Business Intelligence: A Key to Enhanced Profitability

1. Business Intelligence:A Key to Enhanced Profitability ELFA Annual Convention San Antonio, Texas October 25, 2011

2. ELFA Annual Convention October 25, 2011 Our Moderator Paul Bent Senior Managing Director The Alta Group, LLC, Long Beach, CA

3. ELFA Annual Convention October 25, 2011 Our Panelists Michael Donnary Senior Manager / Banking and Asset Finance Capgemini, Rosemont, IL Scott Thacker Chief Operating Officer Ivory Consulting Corporation, Walnut Creek, CA

4. ELFA Annual Convention October 25, 2011 Our Panelists Richard Ryan Partner Invigors EMEA, London, U.K. James J. McKinney Head of Balance Sheet Management, Operations & Strategy RBS Citizens Asset Finance, Chicago, IL

5. ELFA Annual Convention October 25, 2011 • Our Agenda • What is Business Intelligence (BI), anyway? • The 2011 Business Technology Performance Index (BTPI) • Key findings • What’s next for BI? • What does BI “look” like? • How does it work? • Where does it fit in? • Applying BI analytics in leasing and lending • Monitoring performance • Analyzing effectiveness • Modeling and Managing processes • Forecasting trends • BI databases, resources, and information

6. ELFA Annual Convention October 25, 2011 • Our Approach Today • Interaction with you • How much do you know about BI? • What do you think about BI? • What are your experiences with BI? • Open discussion – not a lecture • Everyone’s invited to participate • Questions, opinions, ideas

7. ELFA Annual Convention October 25, 2011 • What is Business Intelligence, anyway? • Different things for different people • Internal and external information • Combines information, reporting, data, and insights • Verifies / challenges assumptions on which business operates • May be analytical, supporting evaluation • May be predictive, supporting planning

8. ELFA Annual Convention October 25, 2011 • What is Business Intelligence, anyway? • Internal • KPIs/reporting • Drill down on P&L drivers • Analyze performance & risks • Data-heavy analysis • External • Market and competitive intelligence • Growth, opportunity, and trend identification • Lighter data volume

9. ELFA Annual Convention October 25, 2011 BI – a working definition: The systematic analysis of internal and external information to yield insights that can help maximize a company’s performance, market position, and profitability.

10. The 2011 Business Technology Performance Index • 9th year for the Report • Serves as the industry benchmark for IT and operations direction and spending • Represents a summary of survey responses and an analysis • Presents insights into the continuing evolution of technology in the equipment finance marketplace ELFA Annual Convention October 25, 2011

11. 2011 BTPI – Key Business Intelligence Findings • Many organizations have several Business Intelligence tools from multiple vendors. The situation has become even more complex as the Business Intelligence tools market has seen massive consolidation. • A majority of respondents currently aggregate and report data from a data warehouse or other repository of multiple core applications. • More than one quarter use no Business Intelligence tool or manually construct reports from application outputs. • Key IT initiatives include improvements in customer self service, controls and compliance and risk management. While these are not the best of times for the industry, this year’s responses indicate improvement and optimism-- and a more forward-looking approach taken by businesses. ELFA Annual Convention October 25, 2011

12. Conflicting Priorities: Reduce Cost and Increase Business Agility? • What are the positive drivers for exploiting information in your organization? 45% Many Equipment Finance companies have in place data warehouse and business intelligence programs. Yet they are failing to see the benefits. ELFA Annual Convention October 25, 2011

13. So What is Stopping You? • What are the greatest barriers to an effective BI program in your organization? The explosion in information volume often results in inconsistencies between sources, duplication of master records, and time spent reconciling sources. ELFA Annual Convention October 25, 2011

14. To be effective and competitive in today’s post-recession environment, organizations must leverage their business information. • What’s next for Business Intelligence? • Many organizations will attempt to address opportunities through a traditional approach • Tactical fixes to processes and organizational structures. • Implementing additional IT solutions. • A number of organizations have already made good progress • Transforming themselves into information-centric organizations. • Rapid and informed decision making is key to success • The absence of good business intelligence creates the potential for failure ELFA Annual Convention October 25, 2011

15. ELFA Annual Convention October 25, 2011 • How does BI actually work? • Software systems • Standalone • Features embedded in existing software systems • Mobile apps • Analytics drawing on existing databases • Presentation capabilities tailored to user’s needs • Dashboards, real-time updates, integrated tools, reports • Focus on management effectiveness • Streamlining, not adding on • Simplifying, not complicating

16. ELFA Annual Convention October 25, 2011 What does BI “look” like? It looks like financial KPIs at a glance

17. ELFA Annual Convention October 25, 2011 What does BI “look” like? It looks like real time sales performance indicators

18. What does BI “look” like? It looks like HR stats on demand ELFA Annual Convention October 25, 2011

19. What does BI “look” like? It looks like trends and forecasts ELFA Annual Convention October 25, 2011

20. ELFA Annual Convention October 25, 2011 How does BI fit into your management and IT picture?

21. ELFA Annual Convention October 25, 2011 • The BI “Journey” • Monitoring • Analyzing • Modeling • Forecasting

22. ELFA Annual Convention October 25, 2011 • Applying BI analytics in leasing and lending (a few discussion points) • Monitoring performance • Profitability • Where do we make our money? • Can we analyze results by: • Financial products? Geographies? • Credit scores? Asset types? • Sales • How well is the sales force aligned with the most profitable opportunities? • How and why do we lose deals? • Cross selling and up-selling opportunities? • Marketing • How do we track conversion rates over time? • How do customers respond to specific campaigns and adjustments?

23. ELFA Annual Convention October 25, 2011 • Applying BI analytics in leasing and lending (a few discussion points) • Analyzing effectiveness • Vendors and brokers • What is our penetration rate? • How does it correlate to product and price offerings? • Customers • Which ones are unprofitable? What factors make them so? • How can we migrate them to more profitable products? • What product offerings result in the highest returns? • Other examples

24. ELFA Annual Convention October 25, 2011 • Applying BI analytics in leasing and lending (a few discussion points) • Modeling and managing processes • Underwriting • How can scorecards be aligned dynamically with bad debt experience? • What is the overall view of each customer relative to our exposure? • Portfolio • How will it perform under hypothetical future conditions? • What provisioning should be consider? • End of lease • What end of lease event is most profitable? Under what circumstances? • How can the highest potential end of lease customers be identified? • Other examples

25. ELFA Annual Convention October 25, 2011 • Applying BI analytics in leasing and lending (a few discussion points) • Forecasting trends • Data mining techniques • Stochastic and predictive analytical methods • Modeling built on parametric assumptions • Availability of large volumes of statistical data

26. ELFA Annual Convention October 25, 2011 • BI databases, resources, and information • Databases across competitive boundaries • BI resources and systems • Further information

27. ELFA Annual Convention October 25, 2011 Thanks for your participation. Paul Bent, The Alta Group Mike Donnary, Capgemini Scott Thacker, Ivory Consulting Richard Ryan, Invigors EMEA Jim McKinney, RBS Asset Finance