SIRE Exercises

Shanghai - June, 2013

Prof. Gianmario Motta

Daniele Sacco, Ph.D. student

- 2 -

SuperBank Case Study

Super Bank, led by Jean Dupond, Chief Executive Officer (CEO), is a universal bank (Retail and Corporate) with operations divisions across UE.

The Retail Division serves retail and small business customers. It operates in France, Germany, Switzerland and Italy. The Retail Division offers a full range of banking products for consumers (checking accounts, mortgages, loans, personal credits etc.). Alike other large banks, Retail Division includes captive corporations for consumer credit (consumer loans) and life insurance.

The geographical structure of Retail Division is on several levels: country, area, market, and branch. The branch is the atomic unit, and it includes front office, that interacts with the customer, and some back-office activities, that include processing checks, accounting and related processes. However, for the sake of efficiency, back-office activities of branches have been centralized in regional hubs (one in Lombardy, one in Tuscany, etc.).

The branch front office must effectively manage customers in their entire life cycle. Therefore, each customer is assigned to an individual branch clerk. The clerk is in charge of all customer transactions; only larger branches have a manager, who is in charge of loans (although not exclusively).

The size of the branches ranges from 2-3 to 6-9 employees. Most have 5 employees. Each branch is headed by a branch manager. Groups of 8-12 branches are coordinated by a Market Leader. who reports to the Area Manager, who runs a geographical area (e.g. Tuscany).

- 3 -

SuperBank Case Study

Large banks compete on services offered to the customers. Since the service price (i.e. the interest rate) is essentially market-driven and therefore does not substantially change across banks, customers are sensitive to service levels and switch banks accordingly.

With interests rates set by the market, the costs are the main issue. The first cost is personnel and technology is the second one. To improve financial performances banks should increase staff productivity by optimizing tasks, skills, technology while developing also the quality to customers. For a large bank it is also mandatory to provide services throughout Europe, evolving to a pan European vision.

The customer / market structure, by unifying processes across Europe, allows economies of scale of ICT costs. As matter of fact, a traditional geographical structure leads to islands of automation, with segregated systems for each country (e.g. France, Italy etc.). Conversely, customer / market organization requires common systems for each service class – checking accounts, loans and so on.

This economy of scale can eventually generate resources for service innovation. A strong evolution factor is the fast growth of the digital culture of customers.

- 4 -

Information Catalogue

Master Event Analysis

Stakeholders

Law

Competitor

Customer

Supplier

Broker

Shareholder

Resources

Personnel

Plants

Raw materials

Cash

Context

Structure

Project

Region

Output

Process

Product

Service

- 5 -

SIRE Grid- Personalization phaseMaster Event Analysis

Identification DescriptionRegistratio

nCertification Efficiency Effectiveness

Stakeholders

Law

Competitor

Customer

Business

Retail

Resources

Personnel

LoanAgent

Clerk

Cash

Context

Structure

LoanDepart.

Branch

Output

Process

Product

In this phase we can specialize domains and

decompose levels, to further adapt the table

for our purposes.

- 6 -

SIRE Grid- Refining phase

Master Event Analysis

Identification Description RegistrationCertificatio

nEfficiency

Effectiveness

Stakeholders

LawMortgage loans regulation

Basilea 2 Certification Out of scope

Competitor• Company

data• Business

• Balance Sheet

• mortgage loan

services• Geographic

distribution

Out of scope• Capture rate

• Revenue

• Process duration

• Flexibility• Customer

satisfaction

Customer

Business

• Personal data (name,

surname, ssn, etc)

• Bank account• Credit

limit

• Mortgage request• loan request

• Customer satisfaction• Loyalty• Revenue

Retail

For each class of information, one or more SIRE are requested, with the purpose of

modeling according to our needs.

- 7 -

SIRE Grid- Refining phase

Master Event Analysis

Identification DescriptionRegistratio

nCertification Efficiency

Effectiveness

Resources

Personnel

Agent-Manager • Personal data

(name, surname, ssn,

etc)

• Tasks• Skills

• Seniority level

• Career

• Schedule

• Mortgage certification• Loan

certification

Absenteeism• Effort

• Flexibility

• Schedule

• Mortgage request.• Loan request

Absenteeism Effort

Clerk

Cash Movables capital register Money transfer (payment) • Cash flow index

Context

Structure

Loan Depart.

