Financial Services: Leverage Existing Data and Minimize Risks
Financial services organizations, such as insurance firms, banks, and investment companies, face increased scrutiny and accountability as they work to comply with state, national, and international regulations. The complexity of investment vehicles contributes to large volumes of business data that is often isolated in disconnected silos across the enterprise.
Within such an environment, financial services firms need to better assess and manage risks to enable accurate asset valuation, prevent data loss and fraud, increase transparency, ensure compliance, and effectively compete in the market. Only by having the proper analytical tools — and the right data at a user’s fingertips — can the
se firms mitigate risk and win their customers’ confidence.
Effective risk management requires a foundation of trusted enterprise data. To this end, leading firms are adopting advanced risk management and data integration solutions from SAP, including SAP Credit Risk Portfolio Management and SAP BusinessObjects governance, risk, and compliance (GRC) solutions, to manage market, credit, and operational risks across disparate silos of enterprise data and applications.
Such solutions deliver functionality to aggregate, cleanse, manage, and visualize data as business needs change. Financial services firms can rapidly verify and integrate data, increase organizational transparency, and improve the understanding of risk across the enterprise. The right analytical software solutions can help organizations manage market risks by increasing visibility into potential marketplace issues; control credit risks by centralizing processes for credit risk governance; minimize operational risks with a unified, flexible approach to risk management and regulatory compliance; and enable access control and process control by automatically identifying and
managing access violations.
With accurate, up-to-date information, these companies can weigh and manage risk factors to find new ways to cut costs and be more agile in recognizing and capitalizing on opportunities to gain a competitive edge.
...And Be Able to Access It
Competitive success also requires flexibility and rapid response along the value chain, which means that organizations must provide self-service access to vital data. Incompatible information locked in disparate silos and line-of-business transactional systems can hinder an employee’s ability to quickly make sound decisions. To manage risk properly, organizations need to consolidate and integrate data to create a single version of the truth.
Insurers Gain 360-Degree Insight
Let’s see how insurance companies are handling this need to integrate disparate data so they can manage risk. Many insurers may feel inundated with data — especially insurers that perform underwriting and claims processes, regularly generating terabytes of data. The data is often segmented within geographically diverse organizations, making rapid analysis and informed decision-making a challenge.
An insurer’s ability to promptly pay a legitimate claim is a key factor of customer satisfaction, but because the data needed to support a claim is often siloed, gaining a 360-degree customer view can be cumbersome. This barrier burdens the insurer’s field management team and adjusters who must manually pull data from disparate spreadsheets and policy and claim systems. Such tedious manual work is error-prone, takes up valuable time, and delays claims decisions. In addition, the siloed data cannot be effectively aggregated and analyzed to identify broader hidden issues and trends — such as medical fraud or litigation success rates — so the business won’t be able to use analytics to reduce claims and costs and improve overall performance.
With advanced risk management and data integration software, such as SAP Claims Management, a claims manager can easily analyze aggregated claims data at the adjuster, office, and regional levels. He or she can quickly identify key business insights, such as medical provider costs that don’t align with industry norms. And because these solutions have a natural-language search capability that finds and contextually arranges data pulled from legacy systems, a typical business user — rather than a small group of analytical or IT experts — can easily identify and visualize long-term trends, such as why auto liability claims are on the rise.
Financial Services Firms Rise to the Top
As financial services companies encounter myriad challenges in today’s dynamic marketplace, they need to minimize risk while maximizing access to existing data. Using advanced risk management and data integration solutions from SAP, these customers can:
- Analyze and distribute key information to predict, prevent, and manage risk using trusted, integrated data
- Reduce the costs and challenges of compliance by aligning risk-based processes with strategies and monitoring controls
- Increase competitive advantage by aggregating, understanding, and mitigating risk factors
- Improve efficiency with fast, enterprise-wide access to critical information
For more information, visit www.sap.com/industries/insurance and www.sap.com/industries/banking.
