By Computerworld Philippines Staff

As the aftermath of the global financial crisis eases in at the start of the year, companies who bore the brunt of the economic crunch scramble to dust themselves off and continue running the competitive race of business advancement. One of the key strategies companies employ nowadays is having the voluminous data acquired over the years work for them, in a system touted as business intelligence (BI).

In Computerworld Philippines’ first CIO roundtable for the year, we invited a set of IT executives from the financial services sector who are looking to embark, have already implemented, or are in the process of deploying business intelligence systems in their respective organizations, to share insights and strategies into the effective use of BI in the enterprise.

In the tight contest for business leadership, making the right decisions for growth is of utmost importance. This is where business intelligence becomes relevant. “BI for me is really a tool for someone to make a fast and intelligent decision. Executives must realize that these tools are now available,” explains Edgardo Dajao, vice president for IT, Philippine Veterans Bank.

Being an enterprise-wide implementation where every person in the organization is a stakeholder, security becomes a pressing issue when implementing BI. “The challenge is to ensure that only those people who have the right to access certain information are the only ones that can access it,” notes Philip Casanova, assistant vice president and information security office (ISO) head, Chinabank.

Having a BI system can help companies relate to their customer base, or use internal data to aid in roadmap planning. Because BI systems don’t come cheap at all, companies need to make sure that the system is used where it matters the most. “Technology will always play a crucial role in the way we do our business, that is, helping the SMEs. Whether BI would be a predecessor of another system or this is it, I can say that I am happy and excited to have BI implementation as part of our roadmap.,” relates Jojo Macaraeg, assistant vice president, information technology and communication department, Planters Development Bank.

This issue’s CIO Roundtable was moderated by Michael Assidao, head, information technology and operations group, Megalink, and former roundtable participant. Don Don Torres, sales engineer of Sophos—which sponsored the event—was also present to provide security insights on BI implementations.

Excerpts of the discussion follow:

Computerworld: How important is BI in your organization and in today’s environment?

Jojo Macaraeg: The bank presently does not maintain a full BI. But yes, this is one thing that we are considering, in one or two years probably.

In my opinion, the competitive advantage of those who have business intelligence tools is they can quickly respond to any changes in the market trends. Not only that, they can most likely be pro-active by offering new product/s, services, marketing strategies– cross-sell / up-sell or remediation programs (for financial institutions) for any anticipated market trend changes.

Edgardo Dajao: In our case, we implemented BI in late 2007. One of the main reasons why we implemented BI is for the AMLA requirements.

CWP: Actually, that’s the main driver, when there’s an AMLA requirement with BSP that you do with data warehouse right?

Dajao: I would say that it’s really one of the main reasons why we have BI — for compliance requirements of the BSP. Anyway, going back to the importance of BI, if we look at the information evolution: from data processing, information systems, data warehousing, then BI now, the main benefit or real reason why we are going into BI is still the same, to make good decisions faster and BI should be able to provide the information fast at the right format, in a way that is easy for people to understand. So in a way, BI should enable organizations to understand the change and identify casual factors as well. This is one of the ingredients that is not found in the previous systems. Furthermore, BI should be able to provide what we call the analytic application, which is differentiating BI and the previous systems. The other benefits of BI is that it should be able to help you analyze risks. For example in a bank, if someone wants to get a loan, BI must be able to define the risks involved in that loan.

Philip Casanova: For our part, we’re just about to finish our BI implementation. But I think the BI need for us is almost similar to what has been earlier discussed. The technology needs to empower our people especially those on the frontline because they need to make decisions, if not instantly, at least to shorten the time for making decisions.

CWP: Mr. Casanova, as a systems security officer, what is the importance of security on all of these business intelligence which contains a lot of confidential information across the enterprise, across the bank?

Casanova: For me, the challenge is to ensure that only those people who have the right to access certain
information are the only ones that can access it. Because once all the information is put in the data warehouse, it’s just one big paper with a lot of information. Companies need to establish access principles and specific rules to filter those who can access information — that has been my mandate. For many organizations, it’s a challenge to determine who is the owner of the certain information. If you want to access the information, where do I get approval, or is that information mine? Whose customer is it anyway? So those are the challenges. Some of these might even need management or board level decisions to determine the owner, or who should be approving access to certain information.

CWP: What are the benefits that you’ve been deriving from BI?

Macaraeg: As mentioned earlier, we don’t have as of now, a full BI suite for our BI efforts. But presently, we have an-off-the shelf application, categorized or classified as Data Mart, which we use for our MIS reporting requirements. And from time to time, IT does adhoc programming or query reporting to assist the management in their “business intelligence” efforts.

