Canadian Imperial Using Software to Analyze Its Paper Flow

The Canadian Imperial Bank of Commerce is using a unique software system to help analyze a decidedly low-tech task: the movement of paper around its back offices.

The Toronto-based bank, which has $103 billion in assets, is using specialized software that analyzes work procedures in its check-clearing operation.

The purpose of the system is to help bankers find out where and how operations can be redesigned for maximum productivity.

"With any operation you're always looking for opportunities to be more efficient," said John Bumister, vice president in the bank's technology office. "Like many organizations, we've been through many efficiency and cost-reduction programs with varying degrees of success. We have now reached the point where we need to look at our processes and at reengineering them."

Every day, delivery trucks ferry bags with checks and other documents from the bank's branches to its central data-processing centers. The checks must be sorted, processed, and cleared by early morning of the following business day.

To better gauge the operation's productivity, information on these tasks is entered into an Apple Macintosh computer, using modeling and simulation programs from Meta Software, Cambridge, Mass.

"By doing analyses and |what if' tests, an organization can test out changes to processes before implementing them in the real world," said Roelf Woldring, a Toronto-based computer consultant who has worked with a number of banks.

Procedural improvements may not only create new cost reductions and savings, but also may permit expansion of back-office activities without additional investments in either technology or personnel, and may even make new services feasible.

Work flow modeling and simulation is an area of mathematics and operations research that predates computers but that has been greatly aided by the use of technology. The underlying theory is that work flows and behaviors can be represented by mathematical models.

Computers make it possible to develop more sophisticated models -- and to project them in graphic, animated formats similar to those used in video games.

The new programs also make it easier for business people to use the often-complex simulation tools. "We needed a modeling methodology and product which was easy for bankers to learn, understand, and use, and which would give answers meaningful to nontechnical people," Mr. Bumister said.

Expense of Check Processing

The bank selected its check-processing area as its first test for the modeling software, said Pam Wilson, assistant general manager at the bank.

"Check clearing is a major undertaking in Canadian banks, and accounts for a large portion of our processing efforts," she said.

"The bank wanted to know the cost to move a particular check, and the impact of any change," said consultant Mr. Woldring. "This is a materials handling problem. Modeling and simulation offered a way to look at it." And there were surprises.

For example, checks were moved by elevator from one floor to another, which many people believed slowed down the handling process and created bottlenecks. But the model analysis demonstrated that moving to a single floor would save the bank only three minutes in processing time.

Daniel P. Dern is a freelance technology and business writer based in Watertown, Mass.

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