliable data. Banks that fail to standardize reporting processes incur higher costs and paralyze the finance department from providing strategic advice to the CEO and business lines. The role of a CFO is evolving from being that of a financial manager to one of a business advisor, but inconsistent data flows from multiple pipelines makes it difficult for the CFO to fulfill this objective. Accenture developed the Accenture Performance Analytics Solution for Banking to help financial institutions measure performance by linking the execution of management decisions to the business strategy. The solution is built on Microsoft Performance Point Server 2007, an integrated performance-management application that allows decision makers to analyze, plan and monitor their business across the entire organization. Ensuring that strategic goals are, in fact, being executed upon, CEOs can visualize how different value drivers link with the banks objectives through a strategy map, which provides transparency on how these drivers can lead to proper execution of the strategy. Banks can measure any metricssuch as sales, operational efficiency or customer satisfaction that they believe are vital to support their strategic goals. The solution enables CEOs to translate those goals into more concrete targets for individual subunits, and then monitor the actual data coming in against those targets. A dynamic system of Web-enabled dashboards and scorecards enhance communication and coordination and alert executives to take action if targets are not being met. The Accenture Performance Analytics Solution for Banking is intended for use by CEOs and CFOs, as well as heads of business lines or departments. The solution is particularly useful in the budgeting process. Effective planning, budgeting and forecasting processes are essential to achieve an integrated enterprise performance management capability. Banks can set targets, analyze data and prepare budgets using a single set of rules tailored to the banks specific needs. Accenture believes that organizations have a real opportunity to create greater shareholder value by linking strategic and financial planning with forecasting processes, and by integrating them with the right metrics, reporting and analytics.

Ensures data integrity throughout the enterprise because the solution acts as a single data pipeline across business lines, divisions and geographies. Enables greater budget process efficiency because data can be easily manipulated, collected and exported to commonly used spreadsheet applications such as Microsoft Excel. Reduces reporting cycle times and speeds up budget preparation through an automated series of individual dashboards, scorecards, reports, drill-down screens and alerts.

Why the solution is different

While many business intelligence and performance-management tools are available to gauge how a business is performing against its objectives, they lack the ability to integrate the planning, forecasting and budgeting process. Traditional stand-alone tools offer reporting capabilities for an individual business line such as retail banking or merchant banking, forcing CFOs and their financial departments to sort through dozens of spreadsheets and e-mails from each business line, which results in time wasted in reconciling inconsistent data and hunting for missing reports. Whats more, as the data is not current, banks are typically able to publish strategy maps only quarterly or yearly. The Accenture Performance Analytics Solution for Banking offers banks the ability to manage performance on a bankwide basis. The entire process of planning, forecasting, budgeting and entering actual budget figures is integrated into a single package that all departments of the bank can use. With all the figures coming from the same system, CFOs have a single version of the truth. Multiple reports containing unreliable data are replaced with a single Web-based system supporting a uniform data set. Additionally, static data is replaced with dynamic reporting. CFOs using the Accenture solution can review or pull data on a monthly or even weekly basis if they desire.

Key benefits
The Accenture Performance Analytics Solution for Banking: Helps align management decisions with the companys strategy because the CEOs targets are relayed to lower levels via an automated process.

Walk into the C-suite of almost any financial institution and you will hear these concerns being voiced: How can I ensure management decisions are aligned with my banks strategy? Why is my budget process taking so long and why does it seem to add so little value? How can I visualize the linkage between the value drivers and the high-level company objectives? Where is value being created in my bank; where is it being destroyed?
Unlike traditional solutions, the Accenture Performance Analytics Solution for Banking also highlights trouble spots requiring immediate management attention. For example, suppose that the CEOs expansion strategy is to increase the branch network by 5 percent. Midway through the year, the CEO checks his scorecard and sees that the branch expansion category is highlighted with a red light, indicating a problem. He clicks on the tab and discovers branches have only increased 2 percent year-to-date. With this kind of at-your-fingertips data, senior management can address issues much more quickly than with traditional data management tools. Other advantages: Comprises the Accenture Enterprise Performance Management Frameworka standardized approach to structuring management processesthat supports a consistent, standardized, shared understanding of enterprise performance management processes. Leverages Accentures technological proficiency and its strategic alliances with Microsoft and other leading vendors of enterprise performance management solutions.

