BBVA Compass gains greater financial insight while reducing costs

Shrinking financial reporting, budgeting and planning overheads for a rapidly growing business

Published on 04-May-2012

Validated on 12 Nov 2013

"The flexibility of IBM Cognos TM1 for all these different applications and the ability to view data in different layers and at different resolutions really make it an ideal solution, not only for our office of finance, but increasingly for users in other areas of the business." - Laura Smith, Director of Corporate Finance Analysis and Support, BBVA Compass

Customer:
BBVA Compass

Industry:
Banking

Deployment country:
United States

Solution:
BA - Business Analytics, BA - Performance Management, Social Business for Customer Service, Social Business for Reinventing Client Engagement, Social Business

Overview

BBVA Compass is one of the leading banks in the US Sunbelt region, with 716 branches across Alabama, Arizona, California, Colorado, Florida, New Mexico and Texas. It employs approximately 12,000 people in its three main divisions – commercial banking, retail banking and wealth management. It is part of the BBVA Group, an international banking group that operates in more than 30 countries and employs more than 100,000 people worldwide.

Business need:
As one of America’s fastest growing banks, BBVA Compass knew that manual, spreadsheet-based financial reporting and budgeting would not be sustainable in the long term. The bank decided to automate and accelerate these processes using business analytics software.

Solution:
BBVA Compass adopted IBM® Cognos® TM1® and used it to automate and accelerate its annual budgeting process. Subsequently, the bank also developed TM1 solutions for management reporting, sales tracking, customer segmentation and workforce planning.

Results:
Accelerates the budget process by 25 percent, saving one full month per year. Avoids the need to deploy approximately 20 additional full-time employees for manual analysis and budgeting tasks. Reduces the management reporting cycle by more than 65 percent, providing information to senior executives 10 to 15 days earlier than before.

Benefits:
Supports rapid business growth while reducing manual reporting workload through automation.

Case Study

BBVA Compass is one of the leading banks in the US Sunbelt region, with 716 branches across Alabama, Arizona, California, Colorado, Florida, New Mexico and Texas. It employs approximately 12,000 people in its three main divisions – commercial banking, retail banking and wealth management. It is part of the BBVA Group, an international banking group that operates in more than 30 countries and employs more than 100,000 people worldwide.

When BBVA Compass began its business analytics journey 15 years ago, the story was quite different. The bank was much smaller, with around 100 branches mainly located in Alabama and Florida. Nevertheless, it began to outgrow its existing financial reporting and budgeting processes, which were based primarily around spreadsheets.

“When I joined Compass, budgeting was quite a laborious process; it started in September and finished at about the end of January. All the data had to be consolidated and validated manually,” explains Laura Smith, Director of Corporate Finance Analysis and Support. “Financial reporting was mostly manual, too: data was extracted from the mainframe into Excel, and then manipulated and formatted. It could take until the 15th or 20th day of the month to get the previous month’s management report ready, which had an effect on agility.

“The bank was looking to expand, and it was clear that these manual processes were not going to be viable in a larger organization. We needed to find a new solution that would help us grow and provide more detailed and flexible reports, without placing further pressure on our busy office of finance.”

Faster budgeting with IBM Cognos TM1

The retail banking division at BBVA Compass had recently purchased a solution – an earlier version of IBM Cognos TM1 – for performance scorecarding, and the corporate finance department decided to evaluate it as a planning and budgeting tool.

“We started with five divisional finance managers as the main users, and quickly got up and running with a budgeting model for our business,” explains Brad Crowe, Director of Planning and Analysis.

“It was clear from the start that TM1 was going to be a dramatic improvement on our manual process; instead of sending spreadsheets back and forth between the Division Finance Managers and the line-of-business finance teams, we now have users entering the data directly into the system, and the consolidation and validation was handled automatically.

