Implementation Guides

Rapid ROI with BI Deployment

PCQ Bureau

01 May 2010 08:06 IST

New Update

SKS Microfinance had certain unique requirements that demanded the deployment

of a Business Intelligence backbone, which was agile, but flexible and

upgrade-friendly. Most transactions that SKS handles are remote transactions

that happen across its 2000 branches spread across the country. The first

obvious requirement was a centralized dashboard which could monitor each of

these transactions at a very deep level — by location, by branch, by nature of

transaction, by vendor, etc — and a mechanism to identify irregularities.

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Scenario before BI

Before this deployment, transactions were logged into Excel sheets and the

head office had to collate and analyze them. This required skilled manpower, and

often, knowledge of specific analytical tools and operations. In order to

increase efficiency and speed up the data transfer across branch offices, and

also to determine if the business was moving in the direction of projected

business growth, SKS Microfinance decided on having a personalized Business

Intelligence framework.

Main concern

The requirements — or rather challenges — that the BI framework had to

solve, was defined primarily as Data Consolidation. Data had to be pushed into a

central repository, transaction status checks had to be made possible — of cash

collected, deposited, in transit — and the system needed to have an

'intelligent' mechanism to compare and contrast with goals set. SKS partnered

with Wipro who custom-made this solution.

SKS Microfinance claims that the Return on Investment of the BI framework has

been reached in a period of 6 months itself. But interestingly, a new problem

has cropped up.

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We started seeing ROI in the second month itself, in terms of better cash

management

Pradeep Kalra, CIO, SKS Microfinance

What are some of the unique challenges in the

business domain you operate in?

Microfinance is a game of numbers — extremely precise

and exact money transaction figures are the backbone of our operation. The

challenge is to make sense of transactions that occur simultaneously across

different offices, locations and time periods. A centralized resource needs

to make sense of these transactions and business decisions are closely

linked to these. Another challenge is that if you already have deployed any

form of IT in one location that is different from another, it's a mammoth

task to collate information from these two locations in a common plate.

What has been the single biggest benefit of the

deployment?

The high point of the deployment was the fact that the upfront

investment was not very high, and SKS has realized that getting real-time

status of the business is invaluable and helps streamline business processes

and therefore aid in making better business decisions.

When do you expect to realize the Return on

Investment for this project?

Sounds too good to be true, but we started seeing ROI in the second

month itself, in terms of better cash management. The hurdle in remote

locations is more environmental than technological, but we are committed to

using technology to solve this issue in the weeks to come.

Could you elaborate on the plans for rural areas?

The biggest challenge in rural location where SKS has operations is the

fact that power is extremely scarce and unreliable. A business intelligence

deployment demands non-stop power and absence of power puts us in a worse

situation than we previously were in. We have realized that this issue needs

to be addressed with priority. On one hand, we are looking to deploy

hardware that can either run on low power or alternate sources of energy and

on the other hand, we are looking to arm the current workforce with handheld

and mobile devices to ensure that data can be updated from any location —

even if the personnel is on the move. A mobile data input mechanism also

eliminates the need to have trained personnel, especially in remote areas.

So whichever way you look at it, it's a win-win situation for us.

Do you have future plans for this BI project?

SKS Microfinance is a company that is rapidly growing and ramping up. Add to
this the fact that we have already started seeing the ROI for this project,

and it is very clear that intelligent data input, integration and

understanding will remain core to our future plans. We would extend the tool

to our newer locations, and our relationship with Wipro and other partners

will continue in this regard. With minor changes to the tool, we would be

able to incorporate more data volumes from various locations as and when we

ramp up.

Remote connectivity issues

Some of the company's 5000 odd branch offices are located in remote areas

where availability of power is around 6-7 hours in a day. The unique business of

a microfinance company demands that data cannot wait for long hours before

getting recorded. SKS estimates that 5-10% of operational efficiency directly

translating to profits is affected by this single reason of power shortages.

Future roadmap

To solve this problem, SKS has in its roadmap, a plan to simplify data

uploads, by employees located at these remote areas. This would translate to

using mobile or smart phones to input transaction data.

Incidentally, this would also eliminate the need for trained personnel at

remote locations. Hence, in the next stage of the BI deployment, SKS hopes to

further increase the frequency of data uploads and a more agile and active

central repository.

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