Reporting, Management Control, and Profitability Analysis Transformation at Avaloq

Avaloq is the Swiss market leader in back-office IT solutions for the private banking and wealth management sector. The business also offers ITO services to insurance companies and other financial institutions. Combined, Avaloq's clients have over 7,500 employees worldwide, using its systems and services 24 hours a day, 7 days a week.

The company's figures document an impressive daily workload: 3,000,000 technical transactions (the equivalent of 1,000,000 business transactions) managed through 350 Unix servers, 900 Intel servers, 2,500 MIPS mainframe, four AS/400 servers, more than 100 Terabytes of storage, two international wide area networks, 50 local area networks, three metropolitan area networks, 1,200 network components, 30 DMZ, five neutral zones, 12,000 network access ports, 35 firewalls, 120 routers, and 350 switches.

The Challenge: Overcoming the limitations of Excel

Having become reliant on spreadsheets for financial analysis and reporting, Avaloq realized that this approach was unsustainable as the business continued to grow. Luca Mainini, Head of Finance at Avaloq, explains why the company began the search for a more comprehensive solution:

"Excel could no longer guarantee our ability to report on and analyze the data obtained from SAP, so we felt the need for a tool that would allow us to interact quickly with all of our data in an intelligent manner, and administer the growing volume of information generated by our business".

The company began to explore the available solutions on the market and came across the Board decision-making platform, which helps plan smarter, in a flexible, self-service interface. Marco Lusa, Senior Manager, continues:

"At the selection stage, the principal alternative considered was SAP BW, but the implementation costs and a certain rigidity detected at the prototyping stage suggested that we should go for a more flexible solution. A tool that did not require heavy investment or long lead-times before producing the operational information we needed: this is why we chose Board."

The Project: Reporting, management control, and profitability analysis

The customizable nature of the Board platform enabled Avaloq to develop several tailored applications to suit the needs of different business areas. Luca explains the different stages of the Board project:

"Starting with a data structure inherited from SAP and managed in a DWH SQL, Board is used to generate a multidimensional view of profitability considering three principal dimensions: customer, service, and organization (BU). In addition, Board has allowed us to add levels of detail not managed by SAP and to reallocate costs and revenues from profit centers to projects, or divisions to departments, using a series of predefined drivers. 

A second project involves the invoicing of back-office services. Commencing from a transaction-based system, we use Board to monitor and measure a series of quantities, such as the number of calls, the number of payments handled, and the number of pages printed, that enable us to price the services provided and invoice the customer accordingly."

The range of solutions developed using the Board platform also includes an application that allows Avaloq to automatically consolidate the operating results of all group companies.

"The breadth of the information managed using these applications lays solid foundations for our reporting processes which, thanks to Board, benefit from a modern, easy to use, and highly interactive interface," says Luca.

The Benefits: Simulations, ease of use, and ongoing enhancements

Andrea Bionda, Senior Solutions Architect, outlines the benefits of using Board for analysis and reporting:

"From an IT standpoint this choice assured us of many important advantages: in fact, the adoption of Board has enabled us to overcome the limitations of Excel in terms of volume, security, the centralization of data, and the ability to simulate and report. At the same time, we found the tool easy to install and configure, allowing the multidimensional database to be managed in a totally intuitive manner."

Board has also enabled Avaloq to go further than just examining historical data, as Marco continues: 

"In my view, the value added by Board is our new ability to run simulations: we have moved from viewing data as-is to a more advanced scenario, where we can analyze the impact of likely future events. For example, in our next implementation of the budgeting process, we want to take a dynamic rather than static approach to the available data. Simply by changing certain parameters, we should be able to make projections and forecasts to year end that build on the partial data available for the period. Clearly, to achieve this, we will need an in-depth knowledge of the tool in order to benefit in full from the opportunities it makes available."

Keeping up with ongoing development to the Board platform, Avaloq has upgraded as and when new versions are released, bringing further benefits to the company:

"In terms of our daily work, the upgrade to new versions of Board has brought enormous benefits. Administration is now much easier at the installation and configuration stage and, more importantly, when it comes to the various data management activities required: from backups to the construction and maintenance of databases, each operation has become easier and more effective," says Andrea.

Luca concludes by summarizing what he sees to be the biggest advantage of Board: 

"From my standpoint, as an advanced end user, the greatest advantage offered by Board is undoubtedly its practicality. The front-end has an innovative graphical interface that combines ease of use with a powerful ability to display, analyze, and interact with data."