CINCINNATI - With location critical to the success of a new branch, more design/build firms are customizing geographic interface system (GIS) engines to identify ideal sites.
“We’re trying to make it as much science as it has been, in the past, more art,” said Arp Trivedi, VP-strategic planning at DEI Corporation. He added that, from the credit union’s perspective, the software “put(s) me in places where most of my members congregate and where I have the greater potential to go after them and their family members.”
Tools such as GIS are “connecting the dots,” Trivdei added, pointing to the model variations that allow for everything from extremely narrow to overly broad examinations of a community to determine the best site.
“The next layer is to take the credit unions member data and profile of highly profitable members and, within the same strategic geographies, finding new members that are similar in profile to highly profitable members today. The model is flexible enough to look at the wide open market and the closed market as well,” said Trivdei.
Location is not the be all and end all for a new branch though.
Trivdei pointed out that demographic information can be used to determine what a new facility should look like and what services should be available there to attract the most existing and new members to the branch. To that end, credit unions can actually tailor their buildings’ aesthetics and features to the surrounding community.
Once a prototype is established, Trivdei actually runs financial performance simulations for his clients to make sure they are comfortable with the decision to go ahead with the new facility.
“If I put one branch into the wrong place at the long time, I would spend $2.5 to $3 million on the branch and the land,” he said, adding that the $5,000 to $30,000 invested in a simulation is well worth the investment “before we get into that phase where you are spending real money. We have tried to mitigate the risk as much as we can by simulating what you are going to buy.”
With hard construction costs continuing to rise, credit union boards are likely to become ever more concerned with future branch profitability, and accurate budget estimates when deliberating the prospect of building a new facility become ever more critical.
Once the decision to pull the trigger has been made, project management tools like Timberline are also being utilized by many design firms and their subcontractors to organize files, track costs and provide budgetary estimates. These pieces of software also track inflation as well as materials and labor costs on a regional level. The numbers are updated on a quarterly basis to ensure the most accurate budget estimates, which can be tricky given that materials costs vary widely based on where a project is located across the United States.
“If you don’t know walking that through the door, you can either be way high or way low and that’s not good for the client,” said Bob Saunders, EVP-construction for MomentumBuilds in Seattle. “If we can identify costs very quickly, if we can get an accurate schedule quickly, if you can show what the building is going to look like–you’ve gotten rid of most of the client’s nervousness.”
For More Information
www.level5.com
www.momentumbuilds.com
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