SW Tool Lets Bank Test What-If Scenarios Wit

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 said.

With a single decision informed by the system, banks can save the cost of the software, said Ben Bassi, Virtual Strategy's president and CEO. "We're the only product we know of that's not encumbered by a multi-dimensional database."

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.