In this story, we helped the bank quantify and focus on branch profit performance. They knew some branches needed to improve, and Simplified Profitability provides a rational, common sense comparison. Let’s see what I mean.

Here is an actual Simplified Profitability Story in a full motion graph.

First, scroll down to the bottom of this post to the motion chart. On the top right under Color, select ‘Unique Colors’ from the drop down. Then, just below that, from Size, select ‘Income’. Then for this scenario, check the boxes next to ‘Average’, ‘Branch 21’ and ‘Branch 40’. Below the branches un-check the ‘Trails’.

The branches are listed in the sidebar to the right.  The sizes of the bubbles are the branches’ total loan and deposit income including interest, fees and interchange. Notice that one of the bubbles is the Average of all the branches. That Average bubble lets us see the overall effect of all the branches’ profit results over time.

The vertical axis shows the profit after loan loss expense, but before taxes,  for each branch  from our organizational profit model over a period of six months.

The horizontal axis uses calculated cost of direct and indirect controllable branch expenses as basis points of total funds used by the branch – taken from the funds transfer module.

What we want to see is the Average bubble moving up and to the right and growing larger. Certainly we want to see unprofitable branch bubbles display those improvement patterns.

Check it out! See what happens when you roll your cursor over any bubble. Then click the triangle button the box on the lower left to start the playback. Watch what happened with the branches you checked. One of them clearly improved. It became profitable and reduced expenses. The other did not.

The punchline – Some branches increased their monthly profit contributions, while lowering the basis points of their operating expenses. Other branches clearly struggled to move from losses to profits. </strong>.

Simplified Profitability includes ‘What If?’ modeling for branches that are losing money to estimate revenue and expense driver tactics to reach breakeven and produce profits – This motion chart is a powerful method of showing degree of success or failure of chosen tactics.

BTW you can speed up or slow down the playback with the small triangle just to the right of the playback button. Go ahead and play with the Trails, and other check boxes.

Credit for creating this kind of motion chart technology goes to Hans Rosling, gapminder.org, googlevis, and R. The data and implementation is copyright © 2013 Thomas N. Gerry.

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