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Insight analysis shows that CIBC was better off looking to external resources than adding unnecessary process and function to their internal infractructure.

One of North America's leading financial institutions, CIBC serves more than nine million customers through its electronic banking network established across the world. To sustain further growth and development on this global scale, CIBC expanded from three strategic business units to seven.

Client Situation
The enormous restructuring significantly impacted the company’s internal operations. Specifically, CIBC’s Human Resource (HR) systems and administration became too complex to provide efficient service to the now widely dispersed employees.

CIBC needed to develop a new strategy to close the gaps. The solution wouldn’t be simple. It required a deeper understanding of internal processes and the associated costs. From there, CIBC could evaluate technology platforms, labor-saving strategies and outsourcing options.
CIBC turned to us to help develop this strategy.

Client Requirements
After an initial comprehensive analysis, we determined that CIBC needed to:

The Insight Solution
We deployed our Outsourcing Due Diligence™ (ODD) service to provide CIBC with detailed knowledge of their HR operations.

The Insight project team developed a list of HR activities by function (payroll, benefits, call center, pensions, recruiting, and training) and measured activity unit times through Structured Metrics® automated data collection technology.

Using hourly expense rates, the team calculated unit costs. Key process driver metrics were generated and included cost per pay stub, cost per benefit enrollment, cost per pension calculation, and cost per hire.

Our ODD solution also derived an overall capacity factor for CIBC's HR group. This output efficiency figure allowed CIBC to benchmark its internal performance against similar measures reported by other financial institutions.

Results
Insight determined that, compared to other HR organizations, CIBC's resources were well utilized. Process improvement alone wouldn’t make much of an impact on its internal technology needs. Instead, CIBC looked to outsourcing as a viable alternative in meeting those needs.

CIBC engaged several BPO firms, making it clear to each that the successful bidder would provide its services at a unit cost lower than what CIBC currently paid. Each firm was provided with our findings related to key HR metrics. When apprised of CIBC’s rather efficient internal unit costs, several firms even withdrew from the bidding process.

In just 8 weeks, the RFP process was complete and a seven-year, $160 million deal with EDS to outsource all HR processing functions had been negotiated - very much in favor of CIBC.

About CIBC
CIBC has more than nine million personal banking and business customers. With more than $287 billion in total assets, it offers a full range of products and services through its comprehensive electronic banking network and at branches and offices across Canada, the United States and around the world.

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