In 1998, Dorothy Njobvu Kanjautso, a 35-year-old mother of three from the village of Lilongwe in Malawi, Africa, found herself widowed when her husband died of AIDS. She had no job and few prospects. But she had a dream.
That dream came true with the loan of $133 from Opportunity International. Njobvu Kanjautso used the money to open the Ketava Nursery and Primary School, which provides education to poor children from her village. The school flourished and, with additional loans, Njobvu Kanjautso was able to hire eight teachers. Ketava now has four classrooms and 250 students. As a result of her achievement, Njobvu Kanjautso is able to care for her children, her mother and three AIDS orphans.
Opportunity International thrives on success stories like Njobvu Kanjautso’s. A Christian-based microfinance organization with deep roots in Africa, Asia, Eastern Europe and Latin America, Opportunity International has a single mission: to help the poorest of the world’s poor climb out of poverty, one small loan at a time. The loans, sometimes as little as $50, are used to start businesses—anything from a vegetable stand to a classroom.
Opportunity International has set a goal of mobilizing $1 billion by 2012 and helping 100 million people by 2015, a potentially crushing task for an organization that was, a short time ago, inputting financial data from its 45 global partners by hand.
Africa is counting on education and technology to ease poverty. Click here to read more.
There are a number of key initiatives that will help Opportunity International along its path to fighting poverty: open more financial institutions, extend into more locations and, of course, raise more funds. While Opportunity International uses technology at all levels—including biometric smart cards to provide account access to people many of whom can’t read or write—the organization is using Hyperion’s business intelligence software as a core strategic weapon.
“By 2015, we’ll help 100 million people,” Opportunity International President and CEO Christopher Crane said in a written statement. “We’re trying to raise the standards in microfinance to equal any banking system in the world. The accountability and transparency that come from excellent data management will allow us to grow and scale quickly—and Hyperion is at the center of our efforts.”
Big and Bigger
Opportunity International is one of the world’s oldest, largest and fastest-growing microfinance organizations. And with an evolving business model that includes owning banks and savings and loan institutions, as well as entering partnerships with other providers, its financial structure is complicated.
The organization is essentially a network of 45 independent microfinance institutions that operate in 28 different countries; some of the institutions are operated as banks or savings and loans, and some operate as not-for-profit organizations.
All told, Opportunity International has 960,000 customers and expects to be serving 2 million people by 2010, providing both loans and affiliated services.
In 1998, the company formed the Opportunity International Network, which funnels funds from individuals, governments, corporations and foundations into its programs. In 2000, the company began establishing FFIs (formal financial institutions) to broaden the financial services it can provide. FFIs take the form of commercial banks, development banks or credit unions.
The mix of FFIs and not-for-profit organizations makes for a potential financial reporting nightmare, according to Timothy Head, IS and performance reporting manager at Opportunity International.
“The challenge we face is that we’re a network of independent microfinance institutions operating in different countries and have to adhere to local regulatory reporting requirements,” Head said. “As a result, the systems in each of our countries are unique. We’ve worked to standardize where we can, but Central Bank reporting is different in one country than in another. … It’s our desire to collect financials and performance metrics on all partners and to be able to aggregate that data, but also to be able to analyze the data for external reporting and internal management. It’s always been a challenge for us.”
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Meeting of the Minds Opportunity International knew that technology could help it overcome this challenge, but, despite its size and stature, the organization cannot afford the hefty price that usually comes along with enterprise applications. As a result, company executives are always on the lookout for suitable software and related services that they can acquire at a reduced rate.
“One of the challenges we face is we are a multinational not-for-profit organization in many respects, with the needs of a multinational organization but not the budget,” Head said.
As luck, or fate, would have it, Hyperion CEO Godfrey Sullivan and his wife, Suzanne Sullivan, attended an event sponsored by Carol Waitte, a member of Opportunity International’s board of governors. After learning more about Opportunity International’s mission and some of the hurdles it was facing, Godfrey Sullivan saw the benefits the organization could glean from Hyperion’s business intelligence tools and linked Opportunity International with Hyperion’s head of corporate giving, Ron Dimon.
“Working with Ron Dimon and Answerthink [a systems integrator], we evaluated our BI needs, and Hyperion donated the software to meet those needs,” Head said. Hyperion and Answerthink also donated consulting services.
Hyperion, which was acquired by Oracle in April, donated a full suite of BI products to Opportunity International, including Oracle Hyperion Essbase, Oracle Hyperion System 9, Financial Data Quality Management, Oracle Hyperion Financial Reporting and Oracle Hyperion Visual Explorer.
Hyperion also donated its Web Analysis software, which Opportunity International will develop in 2008 as a GUI that will let users view data in a way that makes sense to them.
In 2005, when Opportunity International received the software from Hyperion, Head focused on building Essbase applications, migrating historic data and loading current data. In 2006, Head focused on generating reports and analysis using different Hyperion tools.
Head said the new software has helped Opportunity International automate a number of tasks, including the tracking of financial data.
“We had two challenges in the manual system,” Head said. “First, we collected a large amount of financial and operations data. We had it sitting there—a wealth of information—but [didn’t have] the tools to structure the data, to aggregate it and disaggregate it in ways that we wanted to. The second challenge was getting data from various source systems. Getting data from 45 partners was a tortured process—very manual, very labor-intensive.”
