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“By using Montage as our strategic partner to maintain the system, we calculate we’re saving around 30 percent on what it would cost us to do this ourselves".
Established in 1869, SBS Bank is believed to be the first building society in the world to have achieved bank registration while retaining its mutual structure. Mutual ownership means SBS Bank is uniquely positioned to provide benefits to its members. SBS Bank has 16 branches across the North and South Islands, with mobile mortgage managers in Auckland and Christchurch, a New Zealand based 0800 Contact Centre, and a full online banking service.
With all the challenges of being a successful New Zealand owned bank in a large and intensely competitive industry, five years ago, SBS and Montage set out to lift SBS’s advantage through a Business Intelligence Discovery process. It helped SBS reach a platform from which limitless opportunity awaits.
SBS Bank began in 1869 in Southland as a building and investment society with one focused aim. It would finance people into homes by encouraging people to invest in the business, a highly successful form of mutual co-operation. Based in Invercargill, it soon became the largest building society in the country.
Over the decades, it built on its strengths of careful investment and financial management, opening branches in other parts of the city and in Gore and in the late 1980s, moved into Christchurch, Dunedin and Queenstown.
Over the next 30 or so years, it spread further throughout the country and achieved its goal of full bank registration. By 2016, SBS had $3.41 billion in assets and $2.87 billion in loan advances, with a national footprint through branches, mobile bankers and digital presence.
Montage, the Christchurch-based Business Intelligence (BI) specialists, had been working with SBS since 2007. The company knew how the bank worked in terms of Business Intelligence, which essentially is using technologies to provide timely, accurate information and analysis to support better decision-making.
The bank’s BI was delivered through a 1.5 person team that was part of the IT department and was based largely on Excel-based reports produced department by department, while its banking system was on Jade with a SQL server as a reporting database.
In 2011, the bank was reviewing the structure of its management team. Montage, through CEO Tony Millar, proposed that the change presented an opportunity to restructure roles for the future through the implementation of Montage’s Business Intelligence Discovery process.
It was a major piece of work, requiring total buy-in, commitment and focus. The Montage method covered three distinct periods – first, the Discovery process, then enabling through further stages so that SBS BI became self-sufficient and finally ongoing support.
Thorough knowledge of the business and objectives were a given. The key objectives and drivers of the bank had to be understood. For BI to succeed, there had to be a common language and framework. And what was the current state of capabilities?
To answer that question, Montage had established a scorecard to look at the people, processes and technologies and their capabilities in the critical areas required for a successful BI programme. They included stakeholder engagement and governance, requirements of the business and the delivery of three levels of information – strategic, tactical and operational.
Other requirements were the studying of information layers, the existing form of data warehousing along with an examination of data and applications.
Key initiatives and associated complexity had to be understood while an optimal solution meant future state options had to be considered. A road map would be required to ensure the delivery of content across time matched current and growing capability of the organisation.
A Discovery is designed to ensure an organisation has an optimal BI solution that is scalable, flexible and cost-effective. In the experience of Tony Millar and Montage, however, the key outcomes of a BI Discovery were not in the hiring of numerous resources or buying the latest and greatest technology. Instead, good processes were the key to achieving the “optimal solution.”
Work began. Workshops were held to review the landscape with staff and to explain how the process would work.
Interviews were held with stakeholders, with key focus areas being finance and risk. They allowed a “current state” dashboard to be produced analysing stakeholder engagement, requirements, delivery, information and data against people, process and technology.
For its part, SBS produced its own BI paper, setting out the organisational strategy and objectives it wanted to see. Staff needed easier access to information to enable better decision-making. The business needed to be able to analyse that information to determine and detect trends and be able to respond to market demands in its highly-competitive world.
In total, 12 separate but linked activities were carried out before the Discovery could be considered complete.
One of the most important steps of the Discovery was to benchmark SBS against other organisations to know what its “optimal” should be.
Montage introduced SBS to two quite different organisations in terms of resources and budget with offsite sessions helping to shape what the future could look like for SBS.
From all the Discovery work, two key outcomes and recommendations emerged:
- SBS should engage a dedicated BI Manager to manage stakeholder engagement, governance and lead the BI function - the people, the processes and the technology - within SBS to deliver the roadmap.
- To be effective, data had to be transformed to usable information. The critical area of BI is ensuring an organisation has a single consistent and reliable source of data for decisions, i.e. development and implementation of a data warehouse and processes to ensure a scalable and flexible solution.
HR Manager Mike Petterson had been in his role for about 10 years and had experience elsewhere in banking before coming to SBS. He liked the sound of the new position which was an opportunity to develop and grow with SBS. His earlier IT project experience and skills were easily transferable to a role as BI Manager.
Besides IT project experience, the role also required continuous analysis of the business and working with a new BI architect to ensure only constantly-governed quality data went into the data warehouse.
Project management was also important – delivering on time and on budget. The successful applicant would also be responsible for programme management, managing executive stakeholders, governance and the important roadmap. The role also required management of BI’s internal team and vendors.
A BI Manager was often the lead technical resource in many organisations. But with the change required for the areas identified in the Montage BI scorecard, Tony Millar suggested broader thinking.
Interviews, Tony Millar could see, revealed Mike Petterson had all the necessary attributes to lead SBS through a programme of change. He could see Mike had strong relationships within the company and connections with the executive team and managers from whom he could find out what they wanted from BI and convey that back to his team to deliver.
BI as a function would have its own identity and it would sit with the Finance team, not IT. In time, staff would increase from 1.5 to four.
