Comdata signs pact for systems overhaul.

Comdata Holdings Corp., a major supplier of payment services to the trucking, gaming, and retailing industries, has signed a multimillion-dollar contract with Broadway & Seymour Inc. to overhaul many of its technology systems.

Comdata, which had revenues of $193 million in 1992, operates a telecommunications network, called the Comdata Network, that provides many of the card authorization and funds transfer services of a retail bank.

Reducing Costs

The company, based in Brentwood, Tenn., expects to reduce operating expenses of the affected areas by about 30%, or $2 million annually, by the end of 1994, said Denny Hanson, executive vice president and chief financial officer.

Comdata hired International Business Machines Corp. to run its mainframe data center in 1991, but the company runs a network of personal computers itself, and decided to hire Broadway & Seymour to link the two systems.

"We run a lot of IBM mainframes, with a lot of repetitive processing, a lot of repetitive authorizations," said Mr. Hanson, a former banker who came to Comdata from C&S/Sovran in 1991. "The problem we face is getting to the information contained on those mainframes more easily."

Five Areas Targeted

Comdata is 35%-owned by Welsh Carson Anderson & Stowe, a venture capital firm that specializes in computer technology businesses.

Separately, Comdata last year restructured debt taken on in the 1980s. "They're now postured to make advances when the economy recovers," said Lawrence C. Petrucci, a fixed income analyst with First Albany Corp., in Pittsburgh.

Comdata has targeted five back-office areas for improvement: customer service, credit and collections, bank reconciliations, cash applications, and chargeback areas. It expects to complete the project with Broadway & Seymour, based in Charlotte, N.C., in June 1994.

Mr. Hanson said no layoffs were anticipated, but that staff would be streamlined through attrition. Comdata generates about $12 million a year in revenues doing check collections and authorizations for supermarkets and mass merchandisers.

Another $71 million in annual revenue comes from credit card cash advances to casino customers who have Mastercard, Visa, or Diners Club cards. Comdata also derives about $110 million in revenue from services to the trucking industry, including a magnetic stripe card similar to a bank card that truck drivers can use to pay for gas, food, and telephone calls when they are on the road.

As part of the back-office re-engineering project, Comdata is installing a document image processing system to capture and store the underlying documents for advances and funds transfers. Currently, these files are stored in warehouses, and must be retrieved manually when customers have questions.

With the image capture system, service representatives at personal computers will be able to retrieve the images while customers are on the telephone, and to send a copy of a disputed chargeback automatically, by fax.

Work Flow Software

Comdata also is installing work flow software in its bank reconcilement area. The software employs technology called object oriented programming, which will make it easier for programmers to build and modify the software to meet changing, requirements.

The software manages the flow of electronic file folders, routing folders from workstation to workstation.

The sofware also tracks the activity of individual customer service representatives, showing the number of files processed, the number resolved, and the number still open.

In the credit and collection area, daily reports will show each collector the largest dollar amount that is delinquent, and the oldest delinquent accounts.

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