Infosys’ blog on industry solutions, trends, business process transformation and global implementation in Oracle.

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November 22, 2013

Riding on risk analytics to create competitive advantage

Guest post by
S L K Prasad Thanikella, Senior Associate Consultant, Business Intelligence - Financial Services Industries, Infosys Limited

Do the following questions ring any bells in your mind?
• What is the expected loss of my portfolio?
• If we lend an additional $100M to a significant obligor, what should be the loan's price?
• If the economy reverts, what will be the impact on the portfolio's loss?

These are typical questions that Financial Risk managers ask themselves frequently. One of the ways the risk function can add value to a Financial Services organization is by quantifying the amount of exposure. It supports Business Units in objectively analyzing, taking informed decisions, minimizing risk and enabling overall profitability over the long term. It is beyond any doubt that top banks consider Financial Risk Management as a key driver of long term profitable growth and sustainability.

Analytical Maturity continuum categorizes global financial services organizations into five categories based on their capabilities to perform analytics in-house:
• Analytically impaired with limited interest in senior management in analytics
• Localized analytics with analytics in silos
• Analytical aspirations with a commitment by senior management to build analytics capability
• Analytical company enterprise analytics as corporate priority
• Analytical competitor, the nirvana stage with ROI on analytics already showing up


For institutes that compete on analytics, it is desirable that they position themselves as analytical companies or analytical competitors. Analytical companies have systems that facilitate features like dash boarding capabilities, drilldown, roll-up, forecasting, hierarchical analysis, guided navigation and Ad hoc analysis.
Before embarking upon the journey to implement a Risk Analytics solution, it is important to understand typical project implementation challenges. Successful execution calls for a three-pronged strategy:
• Expertise in best-in-class principles of financial risk function and regulatory guidelines to perform a fit-gap analysis and propose a holistic solution
• Superior execution capabilities in implementing analytics solutions to organizations of comparable size
• Deep knowledge in technology that is leveraged to build a system that has features like scalability, robustness besides user engagement

Oracle offers a solution through an integrated suite of applications called Oracle Financial Services Analytical Applications (OFSAA). The OFSAA suite has several analytics modules like Retail Credit Risk Analytics (RCRA), BASEL II Analytics which create business value by converting raw data into actionable intelligence. OFSAA helps organizations build analytical capabilities on the foundation of Universal Data Model and a comprehensive Staging Layer. It Integrates forecasting, provides ways to alternative data sourcing, helps in optimization of data to be analyzed. It brings to the table, a robust framework that is built based on best-in-class principles of financial risk and performance management which leverage the strong Oracle technology base. It offers an excellent platform for Banking and Financial Services Organizations to build an integrated Risk, Finance, Treasury and Customer Repository of data. It reduces time to respond to regulatory authorities with pre-built standard reports which refresh automatically periodically.

OFSAA Analytics is a closed loop solution that enables timely compliance reporting, data-driven decision making, and user engagement - thus helping organizations achieve competitive advantage.


 

November 11, 2013

Oracle Projects and Labor costing

Guest post by Somnath Pansare, Principal Consultant, Infosys Limited

Compared to Oracle E-Business suite financial family of Oracle applications, Oracle projects family modules are not that extensively used. Recently many customers realized the potential of Oracle Projects suit and started using for their business. Now, lot of unused functionality is being explored and additional requirement or tuning of functionality is coming from these areas, labor costing is one of the areas.

Many industries, especially service industries, such as hospitality, manufacturing, and computer services use extensive amounts of manual labor. So the employee labor costs are usually the major expense for businesses in these sectors. Loading correct cost to the project is very critical though it may not be straight forward since there are many factors involved in addition to the global and complex nature of the projects.
Straight time cost, row cost is calculated by Oracle project by multiplying working hours of employee by the employee's labor cost rate.

Burdon cost can be calculated from the row cost as per the business needs. Costing rate schedules can be defined at employee or job level but that is not enough for many organizations where they would be looking to setup rate using more employee attributes like job, job level, position, location, any other attributes or combinations of any attributes.

I would like to discuss this vital business need and recommend an approach for defining and maintaining employee cost rate schedules using HRMS employee attributes, and modifying client extension to use the new rate schedules for labor cost calculations while loading cost to projects. This would make sure the correct employee cost is added to the projects.

Proposed Solution
Following diagram would depict the proposed solution. Oracle Release 12.2 also tried to address some of the requirement through HR Rate by Criteria matrices but the solution proposed here is secure, independent and easy to access and maintain.

 

Blog_Somnath.jpg


I am sure this solution would be a very good value add to customers and easy to implement. I would like to hear your thoughts on the same and any comment you might have.

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