The data repository
Sub-ledger, super-ledger, data mart, data warehouse, whatever approach and whatever terms are used, anyone rejecting the thick GL and wanting to go for a strategic approach will need to build the data repositories to support this.
There are roughly three lines of thinking: 1. Try to build a single data warehouse which will house everything needed for risk and finance, with reporting directly from here.
2. Build separate data marts, probably one for each business unit, with the relevant risk and finance data then drawn from here.
3. Have a mix of the above two options, with a primary data warehouse but data marts in front of or behind this.
It does look as though, whatever route is taken, it is a case of building the data repositories from scratch, rather than trying to adapt existing ones. This is due to the pressures of uniformity and reliability, with the data needing to be fully reconciled and balanced, and with everything also needing to be traceable. Such rigour is not needed in other areas. So, for instance, at ABSA, those stringent requirements ruled out any initial thoughts of taking its existing data warehouse and adapting it for compliance. The existing warehouse had been in place for some time and was largely used for marketing. For this area, if a figure is slightly out, it is not an issue; for compliance, the integrity of the data is clearly key. As the bank’s Dr Conor Hughes said: ‘It [the marketing warehouse] is a very effective tool for producing business analytical reports but not for something as stringent as compliance’. Of course, it is not sufficient to merely populate a
repository – there is then the need for easy to use, flexible analysis and reporting tools. Having completed the Basel II part of its project, Bank of Ireland subsequently added SAP’s profitability analysis module within a nine month project and hooked up Oracle Financial Analyzer, with the latter feeding in trial balances to SAP where they are reconciled. This was within a project called ‘One Finance’, which was intended to bring all finance business functions into a centre of excellence. For reporting, the bank was using IBM’s Cognos in corporate banking but, said the bank’s project manager, business performance measurement, Paul O’Sullivan, in total it had 19 business intelligence and management information tools (including Hyperion). It wanted to standardise on one and Business Objects made the shortlist of three on the strength of its front-end capabilities, SAP also made the cut on the strength of its back-end, he said. IBM Cognos was the other on the shortlist. With SAP’s acquisition of Business Objects, the two companies decided to bid with the latter’s offering – ‘if they hadn’t, we’d have been shocked’, said O’Sullivan. SAP
wouldn’t have bought Business Objects if it had felt that its own business intelligence tool was as good, he pointed out. Tighter integration with the SAP back-end was attractive and the deal was duly signed in March 2008. The next step was a business and implementation plan, with HP as the bank’s infrastructure partner. The bank was in a good bargaining position, O’Sullivan pointed out: ‘SAP was keen to do a sizeable deal straight after the merger of the companies’. The down-side was that the bank’s implementation would run in parallel with SAP’s strategy to merge the tools into its overall product set, so the bank might ‘suffer slightly’ and could be something of a guinea pig.
O’Sullivan was hopeful that the first key deliverable would constitute a ‘monthly executive performance pack’, followed by cost centre reporting. Long-term, having one tool should unlock the information. ‘The business doesn’t appreciate the quality of the information in SAP,’ he said. Getting that information should be the equivalent of booking a flight on the internet. It also needs to be trusted: You can go off and develop lovely reports, he observed, but the biggest challenge is getting them accepted and believed. If there is the confidence from end-users in the output, then word of mouth can help the acceptance process, he added. Quick wins were also deemed important, so the bank planned to introduce a ‘sand-pit’ area, where it would hook in the Business Objects tools to SAP and non-SAP systems to give executives early information, with the pilot solutions being replaced by fuller solutions over time. In addition, it planned to make information available via mobiles and, ultimately, via Blackberry devices (the latter capability was announced by SAP at its Sapphire user group meeting in May 2008, working with Research in Motion). Another priority for SAP was to link the Business Objects tools to Bank Analyzer.
The single data warehouse
Despite the scale issue, some reasonably large banks are heading for a single data repository. Bank of Ireland’s initial plan had been to go with business unit-based solutions but it ended up opting for an holistic approach, despite the challenge of size. All models for all business units, including international operations, would work off the central data warehouse. A key reason was the need to reconcile risk and financial information, a requirement which did not exist in the past. There was a lot of emphasis on both the data quality framework and technical framework. The bank considered an in-house development before opting for SAP and Accenture. Bank of New York Mellon, eschewing the reluctance of some of its US counterparts to press on, set about defining its data model, building a central data repository, and putting in place all of the surrounding components. The bank decided
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