Top 3 Current Projects

Corporate Actions Income Processing

Objective:

We are installing a new corporate actions income processing system - using an enhanced version of Tata Consultancy Services' NCS system - that will integrate into our back-office brokerage platform. The focus is on cost savings, by making us far more efficient in the processing of corporate actions. As such, we are looking at payback in less than 18 months.

Expected Completion:

It should be implemented by June or July 2007.

CRM System

Objective:

We will be installing a customer relationship management system, Microsoft Dynamics, for all of our retail branches. Microsoft has invested more than $2 billion into its package in the last year and it's all created around Outlook, which is very familiar to our brokers and will help with some of the training issues. Initially, we will be the largest user of the product, so we can provide some product development guidance to Microsoft. We are using a Sales Logic product for some CRM applications for our in-house people, however.

Start Date:

Fall 2006

Expected Completion:

It will be a two- to three-year rollout.

SunGard PlanningStation

Objective:

The rollout of SunGard's financial planning package, PlanningStation, for our retail brokers will help us in recruiting new financial advisers because it's a product that not everybody has and it provides a lot of data. It also helps advisers in setting up a client - it helps with compliance issues because you have setup plans for customers that you can track and rebalance as the clients' suitability requirements change - and it has asset allocation-type features. So it helps clients improve their financial well-being, which is our goal for our financial advisers.

Start Date:

Summer 2006

Expected Completion:

Approximately 18 months.

2007 Initiatives

Software Upgrades

We will upgrade a couple of things that are not really applications - for example, implementing Microsoft's Vista on the workstation. And we are looking at the new package for SQL Server. These are just things we have to do because we try to stay current on all the types of software we're running. Those are major efforts when you're dealing with 14,000 workstations. From an applications perspective, we're doing a lot of work in the annuities space.

Vitals

IT Budget:

Approximately $107 million. We've had approximately 7 percent growth this year, and for the coming year it will be about the same.

Key Technology Management:

• Mark Abbott, Head of Product Planning and Development
• Nancy Wehrman, Head of IT Operations and Infrastructure
• Bruce Philapoon, Head of Engineering
• Sheryl Brownhill, Head of Service Management
• Dave Linington, Vice President of IT Administration

Size of Technology Team:

775 employees.

Percent of IT Projects Outsourced:

Between 15 percent and 20 percent.

Key Technology Partners:

We currently run pieces of Comprehensive Software Systems (a joint venture with a number of other brokerage firms). We are a large Microsoft customer and use Hewlett-Packard as our main hardware vendor. If it is an area we see as a real competitive advantage we will develop the technology ourselves; otherwise, we buy software. The trick is making all the applications fit together seamlessly.

Success Metrics:

All of our major projects undergo an analysis after completion: Did it accomplish the initial goals? Did it save the money, produce the revenue and/or provide the efficiency we said it would? Did we do it on time and on cost? We also are doing much more-detailed project scoping on the front end and educating the business side about the proper way to do it because we'll have a better product in the end.