Wilhelm Wälti (firstname.lastname@example.org), who is based out of SAP Switzerland, is Vice President and Head of Financial Services Industry Business Solutions for EMEA and India. He originally joined the company in 2002 and spent six years as Field Services Director for SAP Switzerland. During that time, he played a pivotal role in the integration of the SAP Research & Development Center and its extended customer alliances.
Utilities: How the SAP for Utilities Solution Platform Helps Combine Technical Innovation with Sustainable Growth
Climate change has prompted the need to reduce greenhouse gas emissions through quick implementation of more efficient energy generation, distribution, and consumption technologies. To respond to this need, the utilities industry will have to undergo a global shift: The increasing importance of renewable energy sources will decentralize power production processes; intelligent grids will revolutionize the efficiency of the energy distribution sector; and Smart Meters will allow energy retailers to offer energy products tailored to their customers.1
Smart Meters Lead the Way to Greater Energy Efficiency
A utility company’s first step into this brave new world involves exchanging traditional meters with intelligent Smart Meters that can measure the consumption profile of each customer in very short intervals — typically 15 minutes. Based on these consumption patterns and a consumer’s preferences, a utility company can provide unique, made-to-order energy offerings, such as a critical peak rebate tariff that grants a discount if the consumer reduces its consumption during expected load peaks.
An advanced metering infrastructure (AMI) — which connects Smart Meters across the grid to AMI head-end systems — enables a utility company to offer attractive price conditions because it can now share the energy procurement risk with the consumer. For example, dynamic pricing rates enable the utility company to charge for each 15-minute interval that is above a low-priced consumption baseline at the actual market price.
Because Smart Meters operate bi-directionally, a utility company can send messages via the Smart Meter to customers to inform them of upcoming critical peaks or other issues. A utility call center can use this communication structure to initiate customer service processes, such as on-demand meter readings or meter disconnections/reconnections, almost in real time. And, in the near future, an energy service provider will be able to directly interact with its customers’ home automation network (HAN) via, for example, a Smart Meter to optimize the operation of devices such as air conditioners.2 This way of using a Smart Meter to interact with a HAN would transform the traditional delivery of a commodity to a tailored service product: the utility company could guarantee that a room’s temperature would never exceed 65 degrees Fahrenheit, for example.
“AMI is part of a trend that will change the conventional business model of a utility company and mark a giant step forward for the utilities industry. This is a trend that has only just begun, and by taking the lead, SAP has once again demonstrated its commitment to a high level of innovation.”
— Jeroen Scheer, chairman of the SAP extended ACCU Workgroup for AMI and manager of IT Strategy & Architecture at Nuon Energy (Vattenfall)
SAP and Utilities Collaborate to Address the Shift
The full business integration of Smart Meters affects more than 50% of utilities’ traditional business processes, so energy providers need a future-proof solution platform to turn this technical innovation into a competitive advantage. Here’s where SAP stepped in.
SAP formed the AMI Lighthouse Council with nine participating utility companies to integrate the SAP for Utilities solution portfolio into market-leading AMI systems. The council has been shaping the integration of SAP solutions with AMI solutions for business processes, including for customer relationship management and billing and enterprise asset management. The council’s close collaboration with the Advisory Customer Council Utilities (ACCU) — the consortium for SAP for Utilities executive customers — ensures the global validation of the specified use cases through leading utilities.
The AMI Lighthouse Council initiative also includes several strategic technology partners that offer meter data unification and synchronization (MDUS) solutions. These solutions act as a powerful hub for meter and event data between AMI systems and downstream SAP solutions.
This collaboration resulted in the development of ongoing enhancements to SAP AMI Integration for Utilities, a solution first released with SAP Business Suite 7. Based on the standardized integration of SAP for Utilities with AMI systems, utility companies can now easily extend their offerings through innovative, energy-efficient products and services. To learn more, visit www.sap.com/industries/utilities.
