Standard Life sees sales rise as it reaches first stage in BI roll-out

Standard Life's use of business intelligence software to target the most profitable new business for its fund management operation has coincided with a sharp rise in sales at the unit.

Standard Life's use of business intelligence software to target the most profitable new business for its fund management operation has coincided with a sharp rise in sales at the unit.

Gross investment sales at Standard Life Investments grew by 200% to £5.9bn in 2005. Institutional sales grew by 213% to £2.4bn in the same period.

The group began using BI software last May to examine profit trends at the fund management unit. The unit's finance director, Niall Howard, said the prime driver for using the BI system was to "focus on institutional business, such as pension funds, and the relative profitability of those funds."

He said the SAS software was helping to shape better targeted new product development and giving Standard Life Investments greater transparency about where its costs lie.

"We know the margins we are trying to achieve with new products. The application enables us to know what sales we would need to achieve," said Howard.

The tool has also been used to decide whether the fund management business should expand into new overseas markets.

Standard Life Investments' parent company is its biggest customer, and the application has also improved the visibility of costs across both parent and subsidiary, helping Standard Life Investments to justify and communicate the costs it charges to the group.

The finance department at Standard Life Investments is using the tool to examine the cost base of third-party investments that it sells, as well as its own products.

Parent Standard Life now plans to begin using the application more widely across the group, to analyse the profitability of its own product lines after the company floats on the London Stock Exchange later this year.

Standard Life Investments began searching for a BI application last March after it decided that the Excel spreadsheet it was using was not providing managers with the information they wanted.

Since the spreadsheet already held a business model, SLI was able to construct a model on the new SAS application and begin using it within six weeks.

This was last published in February 2006

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