Banks Set Merger Plan
The merger of Bank of America Corp. and FleetBoston Financial Corp. will test the abilities of IT executives to plan and execute on a grand scale. The companies face formidable obstacles on their way to an anticipated $1.1 billion in savings.
Bank of America needs to assimilate FleetBoston's technology and systems, along with its 18 million customers, quickly and without customers being inconvenienced. Its executives need to map out which of its infrastructure and applications FleetBoston will migrate to, then methodically move Fleet's systems over.
The strategy differs from the one used by NationsBank when it acquired Bank of America in 1998. NationsBank mixed and matched apps and platforms from the two companies. This time, most of FleetBoston's major systems, with the exception of its branches, are likely to be scrapped or migrated to Bank of America systems, says Dennis Rygwalksi, former director of IS at FleetBoston who's now general manager of finance-industry solutions at Exigen Inc., a business-optimization software vendor.
The companies need to focus on melding business processes as well as technology, says Chris McLaughlin, director of financial-services marketing at FileNet Corp., which supplies back-office processing software to both institutions. Many of their business processes are hobbled by older legacy systems, he says.
Fleet had its share of problems when it merged with BankBoston in 1999. Fleet ripped out BankBoston's infrastructure, including the branches, which BankBoston had just revamped, and replaced it with its own. FleetBoston "put in [its] older technology, with adverse consequences for customers," says Jim Eckenrode, VP of consumer banking at research and advisory firm TowerGroup.
No matter what the integration approach, Rygwalksi says, a merger on the scale of that of Bank of America and FleetBoston will require flawless execution and acute attention to detail if it's to be a success.