Technology priorities

Now one of the biggest five commercial banks in the country, and a Fortune 50 company, Wachovia has been a corporation focused on growth for some time. Since the old Wachovia Corporation merged with First Union in September 2001, the Charlotte based giant has been involved in 27 additional merger or acquisitions. It now offers full financial services through offices in 21 states, employs around 110,000 staff and services more than 13 million households and businesses.

And in the 21st century, as like any of its competitors, at the heart of these operations is a massive technology infrastructure – supporting 3400 financial centers, 770 retail brokerage offices, and over 5000 ATMs, not forgetting the remnants legacy systems from all that M&A activity. Heading up this operation is Martin Davis. As corporate CIO, Davis heads up a technology function with a budget of over $1billion a year and more than 500 staff. The complexity of the operation is illustrated by the fact Davis himself has six line of business CIOs reporting into him.

As you can imagine, the role keeps him busy. The day before we speak Wachovia has announced it has completed on its latest acquisition – the purchase of Missouri based AG Edwards – and it is clear from our introductory chatter that this is a man well used to cutting to the chase. Despite the previous day’s announcement, Davis is keen to stress that Wachovia is not just about the frenetic approach to inorganic growth it has taken this decade. It prides itself on a retail strategy based on service, sales and customer acquisition, and it is on this topic that we begin our conversation.

Enhanced functionality

“Our overall strategy is around customer orientation,” Davis explains. “Six years in a row we’ve been number one in customer sat scores [on the University of Michigan’s American Customer Satisfaction Index] and from a technology perspective, the number one thing it means for the IT organization is that our systems are available, reliable and stable.” If keeping the lights on and ensuring the platforms are stable for customers is the priority (as it is for most businesses), then close behind in the reckoning is driving those platforms forward to give customers a better experience.

“Number two is around providing additional feature capability and functionality in those channels that truly touch the customer from a direct standpoint – whether that be the mobile, online, or any other channel,” Davis says. This is a process of incremental change. Davis explains how his technology team works hand-in-hand with individual business units to identify desired enhancements to functionality, and it then sits with him to “execute”.

An example of this incremental process in practice is Wachovia Mobile. Launched last December, the service was the first offering by a major US bank in the mobile space. Originally it allowed customers to access internet enabled phones and PDAs to monitor account activity and balances, and transfer funds between customer accounts.

First launched on the Pocket IE OS, Wachovia has extended access to Palm Treo users since the launch, and is working to improve capability with Blackberry. The service is already averaging around 100,000 unique visits per week, and in March Wachovia announced it was partnering with AT&T and Firethorn to offer the service through a bespoke application on customers’ AT&T phones. This will give more robust functionality, and the phased implementation will eventually offer the application pre-loaded on new handsets.

This is just one example of Wachovia’s customer focus in action, but as Davis points out, the firm has “literally hundreds” of projects active across all its platforms in any given month. “We have a number of new features and functionalities coming out all the time,” he suggests. “Whether it’s our voice response channel, our online banking channel, whether even it’s our branch channel, every channel that touches our customer we’re coming out with new feature functionality almost on a monthly basis.”

Whatever the platform that individual enhancements are being made to, the focus is always very much the same: enhancing customer satisfaction. “We’re very much looking at the customer experience,” Davis expands. “We have in-house teams that focus on working very closely with customers through focus groups and usability testing, and we’re very much focused on the look, feel and experience for our customers.”

Managing complexity

With such a granular approach to different platforms, it is clear that Davis tries to remain above the fray of individual projects to some degree, taking a more strategic view. In such a diverse corporation this must be a challenge, and we discuss how he keeps track of so many different projects?

“The way we are organized is by line of business,” Davis explains. “So for a consumer customer at the general bank, all of that work is prioritized under one of my line of business CIOs. From that standpoint it’s very easy for them to prioritize the work on a given channel and then execute.” And it seems that each of the different lines of business have relative freedom to pursue their own specific needs. “We allow each or our CIOs to have the autonomy to provide unique IT solutions for their given lines of business.”

However, given the sheer volume of work on the IT organization’s plate, and scarce resources mean that there is a prioritization process between the different lines of business. “My CIOs are working closely with their lines of business and operations organizations to lay out a road map and strategy,” Davis continues. “As a collective body we then come together to lay out an overall view of the organization as a whole.”