• Head of department• Number of loan agent

• Location

• Mortgage certification• loan certification

• Revenue

Branch

• Head of branch• Number of employee

• Location• Department

• Money transfer (payment)• Mortgage request.• Loan request

• Cash flow index• Capture rate

• Volume of customer

Output

Process• Structure (activities)

• Flow

• Schedule• Collateral

• Process status information• Time to certification

ServiceID

TypeFeatures

Money transfer (payment)Mortgage request

Loan requestCapture rate

- 8 -

SIRE Card –

SIRE CARD

Importance ★ ☆☆☆☆

Description

MASTER DATAIdentification Name Description

Description Name Description

TRANSACTION DATA

Registration Name Description

Certification Name Description

ANALYSIS DATA

Efficiency Name Description

Effectiveness Name Description

This is a SIRE CARD. Into this kind of card is possible to find all the information about a row of a SIRE Grid

- 9 -

SIRE Card – STAKEHOLDERS- LAW

SIRE CARD – Stakeholder Law

Importance ★★★★★

This card shows the strategic characteristics of the law in the banking sector

MASTER DATA

Mortgage loan regulation

Describe the national ed international law concerning mortgage loan

Basilea 2

Recommendations on banking laws and regulations published in June 2004, was intended to create an international standard for banking regulators

TRANSACTION DATA

CertificationCertification about european

conformity standards

ANALYSIS DATA Out of scope

- 10 -

SIRE Card – STAKEHOLDERS- Competitor-1

SIRE CARD – Competitor – Only loans and Universal bank

Importance ★★★★★

This card shows the strategic data regarding to competitors into banking sector

MASTER DATA

Identification

Company Data Company identification data

BusinessThe market in which the competitor works.

Geographical distribution

Description of how the competitor is distributed on the territory

ImportanceActual and perceived importance of the competitors

CompetitivenessCompetitiveness of the competitors in the mortgage loan market

Competitive approachWhich kind of strategy is used by the competitor into the market.

DescriptionBalance sheet

Data about the economic value of competitors.

Volume of mortgage loan

Estimated volume of mortgage loan released by the competitor

TRANSACTION DATA

Out of scope

- 11 -

SIRE Card – STAKEHOLDERS- Competitor-1

SIRE CARD – Competitor – Only loans and Universal bank

ANALYSIS DATA

Efficiency

CapturationIt indicates capacity of the competitor to capture new customers

RevenueEstimated revenue created by the competitor from the releasing of mortgage loans

Effectiveness

Process durationDetails about the total duration of the mortgage loan process

FlexibilityHow flexible is the bank respect to the customer’s needs

Customer satisfaction How the customer is satisfied

- 12 -

SIRE Card – STAKEHOLDERS- Customer Private

SIRE CARD – Customer Current

Importance ★ ★★★★

This card shows the strategic data regarding current customer into banking sector

MASTER DATA

Identification

Personal data Customer identification data

HouseholdThe total amount of people who live in the same dwelling.

Credit limit

A credit limit is the maximum amount of credit that a financial institution or other lender will extend to a debtor for a particular line of credit