Head said his first task was to find a better way to get data into a central data repository. His team used Essbase to build a number of applications that allowed users to analyze and report on data.
From late 2006 into this year, Head has been working on rolling out Hyperion’s System 9 to partners around the world and developing new reports and analysis.
A New Data View
head said that while opportunity International had always been able to pull together data from, say, three partners in Africa, it wasn’t able to do that and then add another partner in the Philippines. Head said the Hyperion software helps the organization compare different sets of data, look across geographies and model what-if scenarios.
To deal with various data formats, Opportunity International utilized Hyperion’s Financial Data Quality Management Web-based system to implement a process of import, validate and export that brings data from partners’ financial systems directly into Essbase. Currently, Head has 15 partners reporting into the system, and five more are expected to be brought over by year’s end. Another 25 partners are scheduled to move over to Financial Data Quality Management in 2008.
“Every system will contain reports of everything we need, but in a wide range of data formats,” Head said. “[Financial Data Quality Management] will pull in data in just about any data format.”
Head said Opportunity International’s biggest challenge at this point is bandwidth. “Sometimes in Malawi, it’s a struggle to get a solid Internet connection to our server in the U.S., but, increasingly, even in developing countries, Internet connectivity has improved,” he said.
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Big Gifts, Big ReportingOpportunity International boasts a 98 percent repayment rate on its loans—higher than many credit card companies see. That success in helping individuals has, in turn, helped Opportunity International score some major charitable gifts.
In 2006, the company received a $50 million commitment over a 10-year period from longtime donors John and Jacques Weberg. The donation, for the purpose of granting more small loans, was the largest single private donation ever given to a microfinance organization.
The Weberg gift has been supplemented with two separate grants from the Bill and Melinda Gates Foundation. In 2005 the foundation granted $2,230,642 over three years to help develop a trans-African network of new commercial banks for the poor. The following year, the foundation granted an additional $5,447,746 over three years to create or expand commercial banks for the poor across five African countries, according to the foundation’s Web site.
But the grants, particularly from the Bill and Melinda Gates Foundation, come with some strict reporting requirements—something Opportunity International might not have been able to do prior to Hyperion’s entrance into the company’s IT infrastructure. “The Gates Foundation requires detailed reporting on where their money goes,” Head said. “[Hyperion] reporting was in place and it’s growing, but the needs of the Gates Foundation have led us to structure our reporting in different ways than we had planned. Now we’re working to tailor some reporting.”
In general, said Richard John, chief financial officer at Opportunity International, the complexities of pulling data together and the need for decision making has grown.
John said the company started developing a system in the 1990s to track data from its overseas opportunities, and has been involved in continuous improvement of that system since. But, at some point, it just became too unwieldy. “It ended up that we had probably one of the bigger [Microsoft] Excel applications around, with an Excel database that just became increasingly cumbersome to get the right types of reporting out of,” John said.
That system now is being continuously automated with Hyperion’s BI software, at the same time Opportunity International’s ownership is changing in various organizations.
“Many of the [financial institutions] we own 100 percent, and most of the others [we own] an extremely high percentage of,” John said. “The not-for-profits are ours, as well, but they’re members of the Opportunity Network, so we sit on the board of all 45. Eighteen are formal institutions out of the 45, so those 18 institutions are reporting [financial data to Opportunity International] monthly. The other 27 are still reporting on a quarterly basis. They all have different general ledgers, different reporting.”
With the implementation of Hyperion technology, John’s daily life has changed—for the better, he said. The applications have made access to data much simpler and timelier, he added.
Answering questions from other members of Opportunity International’s management team and preparing presentations for the organizations’ various boards has also become much simpler. “We really needed that [simplicity], growing at 30 percent over the past five years,” John said. “The sophistication of the business has ramped up incredibly over the years, and this has really helped us take a look at the performance of the business. We can prioritize where we want management effort and prioritize where we can invest based on performance.”
While Opportunity International was able to determine in the past where it needed skills within the business, and where it wanted to invest next, the process was a whole lot slower, according to John.
Opportunity International is also leveraging Hyperion technology to help it meet its future goals.
“It actually will facilitate growth,” John said. “Without it, we would be very hard-pressed to grow as fast as we’re planning. In order to do that, we’ll have to maintain our growth around the 25 percent-per-annum range. That means for the next five to seven years, we’re going into two or three new countries per year and significantly expanding operations even in the countries where we operate today.”
Hyperion’s BI technology will help Opportunity International make investment decisions. “We’ve been launching a variety of businesses over the last couple of years, and we do that on the value we discover,” said Don Ingle, vice president of public relations at Opportunity International. “We had been doing that without a lot of data. Now, as we get into a new business—microschools, for example—the ability to have these systems in place will allow us to move smarter, more quickly and more efficiently to expand or adjust as needed.”
The IT department’s Head added, “What we are trying to do is move toward a motive by which we operate based on conversations around data and performance rather than conversations around opinions. So we are moving toward a model based on hard facts and performance data, and not just on what we think is going on.”
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