following year. But before setting targets for the coming year, he wants to see estimated results from the year that has just ended. Turning to the dashboard on his home page, he quickly views net profits for private banking, retail banking, insurance and other business lines. Status boxes next to each business line are colored green (in good shape), yellow (warningmay need attention) or red (needs attention). He also scans the global scorecard to compare actual income and expenses against forecasts. Next, he checks the strategy map on the dashboard to see the links between different performance indicators. Glancing at the year-to-date balanced scorecard, he notes that next years return-on-equity target should be more ambitious. He drills down further and sees a yellow light next to net revenues, indicating that slower-thanexpected revenue growth is hindering net profit targets. Slicing the data by business line, he notes that retail banking is the most profitable. Armed with sufficient insight into Best Banks performance, the CEOs office sets targets for next year (23 percent increase in net profits; 12 percent reduction in expenses, and so on). To do this, he uses a template that allows him to fill out the targets via the familiar Excel interface. This information is then stored centrally and available companywide. Continuing the top-down budget preparation process, the CFO receives an alert from the CEO that next years targets have arrived. In an effort to expand the targets into more detail, she opens her CFO dashboard to analyze performance figures by geography, business line, time period and other categories (all of which she exports from her browser to Excel for easy viewing). The CFOs office now allocates the CEOs targets to the various businesses via Excel. The workflow that was set up beforehand automatically notifies the global performance managers of these respective businesses that they have received targets for next year. The global performance managers consult their own home pages, review various reports to get a clear view of the data

and then further refine the targets by their business lines; they, in turn, define their targets down to the local performance managers. Having received an automatic alert from the global performance manager that next years targets have been published, the local performance managers now start the bottom-up budgeting process. Armed with the CEOs targets defined for her entity, the head of retail banking in for example, Belgium knows that she has to increase profits by 12 percent and cut expenses by 10 percent next year. Logging into her home page, she develops her budget in Excel and sends it to her global performance manager, who reviews the budgets of all his local performance managers. The global performance managers can see at a glance on their homepage which local managers have yet to submit their budgets. When finished, the global performance managers modify the budgets as needed and send along to the CFO, thus completing the cycle. Using the solution, the CEO knows that his targets have reached all levels of the bank, and that the budget he gets back reflects those targets. And, a process that used to take months now takes just a matter of weeks.

The Accenture advantage

Accenture is a leader in business intelligence. Since the early 1990s, Accenture has helped hundreds of clients in all industries around the world get the most out of their information and achieve business performance. The company has continually refined its insights and practices to deliver the information management solutions that support business strategy. Accentures information management professionals work with industry specialists to develop new industryspecific strategies leveraging maturing analytics capabilities to help our clients undertake smart data analysis to maximize value.
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How the solution works

At year end, say the CEO of the hypothetical Best Bank, a leading global financial institution, identifies several strategic initiatives for the

Source: Davenport, Thomas H. and Jeanne G. Harris, Competing on Analytics: The New Science of Winning, Harvard Business School Press, March 2007.

About Accenture Information Management Services

Accenture Information Management Services is a global cross-industry organization focused on bringing clients solutions to better manage their business, interact with customers and make strategic, financial and operational decisions. Working across Accentures service lines and industry groups, this network of 13,000 professionals specializes in information management services including business intelligence, portals and content management and data management and architecture. For more information about Accenture Information Management Services, visit www.accenture.com/information management.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills, and technologies to help clients improve their performance. With more than 186,000 people in 49 countries, the company generated net revenues of US$23.39 billion for the fiscal year ended Aug. 31, 2008. Its home page is www.accenture.com.

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For more information about how Accenture can help your organization achieve high performance through use of the Accenture Performance Analytics Solution for Banking, please contact: Omer Sohail senior director-Accenture omer.sohail@accenture.com