By Ray Birch
MILWAUKEE—Credit unions with a clear vision of their future are doing a better—and more cost-effective—job of constructing operations centers today, according to one expert, who outlined the right and wrong ways to build these in-demand facilities.
Tom Kennedy, president of the design/build firm La Macchia Group, told CUToday.info that as more operations centers are being built as credit unions look to centralize operations and even member service, credit unions that are doing it right are constructing facilities that will be relevant for many years—and will be completed at a lower price.
“This, as we know, is much more than checking out how many offices you need,” said Kennedy. “It's more about figuring out what might you add to your business in the future. What kind of creative things might you do? How often are you going to be shifting things around because your business model might evolve, because you're looking at doing some mergers, supporting more ATMs? It’s paying attention to those kinds of things and having flexibility built in. For example, how much extra space do we create just to allow for future flexibility?”
Operations centers, clearly, are more sophisticated than a branch—everything from HVAC, electrical, distribution of IT and more, Kennedy pointed out.
“Your energy bill is huge in the operations center and it's got to be paid attention to during design,” advised Kennedy.
An Early Point of Discussion
According to Kennedy, when La Macchia meets with a credit union early on it makes a point of discussion around an operations center exit strategy if the business model changes.
“What if in six or seven years you decide you're going to go to a three-operations-center model? What's your exit strategy from the building you just constructed and how do you recover the investment?” Kennedy asked. “It's very complicated and there are many aspects to it, and there's a lot of opportunities to make mistakes. It's very important that the planning stage be executed just as precisely as possible.”
One Frequent Mistake
Tom Kennedy
One mistake Kennedy said the company often sees credit unions make in the planning stage is they don't adequately build for the future and find themselves having to expand or construct another operations center in the relative near term.
“I've seen these happen as early as three years after an initial center is constructed—the credit union is looking at a second iteration of what they just built, and that is very expensive,” he said.
Kennedy stated that while operations centers may be viewed as generic, they are far from that.
“There are many different versions,” he said. “Typically, they tend to be a single facility where you centralize your key operating aspects of your credit union. But different organizations pull different aspects of their business into a central core building, and in the grandest mode they pull in everything, except for those areas necessary to operate the branch network. Put simply, it's a big building with a lot of people that do everything you need at the core of the credit union business.”
Evolution Takes Place
As credit unions have grown and COVID has driven remote work, the operations center has been evolving, Kennedy said.
“There is the embracing of the hybrid worker, which means a different kind of work environment,” he said. “It's not really the traditional office work environment, where everybody has a permanent seat every day. It requires a different model, a different way to do business.
In some cases, Kennedy said, operations center footprints are actually shrinking.
Get Flexible
While the credit union needs a clear vision to build a center that performs, it also must dedicate more time and money to a around flexibility according to Kennedy.
“Credit unions want to create this foundation building that will allow them to facilitate all of those different creative ways to expand their business into the future,” Kennedy said. “They want a great flexible platform to launch that stuff from. It’s like being the aircraft carrier; they can take care of whatever's coming in the future and deal with the issues at hand.”
A Recruitment Tool
In addition, Kennedy said an operations center when built correct can help with employee recruitment and retention.
“It's a war to get people today and it's not easy,” Kennedy reminded. “Every credit union we talk to is struggling here—trying to secure the best talent. A key aspect of doing that is having environments that are attractive to current and potential employees, and resonate with demographics. Workers want an environment that makes them feel at home, that makes them feel culturally connected to the organization. It's creating a place where people really want to be. That is a very big and powerful aspect of credit union growth.”