Article

How are you measuring your ATM business?

A new ATM benchmarking study and industry report underscores the value of learning from others' best practices.

July 23, 2012 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

The purpose of benchmarking is simple. As ATM Industry Association CEO Mike Lee defined it in a recent commentary, it is "to improve competitive efficiency as a source of productivity growth, and to turn around sub-optimal aspects by emulating a superior-performing model."

Even more simply, it's what Toyota did after it got tired of eating Ford's dust when it came to body integrity. And it's what Ford then did after it got tired of having its lunch eaten by Toyota when it came to reliability.

While the purpose of benchmarking is simple, the practice isn't always. Comparisons aren't apples-to-apples from one business culture to the next, and benchmarks can be moving targets. It's enough to make some businesses retreat into the bubble of inertia — and inevitable decline.

For ATM deployers who see the bubble for the dangerous place it is, ATMIA and management consulting firm Value Partners teamed up for their first-ever ATM Industry benchmarking study last fall. The partners released their findings just this month.

Recently, Flora Hamilton, ATMIA executive director for Europe, and Francesco Burelli, partner at Value Partners, participated in a roundtable Q&A via email with ATM Marketplace to explain how the study came about and what the findings mean.

ATM: First, what prompted ATMIA to undertake the benchmarking study?

H&B:[The genesis] was in an ATMIA membership survey back in 2009 in which benchmarking was the most requested, wished-for service by banks. At the same time, Value Partners was developing a similar idea of a cost studies project; hence we ended up exchanging notes and developing the ATM Benchmarking together.

ATM: How were study participants selected?

H&B:Participation came from membership. We offered the opportunity to take part to the ATM Benchmarking study to all our current and perspective members and a number of these — both banks and IADs — replied with interest.

ATM: The study concluded that similar estate size or geographic proximity cannot be used to formulate best practices. In that case, where should operators turn to develop an efficient, profitable business model?

H&B:While best practices may not be available with players from the same region or by size of portfolio, there are methods to learn from the best, adapting the best practice to suit market peculiarities.

This type of knowledge is typically difficult to gather as it constitutes competitive advantage for an ATM operator, but ultimately it is in reach of those investing time and efforts in improving their business performance.

Curiously, one of the smaller participants in the study has shown to have best practice performance on a number of key areas; they were questioned and investigated by Value Partners to ensure the accuracy of data submitted.

ATM: It seems that multi-functionality will become increasingly important in ATMs. Is there a risk that by adding multi-functionality — particularly consumer services such as ticket sales, payments and the like — deployers could end up with a fragmented and unworkable business model?

H&B:Absolutely not. It is obvious that the ATM value proposition has to be adapted to the ATM location, type of customer and sought role for the ATM. There will be places where it will be better to limit the functionality to pure cash services but there are a significant number of instances in which ATM operators can benefit by leveraging this self-service, low cost channel to take to market other services both in terms of additional revenues or as on a cost – substitution base.

ATM: How can operators benefit from a study like this?

H&B:Participants benefit from the ATM Benchmarking study in many ways:

Making comparisons — compare key operational areas of your ATM business against national, regional and global benchmarks.

From there it is possible to identify savings areas in which to focus improvement efforts. Moreover the study has provided evidence that there is a lack of transparency in costing and pricing to the point that large scale providers do not have any benefit from scale whatsoever from a cost prospective.

ATM: In keeping with the concept of benchmarking, will ATMIA be conducting this study as an annual measure of the industry?

H&B:This study is planned to take place on a bi-annual basis. The next round will formally be kicked off in the second quarter 2013.

The "ATM Benchmarking Study 2012 and Industry Report" is available to all current ATMIA members at the ATMIA website.

For more on this topic, visit the trends/statistics research center.

photo: Flickr/Louise Docker

About Suzanne Cluckey

Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.

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ATM Industry Association (ATMIA)

The ATM Industry Association, founded in 1997, is a global non-profit trade association with over 10,500 members in 65 countries. The membership base covers the full range of this worldwide industry comprising over 2.2 million installed ATMs.

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