Merging Apps and Developers

 
 
By Mel Duvall  |  Posted 2003-12-05 Email Print this article Print
 
 
 
 
 
 
 


Analysts say without the cost savings, the deal made little sense because FleetBoston operates in a mature market. However, studies show such levels of costs savings are rarely achieved in big mergers and acquisitions. A Mainstay Partners study of 450 large companies found that fewer than 20 percent achieved their targeted financial benefits from mergers or acquisitions. To get it right, Bank of America will first have to sort out a few issues. For starters, its not clear what executive will be charged with the monumental task of merging and integrating hundreds of systems from the two operations. Halesays a decision will not likely be made on who will lead the companys technology strategy until after the merger closes in mid-2004. Tim Arnoult leads Bank of Americas technology operations, overseeing 2,200 workers and an annual budget of $2.6 billion. Joseph Smialowski, FleetBostons vice chairman of technology and operations, has 1,700 technology workers and a budget of about $1 billion. Executives at Bank of America and FleetBoston werent available for comment on the specifics of their systems.
Eckenrode says there is little overlap between the banks core computer systems. Both have a history of developing proprietary applications and maintain large development teams. Nevertheless, there are some areas ripe for consolidationfor instance, the two banks use a customer information system from Hogan Systems in Dallas and a consumer-loan generation application from American Management Systems of Fairfax, Va.
FleetBoston is known as a Unix/Sun Microsystems shop, and in recent years Bank of America has also relied on Sun for new application rollouts. It deployed a mix of Sun servers on Solaris 8.0 to run its new mortgage origination application. While Bank of America has developed workarounds to integrate core systems, it has made progress on unifying operations on some fronts. It replaced two proprietary customer data warehouses in 2002 with one massive data warehouse based on technology from NCR Teradata. The warehouse now serves as a single repository for information on more than 28 million households and 2 million businesses. FleetBoston has taken a more heavy-handed approach to integration. When it bought BankBoston in 1999, Fleet ripped out most of BankBostons infrastructure and replaced it with its own. It just completed a new network command center at its data processing facilities in Albany, N.Y., bringing all of its systems and network management operations under one roof.
Given the complexity and the scale of the task ahead, a similarly heavy-handed approach may be inevitable for the new Bank of America, says Robert Smith, former chief executive of Security Pacific Corp., which was acquired by Bank of America in 1992 for $4.2 billion. "They try to present these things as a merger of equals, but they are not going to like one another in the end," Smith says. "They cant; theyre all fighting for positions."Discuss This in the eWEEK Forum


 
 
 
 
Contributing Editor
Mel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.

 
 
 
 
 
 
 

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