Description

Relationship with the bank

A collection of data regarding the pregress

RankingThis description of the relationship between bank and customer

TRANSACTION DATA

Mortgage loan request A request of mortgage loan

ANALYSIS DATA Effectiveness Customer satisfaction How the customer is satisfied

- 13 -

SIRE Card – RESORCES- Personnel Loan Agent - 1

SIRE CARD – Personnel – Loan agentImportance ★★★★★

This card shows the strategic data regarding loan agent

MASTER DATA

IdentificationPersonal data Loan agent personal data

Seniority Level of seniority of loan agent

DescriptionTask Tasks made by the loan agent

Skills Skills held by the loan agent

TRANSACTION DATA

Registration

Career Career made by the loan agent

Education Data about education of loan agent

Mortgage LoanData about mortgages practices followed by the agent

Schedule List of appointments

Certification CertificationProfessional certification held by loan agent

- 14 -

SIRE Card – RESORCES- Personnel Loan Agent -2

SIRE CARD – Personnel – Loan agent

ANALYSIS DATA

Efficiency Absenteeism Absenteeism trend

Effectiveness

Bad debt Shows the talent of the loan agent

EffortHow high is the loan agent commitment

FlexibilityHow flexible is the agent respect to the customer’s needs

- 15 -

SIRE Card – RESORCES- Personnel Clerk

SIRE CARD

COS’è

COSA FA

TYPE OF DATA

MASTER DATA Identification

Description

TRANSACTION DATA

Registration

Certification

ANALYSIS DATA

Efficiency

Effectiveness

SIRE CARD – Personnel – Clerk

Importance ★★★☆☆

This card shows the strategic data regarding clerk

MASTER DATA

IdentificationPersonal data Clerk personal data

Seniority Level of seniority of clerk

DescriptionTask Tasks made by the clerk

Skills Skills held by the clerk

TRANSACTION DATA

RegistrationCareer Career made by the clerk

Education Data about education of clerk

Certification CertificationProfessional certification held by clerk

ANALYSIS DATAEfficiency Absenteeism Absenteeism trend

Effectiveness Effort How high is the clerk commitment

- 16 -

SIRE Card – RESORCES- Cash

SIRE CARD- Cash

Importance ★★☆☆☆

This card shows the strategic data regarding money

MASTER DATA Movables capital Amount of money available

TRANSACTION DATA

Money transferDescribes different type of money transfer

ANALYSIS DATA BudgetingAmount of money available for mortgages

- 17 -

SIRE Card – STRUCTURE – Loan department

SIRE CARD – Loan department

Importance ★★★☆☆

This card shows the strategic data regarding loan department

MASTER DATAHead of department

Data about who is responsible for managing the department

Number of loan agentTotal number of loan agents which belong to the department

TRANSACTION DATA

Mortgages issued data Data about issued mortgage loans

ANALYSIS DATA RevenueEstimated revenue from mortgage loan released

- 18 -

SIRE Card – STRUCTURE - Branch

SIRE CARD – Branch

Importance ★★★☆☆

This card shows the strategic data regarding branches

MASTER DATA

Head of branchData about who is responsible for managing the branch

Number of employeeTotal number of employee which belong to the department

Geographical positionData about the place where the branch is located

Territorial incisivenessHow effective the branch is in its territory

Volume of customer How many people are customer

TRANSACTION DATA

Money transactionMoney transactions made to provide loans

ANALYSIS DATAAmount of origination

Amount of origination made by the branch

CapturationIt indicates capacity of the branch to capture customers

- 19 -

SIRE Card – OUTPUT - Process

SIRE CARD – Process

Importance ★★★★★

This card shows the strategic data regarding the mortgage loan process

MASTER DATA Structure and flowIdentification about the structure and the flow of the process

TRANSACTION DATA

Market research Data from market research

ScheduleList of activity to do, to complete the process

Info on collateral Identification data about collaterals

Process tracking/status

information

Some information that are useful to understand the trend and the status of the process, like real estate appraiser evaluation, inquiry status, risk analysis evaluation, collaterals evaluation

ANALYSIS DATA Process KPISome indicators that are useful to understand the process

- 20 -

From SIRE to ER diagrams

Entities that are useful to model our application are added during refinement:• Appointment, because we need to manage all the appointment that involved

all the stakeholders.• Collateral, because we need collaterals first in any MGL (mortgage-loan)

request and these should be well manage in order to reduce wasting time.• Real estate, because usually the appraisal result is not computerized and the

scope of our new application is to make everything computerized.• Inquiry request, because we need to track any request and get informed

about the timeline and status.• Customer, because we want to have an overall information of the customer of

the same screen.• MGL request, because this is the principal entity of our system which contains

all information that useful to the loan agent in order to have an overall of view of the file and makes necessary actions on it.

• Loan Agent, because he is necessary to carry out the MGL application.• Notary, because in order to finalize the request the different stakeholders

should meet with the notary to validate the contract

- 21 -

INTEGRATED ER