Today, investment managers are an important part of personal financial planning. They take money seriously-it`s their job. In the United States alone, the assets they manage have grown to nearly $800 billion. Investment managers look to brokerage firms for comprehensive services and a wide array of investment vehicles to help them serve their clients.
They insist on easy access to no-load mutual funds, discounted commissions on large equity trades, efficient operational support, and accurate account administration. When they want to provide clients with some of the most flexible options available, it comes as no surprise that investment professionals choose Charles Schwab.
Headquartered in San Francisco, CA, and employing over 12,000 people, Charles Schwab is one of the world`s largest discount brokerage firms and is also the largest provider of services to investment managers. Schwab Institutional, a technology-driven division of Charles Schwab, employs over 1,000 people and holds nearly a third of the entire firm`s assets, worth $106 billion, under management. Its clients include over 7,000 investment managers who represent 547,000 investor accounts also housed at Charles Schwab.
Charles Schwab has always provided leading-edge technology for its customers, which requires an equivalent investment in the internal technology infrastructure its employees need to do their jobs. The rapid advancement of online and client/server technology has had a major impact on the services available to Charles Schwab customers, but the organization`s internal information management system, based on mainframe technology, was not designed to evolve as quickly. The MIS department`s ability to competitively manage the division was being compromised. Two years ago, new management was brought in to address this disparity and to eliminate the 50 or more outstanding requests for ad hoc reports sitting in a queue each business day. According to John Michael, Director of Schwab Institutional MIS, these requests represented only a fraction of the total requests throughout the division. "Most employees simply didn`t bother making requests because they knew it would take too long to have them fulfilled," he explains.
Michael`s team was given the task of integrating data resources across the division-from marketing, sales, finance, and operations-to provide a state of the art tool for functions as diverse as customer segmentation and discount pricing models. By integrating leading-edge technology, he and Sergey Muza, Director of Schwab Institutional Application Development, began to implement a plan to upgrade internal systems to a level comparable with the best of the division`s external systems. They needed a system that could adapt to various departmental needs and provide users with a range of functionality, such as modeling, forecasting, Executive Information System (EIS)-style reporting, and budgeting. Once the general requirements were determined, Michael and Muza had two choices: either work within the confines of the mainframe system`s limited capabilities, or use OLAP, client/server advancements, and new hardware to upgrade the system to current technology standards. They chose the latter.
During an extensive review of products suitable for the project`s requirements, Michael learned about Seagate Holos at an OLAP presentation led by Richard Creeth, co-author of The OLAP Report. Seagate Holos stood out from many other products discussed because it could report off of both relational and multidimensional data, it included a powerful application development language, and it consistently received outstanding referrals from other users.
Early in 1997, Michael`s team began testing the capabilities of Seagate Holos for building reporting applications, linking relational data, and loading data. They built a sample modeling and reporting application and were immediately impressed with its flexibility. They also learned how to use Seagate Holos without relying on consultants. "We weren`t going to buy any product that we couldn`t learn ourselves. Once you learn how to use Seagate Holos, you can do anything you want," explains Muza. It was barely installed when an extremely high priority request arrived. Given the choice between viewing a handful of "dead" reports on the mainframe system, or creating their own ad hoc reports from a new system connected to "live" data, users applauded the decision to standardize on Seagate Holos as the development environment for the project.
Another advantage of Seagate Holos is its ability to run on a variety of hardware platforms The system at Charles Schwab runs on Sun hardware, a corporate standard that is easy to use, scalable, and extremely flexible. "The combination of Seagate Holos and the Sun Enterprise server gives us a high-performance, reliable, and robust system," says Michael. "Seagate Holos delivers real business benefits to us and has exceeded all of our expectations for managing and delivering information. We amazed the entire company by providing them with powerful analysis capabilities they never imagined before-in less time and at a much lower cost than anyone would have believed possible."
Approximately 50 users can currently access over 8,000 large household accounts through the system; 200 users will have access to these accounts once deployment is complete. Up to 45 different measures relate information on all customer activity. Account managers can compare pricing relationships and forecast five years in advance; as commission tables and rule tables, the pricing possibilities are limitless.
"With Seagate Holos, we were able to build an excellent pricing model for Schwab Institutional sales, which is a core function of our operation," notes Muza. "Seagate Holos is extremely flexible in interacting with UNIX, Oracle, and PC applications." Users can create scenarios based on their analyses and then e-mail them to others. The Seagate Holos system provides a customized interface for each of the following four department-specific applications:
- Marketing-Includes a worksheet for modeling, setting views, and interacting with data. The marketing department can now segment information in ways that were not possible before. Users can simply view canned reports or analyze them further with the worksheet.
- Sales-Enables users to view canned reports through a simpler interface; they do not require in-depth analysis capabilities to model profitability and make client presentation-quality reports.
- Finance-Provides functionality for modeling, forecasting, and budgeting. The budget application can update and recalculate reports interactively for multiple users.
- Training-Provides a variety of functions so training teams can customize programs for marketing, sales, finance, and operations.
Future plans include linking Schwab Institutional to Holos Web so users can access information remotely via the Web. Schwab Institutional is also considering plans to provide mid-level data access and analysis capabilities and direct reporting functionality to external customers with Seagate Crystal Info, an enterprise-scalable system that enables users to access, analyze, and distribute information across the enterprise.
Using Seagate Holos, Charles Schwab easily met its time and budget goals. Technologically-enabled marketing is now possible throughout the organization and the queue of 50 ad hoc requests is gone. The Seagate Holos system provides one consolidated source of data that can be used by all business divisions, updates are quick and transparent to users, and the system adjusts profit calculations daily as business requirements, stocks, and clients change.
With the help of Seagate Software, Charles Schwab continues to lead the industry by providing some of the most technologically advanced investment services available to meet the demands of an increasingly competitive marketplace. As technology continues to make managing investments more sophisticated, internal employees and external clients can benefit from a comprehensive information management system designed for the future. Like all shrewd investors, Charles Schwab plans for prosperity over the long term.
Technical Infrastructure at a Glance
Server: Sun Enterprise 5000Operating System: Windows 95 and Windows NT
Database: Oracle 7.3
Database Volume: 100 Gigabytes
System Usage at a Glance
Information extracts come from a legacy data warehouse on the mainframe. Eventually they will come from an Oracle corporate data warehouse on a Sun Server. These extracts have been transformed as necessary for Year 2000 compliance and loaded into Oracle databases in the divisional data mart and processed as necessary. As part of a data mart, the Seagate Holos application extracts the Oracle relational data from the data warehouse and uses it to populate multidimensional OLAP cubes. The Seagate Holos clients then access these multidimensional cubes.
Drill-through and compound structures are employed extensively throughout the system. Each individual structure stores at least one gigabyte of data with a limit of two gigabytes. The compound structures use both ROLAP and non-ROLAP measures. Data is loaded into the system every month; eventually data will be loaded every week. With the Oracle database containing 35 tables and 2 million rows, the time required to load the system is approximately eight hours.
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