Reengineering shouldn't mean reinventing the wheel.

Some companies can point to success in reengineering their business, through lower costs and strengthened competitiveness. Unfortunately, many others have come away from multimillion-dollar reengineering efforts disappointed and discouraged.

Reengineering is more than the latest buzzword; it is an important and necessary process. Businesses must streamline to eliminate waste and become more competitive. That's especially true for banks, where the toughest competition has become financial giants such as Merrill Lynch and Fidelity Investments.

Reengineering begins with a clean slate. Nothing is given - not the people, not the technology, not the way things get done, and certainly not the budget. And that clean slate is both a liberaring notion and a threat to reengineering success.

Lack of Understanding

In one cautionary example, an asset management company in Boston attempted to redefine work flows - classic reengineering - in the reconciliation area. The project was supposed to eliminate 60% to 70% of the work force by combining job responsibilities and installing some advanced computer systems.

One big reason the project failed was that the consultants did not understand the business they were supposedly redefining - no one on the staff had ever worked in the area. More than a year passed before they even delivered a plan. As for implementation, no one was able to get the new technology to operate smoothly.

Too much time and money went into developing blue-sky notions of the future of asset management and ideal systems. Too little effort was spent on designing systems that can be installed in time to enhance competitiveness.

We suspect that implementation problems are behind the estimated 75% to 85% of reengineering projects in the banking industry that fall short of their goals.

Yet bank after bank gives short shrift to systems implementation when trying to construct state-of-the-art services through reengineering. And that's especially true in trust and asset management.

Here's how a reengineering attempt typically plays out for trust and asset management businesses: The consulting team usually must learn these complex businesses on the job.

The consultants spend nine to 12 months deciding what capabilities the services and systems should have, and another nine to 12 months deciding on how to build those capabilities.

That's two whole years - millions of dollars - and still no improvement in competitiveness. The competition won't stand still for that long.

It is hard to imagine that any business can wait that long and spend $30 million to $100 million just to be mediocre.

There is a more rational approach, one that combines the best of reengineering with practical experience in asset management.

The goal is to make asset managers more competitive in the shortest time possible. The basis of the approach is simple. You don't have to reinvent the wheel.

You can piggy-back on the knowledge of professionals in the field. This is true not just in asset management and trust, but in all business lines. Given that expertise, it is possible to side-step more than a year of analysis and paralysis, and start filling in sections of the clean slate.

Avoiding Traps

Let us start with what services an asset manager must offer in this more competitive industry, a subject that typically requires some reengineering and consultants to spend a year studying.

It is clear from our discussions with asset managers and investors that funds are going into increasingly sophisticated instruments.

Therefore, a top-drawer trust system, for example, must handle multicurrency accounting as well as fixed-income and derivative securities processing. That is several months saved.

Next, let us turn to the technology, which is usually the subject of another megastudy. We can save months here, too. What is needed with technology is integration, not just the technology itself. Advanced systems must mesh with existing systems, imaging technology must fit together with other technology, and client-servers must also be woven in.

As for the implementation aspects, avoid the traps by focusing on installing the pieces you need, one at a time. For example, install a derivatives accounting system to augment your main software, if your market requires it - do not rush to redo the entire asset management system, unless your clients need new capabilities.

Prototype Approach

If you decide not to buy software, build your own quickly. For all the sense rapid prototyping makes - building a system ASAP and then refining it - I am surprised it is not more widely embraced.

That approach, which combines the power of reengineering with industry expertise, can make an asset management provider more competitive in less time.

Maybe it does not feel as trendy as starting with a clean slate and a team of ostensibly unbiased MBAs. But what counts is not who did the best study, but who competes better in retaining customers and getting new ones.

Mr. Spencer is senior vice president and general manager of Broadway & Seymour, a software and consulting company in Charlotte, N.C.

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