The IBM Cognos TM1 solution automatically imports data from the general ledger, loan and deposit systems, and line-of-business finance managers also contribute budgeting data for each of their respective units by entering it directly into the system. Brad Crowe adds: “As the business has grown, the effort and complexity of the budgeting process has remained stable. We now have more than 700 branches, about 800 to 900 budget points and 600 users – even so, our annual budgeting process runs 25 percent faster with TM1 than it did when we were a much smaller organization using spreadsheets. In terms of time, we’re saving a whole month, and we’ve eliminated countless hours of manual consolidation and error checking. The budgeting team in our retail banking division is now just three or four people; we would probably need about 20 if we were still doing it the old way.”

Accelerating management reporting

With the success of the budgeting application, BBVA Compass began developing other solutions based on IBM Cognos TM1. “Management reporting with TM1 was another big step forward,” says Smith. “The monthly financial close takes less than two days, whereas previously it took more than a week. That was a real ‘wow moment’ for the accounting department – it’s an almost unbelievable improvement.

“Instead of getting the management report on the 15th or 20th day of the month, our senior management team now has it on the 5th day, so we’ve accelerated the process by at least 65 percent. Moreover, because we have a more robust and automated approach, we’re more confident in the quality of the data as a basis for decision-making.”

Sophisticated sales tracking and customer segmentation

The TM1 team has also created a highly sophisticated sales tracking tool, which enables users in the office of finance and across the retail banking operation to gain much deeper insight into sales.

“Again, we used to do sales tracking in Excel, and it was a time-consuming process,” comments Wes Waldrop, TM1 Team Leader. “Now we have a huge cube that allows users to drill down from the corporate level to our four regions, 40-plus districts, and more than 700 branches. We used to assess each branch on a fairly basic level: effectively, how many checking accounts and loans they were selling. With TM1, the extra level of detail gives us a much better understanding of how our sales teams are actually performing across different products.”

Faster deployment with Cognos Performance Blueprints

In the near future, BBVA Compass is planning to roll out another new tool based on IBM Cognos TM1 – a workforce planning application. This application will allow more efficiency and flexibility in many areas of the planning process.

“We are currently using a legacy database system, and as we have expanded, it has started to struggle with the sheer scale of the task,” comments Waldrop. “The TM1 solution we’re testing at the moment will be a big improvement, so we’re very excited to get it into production. We have built it based on the IBM Cognos Performance Blueprint for Workforce Planning Performance, which we downloaded for free from IBM. The blueprints are a great idea because they provide a standard, best-practice model that can simply be customized to your own business, so they really accelerate the deployment and reduce the risk.”

Smith concludes: “The flexibility of IBM Cognos TM1 for all these different applications and the ability to view data in different layers and at different resolutions really make it an ideal solution, not only for our office of finance, but increasingly for users in other areas of the business. Because the bank has grown so significantly in the last 15 years, if we had not adopted TM1, we would almost certainly have needed to hire a much larger staff to provide even a basic level of reporting – let alone the sophisticated dynamic analyses we can perform today.”

About IBM Business Analytics

IBM Business Analytics software delivers actionable insights decision-makers need to achieve better business performance. IBM offers a comprehensive, unified portfolio of business intelligence, predictive and advanced analytics, financial performance and strategy management, governance, risk and compliance and analytic applications.

With IBM software, companies can spot trends, patterns and anomalies, compare “what if” scenarios, predict potential threats and opportunities, identify and manage key business risks, and plan, budget and forecast resources. With these deep analytic capabilities, our customers around the world can better understand, anticipate and shape business outcomes. For more information on Business Analytics please visit: ibm.com/analytics

Products and services used

IBM products and services that were used in this case study.

Software:
Cognos TM1

Legal Information

© Copyright IBM Corporation 2012. IBM Corporation, Software Group, Route 100, Somers, NY 10589. Produced in the United States of America. May 2012. IBM, the IBM logo, ibm.com, Cognos and TM1 are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided. The client is responsible for ensuring compliance with laws and regulations applicable to it. IBM does not provide legal advice or represent or warrant that its services or products will ensure that the client is in compliance with any law or regulation.