Dr. Stefan Engelhardt (email@example.com) is Vice President and Head of the Industry Business Unit Utilities at SAP AG. Before joining SAP in 1997, Stefan served as Head of Energy Consulting and Customer Service at Technische Werke Ludwigshafen and was an associate professor of geography.
Public Sector: SAP for Public Sector Fosters Best-Run Governments
Governments must meet the rising demands and expectations of their citizens. At the same time, they must reduce spending while providing greater transparency. To meet these challenges, governments need to run better. Let’s consider three ways SAP is fostering best-run governments that improve the prosperity, security, and well-being of their citizens.
1. Manage Funds Efficiently
Governments are under intense fiscal pressure — budgets are reduced, programs are underfunded or at risk, tax compliance is low, and non-tax revenues are not fully collected. Governments are using SAP solutions to manage public funds more efficiently by increasing the efficiency of public administration and ensuring compliance with laws, simplifying tax collection, providing a unified view of constituents’ liabilities and payments, and reducing IT complexity and support costs. For example, a UK-based shared services organization expects to save $1 billion over the next 10 years with SAP solutions.
2. Improve Services
Many public sector customers use SAP solutions to deliver benefits — such as coordinated case management processes and consolidated call centers — to citizens, enabling them to interact more efficiently with government agencies while also lowering costs. When governments offer convenient online taxpayer services to citizens, they achieve both reduced costs and increased compliance and collections by integrating with existing systems and providing a single view of the constituent. For example, tax organizations in Australia and Costa Rica have increased compliance and the revenue base for their governments by improving services. As more governments modernize their back-office systems and their citizen-facing systems, SAP solutions will make an even more dramatic impact on both the public and private sectors.
3. Promote Safety and Sustainability
We at SAP co-innovate with our customers in both content and delivery models to promote safety and sustainability. Building a web-enabled data repository for information and processes improved the handling of emergency situations in Switzerland, and implementing a balanced scorecard improved the effectiveness of policing and enhanced citizen safety in Germany. Plus, public sector entities in Austria and in Australia3 leverage SAP software to ensure interoperability and reduce traffic congestion, making the roads more efficient and helping protect the environment by eliminating the stopping and starting of traffic at toll plazas. All over the world, SAP solutions help organizations ensure safety, protect constituents, prepare for disasters and emergencies, and promote sustainability.
More Enhancements Now and on the Horizon
To further benefit the public sector, we are accelerating the delivery of software-as-a-service (SaaS). Specifically, we have enhanced how we support organizations that deliver and operate SAP software for multiple government agencies. SAP Public Services, Inc. has helped governments around the world improve efficiency and constituent responsiveness, standardize and consolidate processes, reduce IT expenditures, minimize redundant processes, and improve overall public value. We are also now collaborating with several shared services customers to investigate how governments can best benefit from cloud computing.
While we still see opportunities for improvement, we’ve made significant progress. By co-innovating with public sector customers, we aspire to play a greater role in government transformations worldwide. For more details, visit www.sap.com/industries/publicsector/public.
Michael de la Cruz (firstname.lastname@example.org) is Senior Vice President and Head of the Industry Business Unit Public Sector at SAP. Prior to joining SAP in 2004, he held several leadership positions at Siebel Systems, where he led product management teams for the public sector and financial services industries. Michael holds an MBA from Harvard Business School and a bachelor’s degree in history from Yale University.
1 See “SAP for Utilities: Leading the Charge for Long-Term Energy Efficiency” by Klaus Heimann in the July-September 2009 issue of SAPinsider. [back]
2 “Home automation network” refers to a centralized household system that integrates smart controls on domestic appliances and energy consumption to create an intelligent home, prioritizing energy efficiency and overall compatibility with the householder’s lifestyle. [back]
3 See “How a Smarter Traffic Project Reduces Highway Congestion and Improves Driver Safety” by Alan Joch in the April-June 2010 issue of insiderPROFILES. [back]