But what I can share with you is, our Chairman, Ambassador Jesus P. Tambunting, has given a mandate for IT group to come up with a road map, at least for the next three to five years focusing on the theme “Technology Driving Operations of the Bank.” To improve our lending process, which is our core business, ultimately helping us in serving the SMEs, which (or who?) is our market niche.

Casanova: Among the many benefits coming out of this BI, we are looking forward to have one single customer view. Customer data integration was an immediate activity in the project. Regardless of the
type of account that was opened by our customers, relationship managers will be able to see it. We want to relate with our customers better. Another BI benefit is that it helps us to plan on how far we want to go in having goals and how to achieve those goals.

CWP: Mr. Dajao, when did you start implementing BI?

Dajao: We acquired the system in late 2006 and we made the initial roll out in late 2007. But we implemented the project in phases.

CWP: These are already templates?

Dajao: Yes. There were predefined templates although some degree of customization was made in other areas. In a way BI provides also a reliable presentation of information because behind the scene is how you gather or collect the data from different applications from different platforms. That’s the challenge. And because of the technology, we are able to collect and gather information in different formats and placed them in a data warehouse where we process them.

CWP: Is your data warehouse system different from your BI system?

Dajao: A data warehouse is just a component of BI because without the data warehouse you cannot have a business intelligence. The data warehouse is your architecture to gather data and store them. The BI is the one processing all your applications in that warehouse in a faster way of disseminating the information. One benefit of BI is that it improves customer relationship data because it challenges the organization to have unified customer data that will minimize data duplication.

CWP: Mr. Dajao, what can you say with regards to ROI?

Dajao: If you have taken note about my discussion on the benefits, I did not mention anything yet about measuring actual ROI. As of today, it is still something being addressed. The investment is not cheap, of course. In our strategy, we do it in phases, like what kind of data will be part of this BI phase — will it be operational data, will it be CRMs related data or whatever? We focused first on the AMLA requirements. Our benefits from it may not be directly computed to the ROI since the driver is the AMLA compliance. Then we do the add ons in the next phases. We made use of compliance as one of the justifications in implementing BI and being compliant is part of our ROI.

CWP: Who’s the owner of BI in the bank?

Dajao: I would say the drivers are the risk and compliance departments.

CWP: How about in ChinaBank?

Casanova: We will have a BI unit in the bank that will be under our Customer Marketing Division.

Dajao: Initially the risk and compliance risk units are the owners or the drivers but since then it has evolved and other departments are able to get to know the benefits of having the right information fast. That’s why those in marketing also got involved in the picture. So the driver has become almost the enterprise already in terms of information needs.

CWP: For Mr. Macaraeg, what do you think would be the challenges if you will embark in a business intelligence system project considering your resources right now and your technical skills that you have in your people, and of course the cost?

Macaraeg: From what I’ve been hearing and reading, the following, in no particular order, are the critical success factors of a BI initiative: full support of the management; data quality—garbage in, garbage out. The earlier this issue is addressed, the better; and the evaluation process. Getting a BI system which will perfectly (or near-perfect) suit the Bank’s requirements, functionally and economically.

CWP: How about you, Mr. Dajao, you’ve implemented the system for two years. What problems did you have to address along the way?

Dajao: The first and foremost challenge in the implementation is defining who should have access to what information. It’s like what Philip said earlier as a security issue.

CWP: But who’s in-charge of the definition? The security officer?

Dajao: The security officer is there; audit and risk are there. So a lot of people are involved in the definition of who should have access. And I think I consider that as still a challenge as of now.

CWP: Would you recommend or suggest that as what Mr. Macaraeg mentioned early as part of the challenges he sees in the evaluation process is that users be a part of the evaluation process?

Dajao: Yes. When you evaluate the software part of your evaluation are standard reports needed by the users. But the moment you do the project, users will start to ask for more detailed stuff. One more thing, producing predictive models is difficult especially if you do not have experienced statisticians.

CWP: Among the items that you’ve mentioned, what’s the most challenging part?

Dajao: The development of many models and related reports really affects the project timeline. It’s like we have done so much already but their utilization must also be proportional also.

CWP: Mr. Casanova, since there’s an ongoing project that ChinaBank is doing on BI what difficulties have you seen so far on the project roll out?

Casanova: Most of them were already mentioned by Ed, like security access definition, it can really go up to the board level because different information stake holders. Data quality of course is also a very important issue and it’s really a challenge.