Montage recommended Mike be appointed; the bank agreed.
The project didn’t create a lot of noise within the organisation. Initially, it was about establishing a framework, “building the machine,” the team structure.
But it was also about engaging with the executive team and asking: “What is it that you don’t have that you’re looking for?” That was a change – before then, BI had been reactive; now it was proactive.
Some quick wins followed. There was a thirst for “real” information about overall lending enquiry and activity, understanding not just the business the bank was writing, for which reporting already existed, but also creating visibility for all lending enquiry activity so that it could track how much the business was converting, what cross-sales it was achieving and so on.
Mike thought that would be straightforward but at that time there was no core system to record lending activity information. It was all held in traditional files and spread sheets. To be able to report back to management, the BI team needed to build a source system. It created some online recording tools for those staff linked to a SQL database.
That was not BI – it’s usually at the end of information not the source - but the business challenge was there so Mike and his team solved it. The development of an end-to-end process was one of the first wins.
The second and vitally important step was gaining efficiencies in reporting across the business. BI automated branch and area end of month management reporting through a standard structure working with the relevant general manager. That had a significant impact on efficiency of the task with the automated processes now handling all the manual collation of data. That was also a considerable time-saving freeing up managers to spend more time on business development.
Management had better access to timely and standardised information due to the consistent reports now being generated.
Concurrently, a new data warehouse was built for the standardised information and the existing core banking system integrated in one data warehouse to deliver much more efficient and enhanced reporting for decision-making.
Montage itself was now in stage two of its approach, enabling SBS through all the necessary phases. It recommended SBS buy Wherescape RED.
As Mike would say: “The first few months were quick wins and delivering low-hanging fruit. The next 18 months to two years we concentrated on building our data warehouse which was intended to be the single source of truth.
“While we were developing that, we had to keep delivering whatever the business wanted to our internal customers. We prided ourselves on how we delivered that. Our turnaround times are usually hours and days, not weeks and months. And that comes from the data warehouse and team focus. Once you have things organised, your speed of delivery improves.”
It also took higher levels of skill and development. Tony followed through with recommendations for further training for BI staff. To be able to build the data warehouse and deliver to the business, the capability of the BI team had to develop as well.
They studied the Kimball methodology, named after Ralph Kimball, a world-recognised expert and author on data warehousing and business intelligence. Kimball was convinced that they had to be understandable and fast, key to which was improving report writing and SQL reporting.
The extra training was timely because Mike had already noticed that as the new department became the one-stop shop for reporting, more and more requests for information were arriving, mostly from the executive team. They were able to deliver quickly and effectively.
Importantly, they made all reports available to all staff throughout the organisation via the intranet hub. They created a data extract tool so that a staff member could go on-line and insert required data parameters - within seconds they would have the required information, instead of having to wait two days after they asked for it, depending on how busy the BI team may be.
“The data warehouse is now here, we continue to add to and enhance it, we don’t have to build it from scratch. We add to our reporting capability and skill development as each request comes along.
“We’re not finished but we’re in a much stronger space against that scorecard that the Discovery process gave us at the time. Then to now, we’ve come a long way.”
Feedback from the management team had been very positive. What they ask for, they get quickly and accurately.
“That’s important because they need to make decisions about aspects of the business,” he said. “It might be something like a marketing promotion in certain products or areas. We work with whoever is driving the project to make sure we have the measurement criteria and mechanism in place from the start.
“For example, if we’re going to put a special out there that’s designed to increase lending activity, we need to be able to measure its effectiveness during and after.
“We did a market-leading lending special last year. It attracted a huge amount of activity and lending growth around the country. We were tracking that activity through the reporting we developed so that day by day, week by week, the management team could see what was happening.
“I get excited when our retail banking and agribusiness people say: ‘We want to do something. Can you help us?’ - And then we’re able to deliver what they need.”
He had sincere praise for Montage’s work. “Montage and Tony in particular have been great to deal with in a mentor role and through connecting me with other people in the BI industry.
“Tony pointed me in the right direction with development tools like Wherescape RED and the Kimball training for the team and I. Our goal was always to become self-sufficient. That was an outcome of the Discovery we wanted to achieve. Overall, it’s worked and it’s continuing to evolve.”
SBS and Montage are now in the third phase, Advisory and Support. “In the early days when we were doing something for the first time, one of my team would work with a Montage developer, or undertake a training session,” Mike said.
“The need to do those things has dropped away in the last two years but Montage continues to be a source of information and support. I think we’re a real partnership in that sense. “I know this is Montage’s approach as well. They don’t want so much to be the ‘doer.’ It’s about building capability.”
Future focus is moving deeper into the “so what?” – Analysis of existing information. Then comes predictive analytics – given what SBS knows now, what can the bank infer from that information and what can it do with that knowledge to maintain relevancy and excellent service for its members?
“There is a lot of scope for us to do more on the analytics side. We’ve always had analysis going on in the business but we’ve got more data and more information available to analyse yet.
“It’s not a job where you can say you’ve finished – there is always so much more to do.”
As it captures more information, SBS has become better and better at knowing its members and what’s important to them.
“We do things already but there’s so much more opportunity there,” he says. “Having a Business Intelligence system gives you an advantage, especially in decision-making.”
Since the BI discovery process began, BI became part of the Strategy & Marketing Team, underlining that BI is a business partner rather than a technology provider within the bank. But the BI Discovery Montage instigated five years ago mean SBS’s foundations are rock-solid, its information systems excellent and still improving while its future is boundless.