Price Waterhouse Management Consulting Services and Informix Software Inc. announced an effort to jointly provide data warehousing services to financial institutions and other companies.
Data warehouses, which pool information from disparate computer systems, are becoming increasingly popular at top banks, experts said. Applications for the warehouses include profitability analysis, cross-selling, and risk management.
Demand for the systems is being driven by a desire to more efficiently mine the wealth of customer information carried on banks' computer systems.
By joining forces, Price Waterhouse, which specializes in project management, and Informix, which provides data base management systems, hope to give financial institutions a single point of contact for data warehouse services.
In May, Price Waterhouse will announce a data warehousing initiative targeted specifically at the financial industry.
The Price Waterhouse/Informix initiative also aims to provide services to manufacturing, retail, hospitality, entertainment, media, communications, and government organizations.
Data warehousing is attracting a great deal of interest and investment within the financial community.
According to the Tower Group, a Wellesley, Mass.-based consulting firm, banks spend $450 million a year on data warehouse projects, and the industry's outlay is expected to increase at a rate of 25% to 30% a year.
The Tower Group reports that the majority of the top 100 U.S. banks have in place at least one "activity-specific" warehouse, which is a data storehouse used for one activity, such as profitability analysis.
Banks are also beginning to build huge information libraries - known as "enterprise warehouses"- that feed data to activity warehouses.
Experts said that enterprise warehousing has grown in popularity in part because of banks' increased use of massively parallel computer processing platforms. These systems consist of groups of linked microprocessors that can operate independently to perform tasks and queries from several angles at once.
According to Tower Group, a number of banks are in the process of building activity warehouses - including Bank of Boston Corp., Barclays Bank, First Union Corp., NationsBank Corp., Banc One Corp., and Wachovia Corp.
BankAmerica Corp., which employs enterprise warehousing in several business units, is the most aggressive bank user of this technology, Tower executives said.
By 1997, Tower expects about a dozen banks to have enterprise warehouses deployed.
Michael J. Schroeck, a Price Waterhouse partner responsible for the New York-based firm's national data warehouse initiative, said that business process reengineering is driving the demand for the technology.
"Banks want to provide better access to information because people are performing more analytical and less clerical activities," he said.
Data warehousing gives banks the ability to tie together information from different transaction systems. The information can then be used to perform market segmentation, credit card solicitation, cross-selling, profitability analysis, asset/liability management, risk management, and other tasks.
The parallel processing and distributed computing environments used for data warehousing result in speedier and more accurate processing which lead to better understanding of client relationships.
Mr. Schroeck said the purpose of the Price Waterhouse/Informix alliance is to cut through the confusion that currently exists when a company is faced with building a data warehouse.
The task requires installing numerous layers of hardware and software, each of which may have a different vendor. The confusion involved with evaluating these vendors and their products for reliability and compatibility can slow the pace of a project.
According to Mr. Schroeck, banks "need a systems integrator to stand above the fray, and help put all the pieces together."
The Price Waterhouse/Informix alliance "offers banks a single point of contact, and the comfort level that a solution will work," said Amos Barzilay, director of industry marketing at Informix.
Mr. Schroeck said that Price Waterhouse will provide project management services through "Knowledge Management," a program that addresses all stages of data warehousing, from strategy to implementation.
The company will help develop data warehouses that target high-value payback areas using customer, marketing, sales, and finance information.
For its part, Informix supplies relational data base management systems, which use parallel processing technology.
"The alliance brings the respective strengths of Price Waterhouse and Informix together, creating a powerful combination of expertise and resources to provide comprehensive data warehousing solutions for our clients," said Mr. Schroeck.
This is not the first time the two companies have worked together, said Mr. Barzilay. They teamed up similarly on a workflow engineering project for the Student Loan Marketing Association. In that project Price Waterhouse provided management services, while Informix provided a data repository for the processing of student loans.