For me, what I want to highlight as a challenge is when the system is already in place — this is about the ROI on usability. Providing the tool is one way. But driving the enterprise to be innovative, to maximize
the tool is another issue.

CWP: Is it about meeting user’s expectation?

Casanova: Yes, it is meeting users’ expectation and likewise users’ meeting the bank’s expectations.

Models are also something that I think is important here. I believe what will differentiate a good BI system from another is the quality and quantity of the packaged models and reports.

Asiddao: I just like to share that in my experience, there are certain systems that are very difficult to extract data from. Probably because the time when you stick with the system it’s a very close database
that you cannot even wear it out. You have to wait for it. At the end of the day, you extract data from the information from the report generated, those kinds of challenges. Like what Ed mentioned earlier, the difficulty of the infrastructure is what causes delay. Complexity, as you both Ed and Philip mentioned, it’s better if you throw it out to the users who tend to be excited from the start. But when they see the complexity, the difficulty of using it, they throw it back to the IT. So the user’s expectation is not met.

And there are certain things that you’ve mentioned that are quite interesting, like there is too much customization. Now, the expertise on statistics, that’s always been the challenge because the end-users will expect IT to do all of these even the various decisions. And not all of us specialize on that. We are not statistics majors or statistic gurus for that but at the end of the day, users would ask us to do this for them. That’s actually the challenge, and Ed confirmed that the prevalent issue has always been who has
access on the system because the information, especially you guys who work for a bank, know that they are very confidential and there is regulation and you can be jailed or sued for that. That’s why BSP’s
regulation is very important and we all always have to be on guard about it. And with all these challenges, most of the problems that IT see on a BI implementation is that there’s a lot of stake holders. It’s an enterprise-wide project. Many are asking for this and that, and if you’re not careful on the data that you give out to the people then it could be very risky.

Macaraeg: I have a question for Mr. Dajao and Mr. Casanova. Who do you recommend or suggest between a systems integrator (SI) or consultant for this initiative? Do they really help?

Dajao: In our case, it is the vendor who acts as our consultant as they are the ones who are supposed to be knowledgeable about their product. Consultancy is part of the package because BI was something new for us then. Choose a vendor with experience and know-how and not just a vendor with a product and with no background in the implementation.

Casanova: For us, we hired an SI.

CWP: What do these SIs do? Are they independent from the bank and independent from the vendor?

Casanova: Yes. They provide methodology, expertise of how to implement and they will guide you on the data cleansing part. It’s good if they have worked with a bank before because they know the challenges already.

CWP: What are the success factors of a BI initiative? What should be there as the building blocks before you embark on this one?

Dajao: First and foremost, there should be support from the executives. That’s a must in every IT project. Second, you must have a good project manager (PM). In our case, the project manager is someone internal.

CWP: When it comes to BI, business process re-engineering often takes place. What should come first, the re-engineering or the BI itself?

Dajao: Ideally, you have to re-engineer how you want it to go. Because you now have a tool , you may do things differently as you would have done it manually. Eventually, you have to modify something.

CWP: But there should be a base line of what is right now and what is the future. Which should be documented?

Dajao: Documentation is important at every stage but what’s arguable is the degree of documentation. You may document procedures in bullet-from and that’s done so we’d know the “from” and the “to”.

CWP: Is there a sign off once the final output has been achieved?

Dajao: It’s part of the UAT. Even the transition procedures are signed off. You have to manage the expectations of the users in the system, so that you can manage the project well.

CWP: How do you monitor whether the ROI is achieved or not?

Dajao: Offhand through the turnaround time. By measuring how fast you make a decision, and whether the decisions are sound or not based on the inputs.

CWP: How do you do that? Through the departments or the unit?

Dajao: This is where our standardized metrics come in.

CWP: And where are these reported? To the board level or to the department?

Dajao: It has to be reported to the board level.

CWP: Speaking of training, in what part of the project would you train the users?

Dajao: Before we roll out the project, there’s a formal training for all people who would be running the system.

CWP: So if you’re going to go back and start all over again, what foundations should you lay before you embark?

Dajao: For me, business intelligence is just another IT project. At the end of the day, whether your system is simple or complex, it’s the kind of users that will matter. So you have to manage change, to make people receive change as fast as they can.

CWP: So are you trying to say that a BI project is not just technical, it’s also emotional and subjective?

Dajao: Implementing a BI system requires deploying it to the enterprise level. There will be some departments that are receptive, and some that are not. So you really have to manage the project well.

