industry
ZIONS DRAMATICALLY BOOSTS SHAREHOLDER VALUE

Challenge
Industry
Financial Services

Business Pain
Lengthy budgeting and reporting cycles, and lack of access to accurate data hindered Zions' ability to make strategic business decisions.

Why Business Objects?
With Business Objects, Zions was able to deploy an automated budgeting process, which shortened cycle times, reduced gaps in financial data, increased data accuracy, and provided more actionable information.

Business Objects Products and Services
BusinessObjects Forecasting FI

BusinessObjects Budgeting FI

BusinessObjects Plan Reporting FI With its total assets exceeding $42 billion, Zions Bancorporation (NASDAQ: Zions) operates 470 full-service banking offices throughout the western United States. The company's collection of community banks target small and medium-sized businesses in high-growth metropolitan markets, a strategy that has earned Zions a spot on the S&P 500 Index and NASDAQ Financial 100 Index, but has also presented a unique set of challenges. "We let our community banks operate independently," explains H. Walter Young, senior vice president and manager of Corporate Finance for Zions. "But we have to be able to share data across all banks in order to manage overall corporate performance and centralize risk management functions."

Zions lacked access to accurate, real-time data across all of its banks and operating units, putting the company's executives in the awkward position of not having visibility to the most up-to-date information. "Senior management would talk to the analysts once a quarter just a few days after getting the most recent quarter's net interest margins," Young notes. "They didn't have detailed information on actual monthly margins or time for thorough analysis. It also took us six months to build our yearly budget and we were barely able to reconcile results by the board meeting." Not only was the lack of access to real-time data and the elongated budgeting cycle inhibiting timeliness and accuracy, it was not possible for Zions to consider various scenarios for strategic planning purposes. The company's senior management wanted the planning processes improved.

Zions began to look for a software solution that could make a difference. "We wanted to aggressively slash our budgeting cycle from six months to one, which would have the added benefit of allowing us to forecast or look at alternate scenarios more frequently," Young says. "We also wanted to keep closer track of our thousands of cost centers, provide more accurate and trust-worthy numbers to our executives, and begin developing strategic plans that would boost our financial performance and ultimately enhance shareholder value."

Approach After implementing BusinessObjects Planning for Financial Institutions (FI), Zions was able to reduce budget and reporting cycle times, increase accuracy, and deliver up-to-date numbers to facilitate better business decisions and enhance financial results. Even though each Zions bank operates independently, Zions corporate can now closely monitor overall performance. "Business Objects allows us to roll up results by various organizational hierarchies," Young explains. "We can view and manage performance by bank charter or by executive vice president. We soon anticipate the ability to do all of our line of business reporting in Business Objects."

BusinessObjects Budgeting FI seamlessly interfaces with Zions' general ledger, so that executives producing budgets have actual numbers readily available throughout the budgeting process. Customizable views of information allow Zions to deliver detailed, accurate numbers to management – whether it be marginal spreads or asset and liability model cash flow views – that serve as the basis for sound business decisions at each bank branch. BusinessObjects Forecasting FI utilizes cash flow information (including both rates and balances) from Zions' asset and liability system, making it easy for executives to understand and plan for new business volumes at the appropriate spread to projected market interest rates. Zions is also able to consider a variety of drivers when it builds its forecasts, enabling the company to make solid business decisions that increase profitability even when market conditions change dramatically. With BusinessObjects Plan Reporting FI, Zions has shifted from depending on disconnected and manually populated Excel spreadsheets to a rich set of drillable reports, which review financial performance, various trends, balance sheet analysis, and even shareholder value added (SVA), all which grant greater insight into the bank's performance on a variety of levels.

Results Since implementing Business Objects software, Zions has radically shortened its budgeting and reporting cycles, increased the accuracy of its forecasts, and strengthened its financial position by developing and implementing a strategic plan based on the accurate, timely data now available.

It used to take Zions six months to complete its budget – in addition to the exorbitant personnel cost, the budget was often outdated and imprecise by the time it was completed. Now with Business Objects, Zions is completing, inclusive of an executive review, its corporate budget in approximately one month – a reduction of nearly five months in cycle time. The budget numbers are more accurate, providing a sounder foundation for business decisions. "We've gone from guesswork to cash flow budgeting," Young states. "We've had a significant increase in forecast accuracy. The shorter cycle time allows little gap between the actuals and projections." Consolidating and reporting on the numbers has also become easier for the company. Whereas it once took three days to consolidate margins, it can now be done in a few hours each month.

The shortened budgeting and reporting cycles are also yielding financial wins for the company. "These shortened cycles allow us to provide better and more timely guidance to the investment community" Young says. "This has resulted in greater transparency and strengthened our credibility with investors."

Zions' management is also making better day-to-day business decisions because it has access to the exact information it needs in real time. "Management is better informed all around. We can see if we're making money on loans we originate or discover pricing problems when they are being made and where they are occurring," Young says.

By freeing up time from budgeting and accessing its now accurate data, Zions has been able to focus on and develop strategic plans for the first time, yielding perhaps the biggest windfall for the company. "The plan we formulated this year using Business Objects went to rating agencies and was part of the supporting documentation for a large merger," Young says. "This plan bolstered the agencies' confidence in our earnings forecast and enabled us to minimize the cost of debt to finance the merger – saving us nearly $30 million in funding costs over the next 10 years."

Source: Business Objects

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Bevorstehende Veranstaltungen:

CFO Rising West – 30. Sept. bis 3. Okt.

EPM Launch (Webseminar) – 25. Sept

Auf der Suche nach Klarheit: Für transparente Entscheidungsprozesse im Unternehmen – 27. Okt. in Frankfurt

Management Performance mit Dashboards und Scorecards im Banken- und Versicherungswesen – 27. Nov. in Frankfurt. Weitere Informationen folgen in Kürze.

Management Performance mit Dashboards und Scorecards im Banken- und Versicherungswesen – 28. Nov. in Zürich. Weitere Informationen folgen in Kürze.