NEWS : EXTERNAL
SW Tool Lets Bank Test What-If Scenarios
By Maura Ammenheuser , BankTech
BOSTON Sep 24, 2001-Whenever
executives at Boston's Eastern Bank find themselves fretting over
closing a branch, adding a dozen ATMs or introducing a new service,
they can perform a real-time reality check. The $3.6 billion institution
expects to begin using Virtual Strategy Version 2.0 software enterprise-wide
in early September, making it the first U.S. bank to commit to the
product. The technology-developed by Virtual Strategy, Inc., a Boston
software company allows managers to test what-if scenarios against
a slew of data to predict the effect of nearly any business decision.
The heart of the system-microCube-provides
the engine for managing organizational data, structured and unstructured
data, and initiatives as well as performing scenario analysis. It
rapidly builds a model of the business so that alternative scenarios
can be modeled, root causes can be identified, and future potential
impacts can be assessed.
The system uses the microCube
engine to search through numerous databases and extract relevant,
real-time information needed to answer a query, such as the impact
on profit margins if the bank didn't offer product Y in market X.
microCube converts a business question to a compact set of data
to generate a reply. "We can do it relatively easily and with
light training," said Lloyd Hamm Jr., executive vice president
and chief information officer at Eastern Bank.
Eastern executives were impressed
with how quickly Virtual Strategy could be installed, (Virtual Strategy,
Inc. set it up in a month), the ease of putting other data feeds
into the system and integration with the bank's other systems, Hamm
With a single decision informed
by the system, banks can save the cost of the software, said David Bowman
, Virtual Strategy's Founder and CEO. "We're the only
product we know of that's not encumbered by a multi-dimensional
Banks can "play out business
decisions before they have to commit the resources to it,"
noted David Bowman, Virtual Strategy's founder and chief technology
officer. While other software products answer only questions they're
programmed to handle, he said, Virtual Strategy Version 2.0 is dynamic,
handling any question put to it.
To use the product, which
runs on Intel-powered PCs, Eastern Bank's managers open Internet
Explorer, then log in and use a portal customized for accounting
executives, for example, or customer service reps. Employees are
given various levels of access to sensitive information, Hamm said.
Drag-and-drop items and menus aid in answering questions.
"We expect about 25 people
inside the company [will] use it, Hamm said. And with the new software,
managers won't need IT staff to write customized programs to generate
a report or play out a scenario.
The bank wanted to give employees,
even those who aren't tech experts, quick, easy access to information
necessary for solid business decisions, Hamm said. "Behaviors
change when people have information."
Although Eastern hasn't made
or changed any business plans due to Virtual Strategy, "we've
been intrigued by what we may find," Hamm said.