Magazine article American Banker

U.S. Bancorp Seeks Savings Via Branch-Analysis System

Magazine article American Banker

U.S. Bancorp Seeks Savings Via Branch-Analysis System

Article excerpt

U.S. Bancorp Seeks Savings Via Branch-Analysis System

U.S. Bancorp is looking to improve branch management and reduce operating costs by hundreds of thousands of dollars per year with software that helps measure branch productivity.

With the system, called Data Envelopment Analysis, the Portland, Ore.-based banking company hopes to improve productivity by 10% to 20% next year.

"We've always been interested to find that a person, when transferred, often says something like, |This place isn't as busy' or |This place is twice as busy'" as the branch the employee came from, said Pete Sinclair, senior vice president in branch distribution at U.S. Bancorp.

Understanding Differences

"We've determined that we've got significantly different paces of activity taking place in our branch distribution system," Mr. Sinclair said, "and we want to understand why."

The system, marketed by H. David Sherman, an associate professor of business administration at Northeastern University in Boston, grew out of a doctoral dissertation by one of Mr. Sherman's professors. Mr. Sherman helps a bank customer collect data, then interprets it with the help of sophisticated software algorithms.

Mr. Sherman said the software and his services cost a bank $20,000 to $80,000. "We're looking at a 20-to-1 payback in the first year," said Mr. Sinclair.

Data Analyzed

U.S. Bancorp recently completed an analysis of data about its products and operations culled from the first quarter of 1991. …

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