The Business Challenge Canadian Imperial Bank of Commerce (CIBC) has six million retail customers; 17,000 commercial, corporate and government customers; nearly 1,400 branches; 3,200 ATMs; and more than 45,000 employees. There comes a time in the life of most large corporations when business conditions get so competitive, or the company has grown and expanded to such an extent, that the financial reporting systems that served it well for years are no longer adequate. CIBC faced this challenge about three years ago when management realized that its methods of measuring financial performance were increasingly inadequate. The bank's financial applications and reporting systems, implemented over many years, lacked common standards and had not kept pace as the company grew and branched out into new products and services. As a result, management was increasingly dissatisfied with its slow organizational responsiveness and rising costs. The lack of integration of financial operations and systems was limiting growth because of the difficulty of introducing new products and their associated financial controls and performance reporting. How Accenture Helped Accenture was called in to work with CIBC to help it perform at a higher level. The first thing that the Accenture/CIBC team decided to do when they began their work together was conduct an initial system-wide evaluation of all functional areas against industry benchmarks. The results of the evaluation were not good. Financial reporting came in below industry standards in every category—general ledger, financial planning, management reporting and analysis, accounts payable, fixed assets and reconciliation. Only external reporting met industry standards. Further analysis uncovered the extent to which CIBC's systems were incompatible with each other and incapable of being adapted to changing business requirements. Accenture then worked with CIBC to implement standard economic reports that measure economic performance in a sophisticated manner, separating financial accounting and management accounting; focusing on business activities and off-balance-sheet items; and providing multi-dimensional attribution of capital, cost of funds and process costs. This approach to advanced management accounting policies and standards such as risk-adjusted return on capital and economic value-added—can be applied to the organizational, product and even customer dimensions. CIBC has also developed the capability to measure the costs and capacity utilization of manual and automated processes. High Performance Delivered CIBC now has the capability to understand the economic impact of customer behavior in terms of how customers use products, how they respond to incentives, their channel preferences and their individual risk profile. The ability to understand how customers use products and services, and seeing which of the products are truly most profitable, is invaluable. As a result, CIBC can calculate a "customer-profitability statement" that contains information on servicing expenses, the costs of financial advisors, relationship and servicing fees, and product expenses. Customers who previously might have appeared equally profitable can now be evaluated more accurately.  To Top
|