And this obviously gives an opportunity for Davis to ensure that where opportunities for efficiency across the piece exist they are implemented. “We’re always looking for synergy from a solution perspective across the entire enterprise,” he admits. “For example, the needs of our corporate and investment bank at times are very different from the needs of our general bank. At those times we allow the CIO of the corporate investment bank the autonomy to bring in solutions that uniquely fit that line of business. But there are other times that we won’t allow CIOs so much freedom.”

Davis puts forward Wachovia’s data warehousing platform as a solution that makes sense to be implemented wide. “That’s not something that we’re going to allow each and every line of business CIO to bring in their unique flavour of the month if you will.”

As we discuss this aspect of complexity, we move towards a discussion of the M&A activity that, alongside outstanding customer service, has been such a feature of Wachovia’s activity in the last few years. The day before we speak the business had completed on the purchase of AG Edwards, and with it another complete new technology infrastructure. Taking this as an example, how has Wachovia tackled the challenge of integrating such the diverse set of technologies it must have collected along the way?

For Davis it is a question of assessing the strategic rationale behind each project. “In an acquisition such as a regional bank like South Trust, we very clearly rolled them onto all our existing systems and platforms. It’s a very clear and clean integration. But if we acquire an organization with a unique business model – say the way the World Savings or the Golden West organization did their mortgage business – in that case we’d roll around 90 percent of their systems onto our platforms, and then the 10 percent of applications that have a unique business value or unique business model, we sustain and maintain those applications.”

The overall effect Davis suggest is that Wachovia “runs a very efficient shop” and is not left with any great number of additional systems. It sounds an easy process to describe, but in practice what does that integration process look like? What does the playbook look like for AG Edwards going forward for example?

The answer it seems is a lot of hard work from a dedicated merger team. “Hundreds of people will be focused on that integration activity day in day out,” Davis outlines. “We announced the official close where our shareholders voted to approve the acquisition. Now all the fun work begins in integrating all the systems and platforms and you can expect an 18 to 24 month process.”

Seamless IT

With ongoing projects from pervious mergers ongoing it is clear why Davis puts such store on the prioritization processes within his technology team. “It really goes back to prioritization,” he muses. “Number one in our environment is taking care of the production systems. After that we’re going to look at our risk and regulatory environment, and ensuring we have a sound environment there. After that we deal with the mergers and acquisitions and we take that work on next. And then after that we build in the discretionary line of business activity. So we have a very structured process around what work we’re going to take on.”

If Davis makes his job sounds easy, this reflects in part the very culture he has been building within the technology team. He has been focusing on developing what he calls a “seamless IT culture”, and we are curious to ask what this entails. “There are a lot of moving parts in the IT organization,” Davis explains. “So what we try to do is for any given customer – whether internal or external – is give them a seamless view through the CIO.”

What this means is that the customer doesn’t get to know about all of the “moving parts” that are involved in any IT implementation. “Often we’ll have to say ‘OK we need this team from the server environment, we need that team from storage, we need this team from application development, and we need this team from security.’ We don't want the customer to see all that.”

To avoid this, the CIO for each line of business acts as the broker of IT solution. “The CIO then works internally with the IT organization to bring to the table all the moving parts. That’s really what this is model is all about – we’re really trying to face off with our customer in a very seamless way. We’re still focused on that, and we’ve made a lot of great progress in that area.”

We begin to reach the end of our discussion and we ask Davis to look forward, and tell us what will be filling up his (and the industry’s) inboxes in the next six months to a year. Aside from taking care of the merger and acquisition, risk and regulatory, and functionality enhancement that make up the bulk of his day job, Davis is attracted by the possibilities of virtualization. “If you look at that [virtualization] it’s going to provide us some unique opportunities for efficiency, so we need to get that work done,” he argues.

The other issue at the top of his mind is the potential of some of the consumer devices in the mobile space that will provide Wachovia with more opportunity to enhance its customer offer. “Some of the devices that are coming up will provide us some unique opportunities for application development; pushing solutions down to those mobile devices – I’m very excited about those opportunities.”

His final thoughts though are not about technology per se, but the people that make it all possible. “Really leveraging a global work force is the other thing on our mind,” he reveals. “We want to make sure we’re really picking up the best talent wherever in the world we can find it to bring solutions to the table.”

This focus on talent is no surprise; Davis is clear that it is people that make Wachovia tick. “I’d say we’ve got a great team here at Wachovia not only from an IT perspective, but also in our businesses and operations. It really takes all of us to execute it. The one great thing about Wachovia is that we have a great people who have great skills to execute. And it all comes down to the people at the end of the day.”