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As a result of A&M’s work for Regions, approximately $3 million in qualified savings opportunities were identified separate of any savings through other “Branch Optimization” measures.

Client Mandate
Regions Financial Corporation (“Regions”) is a publicly held company that provides retail and commercial banking, trust, securities brokerage, mortgage and insurance products and services in the Southern and Midwest regions of the U.S.  Regions’ total portfolio encompasses more than 15.8 million square feet of office and retail banking space, with a total annual service provider spend of $379.0 million in 2010. Although, Regions outsources the majority of the management of its real estate to a large RE Service Provider under a Master Service Agreement, it undertook an initiative to save $10 million in FY 2011 across multiple spend categories, and the RE Service Provider’s related costs were reviewed as part of this overall effort. 

A&M also reviewed Regions’ five-year space reduction plan and identified internal champions for this program.  It is important to note that this project was not based on a specific issue, but included a forensic approach to conducting an analysis.

A&M’s Approach
A&M reviewed the RE Service Provider’s Master Service Agreement and compared it to industry benchmarks to identify opportunities for Regions in upcoming negotiations with the provider.  A&M also reviewed the provider’s staffing at all levels compared to historical internal and external benchmarks. Finally, A&M performed an analysis of all pass-through contracts and spend, and reviewed overall spend management.

Results
As a result of A&M’s work for Regions, approximately $3 million in qualified savings opportunities were identified separate of any savings through other “Branch Optimization” measures.  Our work product:

  • Identified individual opportunities for cost savings, risk mitigation, and process improvements;
  • Presented a detailed spend analysis from 2008 - 2010 in support of cost savings opportunities;
  • Provided a comprehensive summary of the RE Service Provider’s Master Service Agreement and presented opportunities for Regions to reduce costs;
  • Analyzed “Key Performance Indicators” in the Master Service Agreement and advised how these could be modified to benefit Regions, and;
  • Offered analysis of proposed “Branch Optimization” strategy and in-place cost reduction efforts