Management Information System: to be or not to be?

According to studies, more than 60% of implementation projects for data warehouses and analytical applications are failed. Such disappointing statistics were announced to us by employees of the IBM office in Ireland, where industrial data models, including the banking data warehouse model, are developed and supported. This was completely unexpected for me. Especially when you consider, that the information was announced to a delegation of management board members and top managers of the State Saving Bank of Ukraine, who came to Dublin in 2011 to better know the IBM Banking Data Warehouse (IBM BDW) model, and who were about to make their decision on project start.

I don’t know, how I managed to convince the bank management to start such a complex project and to create an own Enterprise Data Warehouse. In one of the conversations, my former boss, now a member of the management board and financial director of the bank, said: “If I knew, what I was getting into, I would think well again.” But, apparently, in life, there are times, when fate gathers the right people together on the right time and in the right place. And then you ask yourself a simple question: “If not me, then who? And if not now, then when?”

Looking back today, I can identify the ten factors, that made our project successful.

1. Chairman support

So, the statistic on successful projects was  disappointing. From the level of my current experience, I can say, that the number of successful projects is even less in reality. Even if an IT-system is put into operations, this does not mean, that it will be viable and will be maintained in the long-run. Sometimes the production is the best way to close an unsuccessful project.., after reporting on successes to the management board and bank owners.

In such a complex IT projects as the data warehouse implementation and the creation of management information system, in parallel with the automation project, systemic and profound changes are taking place in the bank’s processes and organisation. Too many interests and key managers responsibilities areas are affected. Inevitably, a major restructuring of the entire bank will be taking place. Therefore, one of the main success factors is still the desire of the chairman and, at least, one of his key deputies, to change the bank, to make it more manageable and transparent.

2. CFO is the best sponsor

The financial director is one, who, by the nature of his duties, is responsible for reporting to the national bank, regulators and potential investors, who is obliged to provide reliable and complete financial information. Introducing of international financial reporting standards (IFRS) in CIS countries and Europe, the information disclosure becomes an industry standard, especially, if the bank is looking for external borrowing on international capital markets.

In addition, it is the financial director, who has the budget in hand, which is important for the normal financing of the current project expenses and the retention of a key qualified team members and developers, as well as for capital investments in equipment and software.

The role of business sponsor of such a project can be also done by the operational and IT director. But, as a rule, they are both puzzled by other systemic issues, that are in the area of ​​their direct responsibility, for example, centralization of the back office, automation and optimization of business processes, IT infrastructure. The data warehouse and reporting system play a secondary role for them.

3. Direct subordination of PM to project sponsor

Having a sponsor is a necessary but not sufficient condition for the success. The project should be led by a reliable manager with experience in the banking business, who understands IT technologies, has a knowledge in the modeling and data management. In addition, the project manager must have a clear vision of the management information system and understand  trends in the data warehouse development.

A key success factor is the direct submission of such a project manager to a business sponsor, regular reporting and feedback between them. This significantly increases management efficiency and removes many project risks at the start.

A project manager should not only have good leadership skills, but also be a good psychologist. The ability to listen to people, to understand and to reconcile different points of view are invaluable qualities without which effective relationship management and information management in the project are simply impossible.

The project manager must be able to communicate with people at different levels of an organizational hierarchy, know to whom, how and when to submit the necessary information. And the most important, he must understand, why he is doing this project, what result he wants to get, and what price he is willing to pay for this result.

4. Internal or external project management

One of the key choices for the manager, who initiates the project is the choice between internal and external project management. He needs to decide whether to take responsibility or delegate it to an external company.

At the start of our project in 2011, several data warehouse projects of IBM BDW had already been launched in the Ukrainian banks. However, at that time, IBM IT partners in Ukraine did not have knowledge not only in terms of data modeling for IBM BDW, but also in terms of supporting IBM InfoSphere Information Server software products, which are necessary for the proper implementation of data warehouse. There were no local consultants, who could transfer this knowledge and experience to the development team.

It was obvious to me, that we have to find a reliable and experienced IT-consultant, who could train the implementation team at the development stage and to ensure the necessary project quality. It lead us to a visit of Dublin, which I mentioned at the beginning of this article. It was necessary to understand, which of IBM partners abroad is able to transfer unique knowledge to developers and business analysts in Ukraine.

As a potential project manager of the bank, I was very well aware, that local IT companies will learn, how to model and build data warehouse on our expenses. At the same time, we will not be able to directly control and retain their IT-employees, who will acquire unique knowledge through work with Western consultants.

