The market forces unleashed over the past two decades have swept away an old order and its rules, replacing it with a far more competitive and dynamic environment. Banks have been forced to redefine the ways they operate and, even more importantly, the ways they view themselves.

The effects of this process are reflected in the business analysis systems that banks use to guide their decisions. The combination of intensified competition, improved technology, and increasing regulation has forced banks to install systems of increasing breadth and sophistication. In many banks the proliferation of these systems spawned the condition I have labeled data chaos, a state of contentious uncertainty created when independent business analysis systems, drawing data from separate sources, produce discrepant results.

A few banks have resolved this state of numerical anarchy by installing comprehensive decisionsupport data bases that extract, reconc'fie, and integrate data from all appropriate sources prior to use. Some analysts refer to this process as creating an "information warehouse." I prefer to call it "a single financial reality."

In the real world, of course, every solution carries with it the seeds of future change. And banking business analysis systems are no exception. Once these data bases are installed and an integrated financial reality is established, the institution faces new challenges in applying them effectively.

First, given that it now has reliable, enterprise-wide financial and operational data available to guide decisions, how will the bank make the best use of its new information? This issue may not appear serious at first glance, but it is actually profound in its consequences.

The bank now has the ability to measure the true costs and profits of every operation, at almost every level. With proper cost allocations, it can determine the profitability of every product and every customer relationship. It can accurately estimate the returns on capital and assets deployed for each business unit. With each of these steps, it can more accurately gauge the contribution of managers down to the branch and even the platform level.

It should be obvious that information systems with these capabilities will change, even revolutionize, the ways that the bank does business with its customers, altering products, pricing structures, customer relationships, and marketing strategies.

Even more importantly, these systems will alter the ways the bank conducts its internal business. The relationships between tactical managers and their supervising executives will change. Tactical managers will become more directly accountable for results they can control. Inevitably, they will demand more authority to match the increased accountability. Budgeting and planning will become highly distributed processes, as advances in technology allow corporate units to exchange information with operating groups quickly, economically, and in great detail.

Decisions will be made more frequently as well as more speedily. The bank will now have the capability and the motivation to change pricing, product offerings, and risk management positions rapidly in response to market changes and competitive developments. Organizational charts and position descriptions will be redrawn to eliminate bottlenecks in decisionmaking and product delivery.

Changing org charts and position descriptions are symbols of the most critical impact that the new decision-support systems will have.

The roles of significant numbers of bank employees are going to change in very significant ways. Nowhere will the changes become more visible more quickly than in the business analysts units that are the primary users of decision'support systems within the bank. Almost every large bank maintains several of these units within its corporate staff. They are composed of intelligent, well-educated, and expensive professional employees charged with safeguarding the financial position of the bank. They are usually the employees that senior executives call upon for information to guide strategic decisions. They generally work long hours and produce elaborate spreadsheet reports backed up by reams of computer printouts; and they often develop the ulcers that the senior executives have delegated to them along with other tasks. One of the dirty little secrets of modern banking is that at most banks, business analysts spend only a small proportion of their time performing actual business analysis. Much of their effort is devoted to finding, deriving, estimating, reconciling, or negotiating numbers extracted from their multiple and incongruent information systems. Given the prevalence of data chaos in modern banks, business analysts have really been concentrating on quality control rather than business analysis. They expend the bulk of their efforts establishing what the numbers are, leaving little time for determining what these numbers rocall.

In addition to this burden, business analysts must also devote significant time and effort to chronic internal warfare with their counterparts in the systems division. Existing systems often cannot provide the data they require, so the analysts must demand frequent special reports or enhancements from their systems developers. Systems managers retaliate with complaints about schedule and budget overrans created by the unending stream of modifications to system requirements. Occasionally these natural enemies may negotiate an uneasy peace. But hostilities will generally resume with the next request from the president's office, invariably demanding new data that current systems cannot readily produce.

The irony here is that the new decision-support systems, with their comprehensive and fullyoreconc'fied databases, will eliminate much of the work that business analysts have actually been performing. Freed from the burden of numerical quality control, these employees will have to reconstruct both their responsibilities and their work schedules.

Please note that I use the term reconstruct in preference to reengiricer. To me, reengineering suggests an emphasis on the design of a work process, while reconstruction suggests an emphasis on the actual implementation of the redesigned work process. The design of a work process is undoubtedly important, but our greatest concern should be about the actual impact of a reengineered process once it is put into practice.

Reengineering has also become a trendy euphemism for layoff, as if the main purpose for improving information systems is to put employees out of work. It isn't. The real purpose of better information systems is to increase shareholder value by increasing productivity and profits. We have in recent years heard a great deal of discussion about proper uses and levels of return on financial capital. But we have heard substantially less about the proper deployment of human capital.

Better information systems enable banks to deploy their human capital more productively and profitably. When a bank transfers valuable human capital to the unemployment roll, its long-term remm is generally poor. That is why some banks have instituted re-skilling programs to develop and redeploy their most valuable assets, loyal and talented employees.

The business analysts described above may serve as a good example of this point. To the extent that these highly paid professionals have been primarily engaged in numerical quality control, they have been grossly underemployed. They have represented an inefficient use of capital, both financial and human.

Today 's powerful new decisionsupport systems can give banks the power to make better use of this human capital. With their newfound time and their powerful new analytic systems, business analysts can now make far more valuable contributions to a bank' s profitability.

How so? Well, for starters, we can set them an ambitious goal. We can charge them with the mission of determining the hue profit contribution of every organization, product, and customer relationship in the bank; and we can require them to provide both executives and operational managers with the financial information they need to measure and increase the productivity of their staffs.

If our reconstructed business analysis staffs can accomplish these tasks, then their ultimate contribution will be very great indeed. They will be insuring that the bank is getting maximum leverage from all its capital, whether human, financial, or technological.

Mr. Dorman is president and CEO of Santa Monica-based Treasury Services Corp., a consulting firm specializing in information technology and profitabily improvement systems.

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