CWP: Mr. Casanova, what do you think would contribute to your BI project success later on?

Casanova: One good thing the bank did was to have a good executive sponsor, someone who can really
drive the project across the organization. Just like what they said, this is an enterprise-wide implementation. We need somebody in the organization powerful enough to sponsor it.

CWP: In Chinabank, who is the sponsor for this?

Casanova: It’s with our customer marketing division but it’s under corporate planning. The project sponsor must have visibility at the board or management level to drive the project forward. It’s not just an IT project; IT is just one component. It’s hard to make people follow and to manage their expectations. Our project has been moving because of good board and management support.

Another success point of the project is when we get to the maintenance part of the system. There will be a specific unit overseeing and driving the usage of the tool. They will make sure that if the users need anything, they are there to help. They make sure that the needs of the business units and the bank are met.

CWP: How about you Mr. Macaraeg, as you embark into implementing a BI system, what would you need to make this project a success?

Macaraeg: As I’ve said earlier, we’ll need management’s full support, consider the quality of data, a good evaluation process (vendor/product selection) and an effective implementation strategy. You don’t just dive into it. It’s going to be an enterprise-wide implementation. Everything must be carefully and deliberately planned and executed.

CWP: How will social networks such as Facebook and Twitter affect your BI initiatives? Because it is highly possible that data coming from external forces will come in to the system.

Casanova: For the likes of social networking, I think we can maximize this to reach out to the Generation Y. Social networks can be a good source for customer profiling.

CWP: So as a security officer, you are open to that?

Casanova: I’ll be open to that given some controls. With the likes of Software as a Service (SaaS), I’m still not into it because it means that some of our data, if not all, would be place outside our facility. It could be covered by a confidentiality or privacy agreement but I don’t have 100% assurance that it will be complied to.

Dajao: Social networking applications are not allowed in our bank as of now. We are not looking at these things right now. Our current focus is to maximize our use of the BI. We are not looking at people getting information from the outside via these social networks.

If you allow your people to input data from the social networks, there’s a data quality issue. Who would filter the information? You would need another unit to do that. So for me, there are a lot of issues with
social networking right now vis a vis BI. Furthermore, it has effect to the storage infrastructure.

CWP: What do you think should vendors do to improve their BI offerings?

Dajao: It’s more on userfriendliness. The measure is the number of executives who get the information by themselves from the system.

Next would be maintainability. A good BI should have seamless integration of data from old and new systems, the legacy and open platforms, and with different database structures. This is where the
expectation is not happening sometimes.

Casanova: I can only think of one thing – provide cheaper industry-specific modules to make the deployment easier.

Macaraeg: This will be true for any type of application or system – our dear business partners should make their solutions more affordable. That way, more institutions can have or afford their systems. More end-user experience, more inputs to their R&D, and vice vers better product (assuming the vendors do their R&D effectively). That’s BI in full spectrum – from the vendor, to the end-users, back to the vendor, then back to the endusers.

Asiddao: Just to share a little bit of what I want with a BI system, of course the primary concern is cost. Another is for them to be able to sell me something like a vanilla type of installation, because sometimes
I have no use for the other features of the system. I have to pay for it but if you tell them that we don’t need some parts, they will say that it’s part of the whole package and maybe we can get a use for those in the future. I tell them, “Can I just pay you in the future for that?” I think that’s something that needs to be addressed.

CWP: To wrap up, do you think BI would be a predecessor of another system in the future or is this what it is?

Macaraeg: Technologies come and go, so we will probably have another buzz word in the next few years, succeeding BI. What I can say is, business requirements and technology will always be together,
complementing each other. Technology will always play a crucial role in the way we do our business, that is helping the SMEs. Whether BI would be a predecessor of another system or this is it, I can say that I am happy and excited to have BI implementation as part of our roadmap.

Dajao: BI for me is really a tool for someone to make a fast and intelligent decision. Executives must realize that these tools are now available, and all they have to do is get their feet wet and try it so
that they may come up with their own success story in the use of BI.

Casanova: BI for us is really for empowerment, and part of it is not only giving them the tool, but also making sure that they know how to use the tool intelligently. It’s like giving a weapon to somebody—if
they don’t know how to use it, they cannot defend themselves eventually. So you need to help them appreciate the possibilities, help them innovate, help them come up with great ideas for their organization with these tools. For me, the important thing upon embarking on a BI system must be full support from the management and empowerment of the end-users.

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• Data Recovery– Riding Through The Chaos
• Mitigating the Risks
• Greening the Workplace

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