At the end, it was decided to introduce the internal project management in order to create and maintain the new skills and unique competencies within our organization.

5. Creation of a MIS unit

In fact, the project team was integrated into the functional organization of the financial and economic department, within the organisational structure of the bank. In the early stages of the project, a separate division of Management Information Systems (MIS) was created with completely new functions.

In addition, project roles were put into line organization as much as possible. At the same time, the project roles essentially prevailed over established line responsibilities. In my PM role, I consciously destroyed the hierarchical structure of subordination and built up a flat horizontal communication between team members and me.

The main prerequisite was 100% or full-time involvement in to the project. MIS unit was after project the owner of the implemented data warehouse  and information system. This resolved the possible conflict of interests in the project team. People understood, that even after the end of the project they will have a permanent job and career growth.

6. Involving source owners on out-staffing

Five teams had been created within the MIS division, each of which solved its own tasks: business analysis and modeling; ETL development and metadata management; BI reports development; development of web applications for data warehouse; data analysis and uploading data from source systems.

The last team was formed from employees of the company developed the main bank data sources. We had out-staffed a team of data analysts and developers from our source systems providers on full-time base. This accelerated communication, simplified the process of data uploads, and significantly accelerated the mapping of data source to targeted data warehouse entities.

The first release was implemented in record time for nine months using the Waterfall PM method, within a very modest budget. During subsequent releases, the team switch to Agile project management approach.

7. Team motivation and project mission

The most important factor was the willingness of implementation team to learn, work with new software products, and master the complex IBM BDW model. As a project manager, it was absolutely clear to me, that people should be motivated not only by money, but rather by the prospect of gaining new knowledge and mastering new innovative technologies.

Probably, the project success was largely done due to the fact, that I managed to connect the motives of the bank’s top management, the personal motives of the team members and my own personal motives as a consultant. I managed to show the implementation team the sense of their work: the transparency and the manageability of the systemic bank in Ukraine. In addition, a transparent reporting was the main requirement of external institutional investors, who wanted to enter the bank’s capital. This may change for the better the investment climate in my country and the influence prosperity of people in Ukraine.

By the time the data warehouse was put into operations, the MIS team felt an incredible rise. This happened on December 24, 2012 on the eve of the Catholic Christmas. The date was symbolic. Nine months passed, and our brainchild was born. We did it, we really did it. But as history has shown, this was only the beginning of a new stage in our lives.

8. Desire to continue changes

The data warehouse clearly showed problems with data in the source systems: incorrect dictionaries, history storage, etc. Data problems reflected bank problems not only in the architecture of data sources, but also in the processes and management functions. This directly affected the interests and responsibilities of many middle and senior managers. At that moment completely different factors and motives came up into game.

At this stage of the project, top management has to answer the main question:
— do we really need the transparent reporting;
— do we want to create transparent motivation system;
— do we want to change the rules of the game?

At this point, the future of the information system is being decided. One Russian well-know proverb is stated, a situation often lead to “punishing the innocent and rewarding the involved.”

At this stage, the will of the chairman and desire of sponsor to continue the changes are needed. At this stage, there is a need to implement data governance policies and procedures, to consolidate new roles and responsibilities for data management, that the bank did not previously have.

These processes and roles of Data Owners,  Data Stewards, Business Experts, Data Quality Managers have for a long time become the standard in Western banks. Our banks have to implement them in their practice and processes yet.

9. Grateful users

We underestimated the importance of involving end-business users at the early stages of a project. Their participation in the definition of terms, the development of business requirements, dictionaries, calculation algorithms is the most important factor in the success of the project.

Early involvement of user in the project helps them more easily accept responsibility for the developed reports, become data owners and get involved in data management processes at testing and production stages. Grateful users are the key to the further development of the data warehouse and information system.

10. Chief Data Officer

In my current project in Vienna at Erste Group Bank AG, which also implements data warehouse based on IBM BDW, I was struck by the fact that the entire bank (from board members to ordinary employees) speaks a modeling language, the language of attributes and data model terms.

The main goal of Erste for the coming years is not associated with improving service and customer loyalty, but with data excellence. Bonuses and key indicators (KPI) of the bank’s top management are directly linked to the data quality.

Data problems often requires escalation to the level of the corresponding Operational Decision Committee or Board. A completely new top management role is emerging, the Chief Data Officer. In Europe, such a top manager is a member of the bank’s management board, and this approach has already been becoming an industry standard.

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