Coventry Building Society is the UK`s seventh largest building society, employing 900 people at more than 50 branches in the Greater Midlands. It is currently enjoying strong growth in a very competitive market. Results for the first half of 1998 show that net mortgage lending has doubled and savings receipts have nearly quadrupled compared to the corresponding period in 1997. The Coventry claims that this reflects business captured at the expense of those societies that have converted to banks.
One of the factors contributing to the Coventry`s recent success is the implementation of new core systems for administering mortgages, investment and insurance. In the past, these systems ran on a Bull mainframe computer, but there was a need for a more flexible platform that would allow the Coventry to react to market changes and introduce new products quickly. Over a five-year period ending in January 1998, a UNIX-based system was introduced.
In conjunction with the downsizing project, the Coventry decided to implement a new reporting solution. In the past, reports were written in-house using COBOL, but this approach suffered from substantial disadvantages. The main limitation was that a completely new report had to be written whenever there was a need for a different view of the data. To achieve greater flexibility and to provide users with the information they required more quickly, the Coventry decided to implement Seagate Software`s Seagate Holos Business Intelligence system.
The first Seagate Holos application, which went into production in August 1996, was a mortgage model. Although the primary use of this application was to produce statutory reporting for the Building Society Commission, end-users could also produce their own reports and perform multidimensional analyses. Initial response to the system was very positive, and a variety of other models were then developed, with managers having the choice of printing standard reports or carrying out their own analysis. The transaction model, for instance, analyses each day`s transactions by product and by branch. It is used widely by head-office staff.
"Before we set up the transaction model, most of our head-office executives did not even have a computer on their desktops. Now they all have one because the information they get from Seagate Holos is so useful. They are able to drill down through the data and extract exactly what they want," commented Steve Oerton, Coventry Building Society`s data administration manager.
"This model provides a good illustration of the importance of Seagate Holos on-line analytical processing (OLAP) architecture in providing us with a flexible solution. There was no point in developing anything that reported on transactions unless different users could look at the information in the way that best suited them. With Seagate Holos, we have been able to create one structure that everybody can use to do their job."
The Seagate Holos models are also used for predictive purposes. The insurance repricing model, for example, provides information on the number and value of insurance accounts in each of 3,000 postal districts, and enables the effect of price changes on the income stream to be forecast. Different scenarios involving different rates can be explored. Another example is provided by the maturities model, which allows the Coventry to predict how much money will go out of the society as products mature, and how much funding will be needed to cover this.
During the implementation process, Seagate Software consultants had been brought in to solve specific problems. Although the Coventry does all its own development work, it has needed specialist advice at times, especially to ensure that new Seagate Holos features are used to the best effect. According to Oerton, Seagate Software provided a high-quality service that resulted in effective transfer of skills.
Seagate Holos provided Coventry Building Society with several specific benefits. First and foremost, there have been substantial time savings resulting from rapid distribution of reports. The mortgage model, for example, produces a daily report on the applications processed the previous day. In the past, the Coventry`s managers had to wait until the information was gathered together from various sources and a report had been prepared by the accounts information department.
The time savings, brought about by Seagate Holos, allow the Coventry to make more effective decisions and to evaluate the success of new products at an earlier stage. They also mean that new products can be brought to market more quickly. One good example is the use of the insurance repricing model to work out new, more competitive rates for the society`s products, and to load them into the administrative systems. According to Oerton, the Seagate Holos model reduced the duration of the repricing process from four weeks to half a day. As a result, not only was the product launched more speedily, but there was more time available to tailor it to customers` needs and to negotiate with the insurance supplier.
The performance gains provided by Seagate Holos`s new Compound OLAP architecture have also contributed to the success of the implementation. Oerton claims that it would have been impossible to develop the transaction model without Compound OLAP.
"We have so many financial transactions that we have to split the data up into individual months. Every night we build the current month`s structure, which can take as many as two hours at the end of the month. Thanks to Compound OLAP, we can keep on stacking the current month`s structure onto the previous 11 months, giving us 12 months` worth of data. If we tried to build 12 months` data all at once, it would take us more than 24 hours," he said.
Coventry Building Society is continuing to develop new Seagate Holos applications. The next one to be implemented is a distributed budgeting system, which will ultimately become a comprehensive balance-sheet projection tool. Web-based access to the new application may be implemented so that individual branches can compare their actual revenues with budget figures. Other possible developments include a system that analyses the competitive factors influencing branch success, enabling the best locations for new branches to be identified.
Systems at a Glance
- Server: Sequent Symmetry 5000 SE70.
- Operating system: UNIX, with Windows clients.
- Database: Oracle 7.3.
- Database volume: 10 gigabytes.
- Network: Novell.
The Coventry uses UNIX-based servers at head office to run its administrative and management information systems, including Seagate Holos. The branches have Compaq servers and clients running Windows 3.11 and Windows 95. Programs written in-house in COBOL and PL/SQL are used to transfer data from the administrative systems to the data warehouse accessed by Seagate Holos. Several Seagate Holos applications (or models) have been developed, including the mortgage, investment, insurance repricing, transaction and maturities models. In total, these applications have some 60 users, who make extensive use of Seagate Holos drill-down features to perform their own analyses.
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