John R. Beran entered the eye of a technology storm when he joined Comerica Inc. two years ago.
He was just what management needed, said an associate, overseeing radical changes in operations while preventing the Detroit banking company from getting caught on the "bleeding edge."
Mr. Beran, executive vice president and chief information officer, "has a knack for knowing exactly how technology will enable the rest of the corporation-it's not just technology for technology's sake," said Mary Ellen Baker, senior vice president and operation services manager.
This quality came in handy at an organization that has been revamping its operations in a big way.
This year Comerica expects to cut its work force by 1,890 people. It recently sold its Illinois banking subsidiary to ABN Amro for $190 million.
The $34 billion-asset company is 25 months into a project called Direction 2000, aimed at both reducing costs and enhancing revenue.
Mr. Beran and the technology group have been centers of attention.
"One of the driving purposes behind Direction 2000 was to ensure our ability to continue to fund the technology investments that we need to make to grow," Mr. Beran said.
Mr. Beran, 44, started in banking right out of college, at the now- defunct Winters Bank of Dayton, Ohio, in 1974.
That same year he graduated with an engineering degree from the University of Dayton. He completed his master's in management science there in 1979.
Before joining Comerica, he was president of Money Access Service Inc., the automated teller machine network owned by Electronic Payment Services Inc. of Wilmington, Del. His position at MAC evolved out of his work for Society Corp., one of the four banks that founded EPS.
At Cleveland-based Society he served as senior vice president of the electronic payment services group and chairman and chief executive officer of Green Machine Network Corp.
Mr. Beran says Direction 2000 is much more than a blueprint for reengineering or expense reductions.
"Through either reengineered processes or implementing new technologies, we are really changing how we do business," he said.
As head of Comerica's service company, he plays a role that is critical to the completion of Direction 2000. "Technology is going to be a major factor that will allow us to execute the reengineering ideas that have been put forth," Mr. Beran said.
By consolidating the management of its local area networks, "we'll probably reduce our total cost of desktop management by as much as 15% to 25%-and that's through reengineering of all the processes that are done," Mr. Beran said.
Another streamlining effort will be the replacement of many of paper forms with electronic versions available on-line, he said.
The bank will also be standardizing its product offerings across its geographically diverse organization.
For subsidiary banks in Michigan, California, Texas, and Florida, "we supported a lot of different flavors of products," Mr. Beran said.
Comerica, known as a pioneer in check and document imaging, is examining ways to leverage this technology across its entire organization.
For example, in mortgage loan documentation, imaging can cut "servicing time by significant amounts," Mr. Beran said.
In January the bank, which is on the forefront of this technology, upgraded its digital image archive, which is supposed to save money by eliminating the need for microfilm records.
Through the Direction 2000 effort, Comerica has shown itself to be "a company that is doing an excellent job of managing its costs," said Fred A. Cummings, a bank analyst with Cleveland-based McDonald & Company Securities.
Excluding a $90 million restructuring cost, the bank's efficiency ratio dropped from 60.09% in 1995 to 55.67% in 1996.
Now attention may turn to revenue growth. "Ninteen ninety-seven is probably the year that we want to look and see what kind of achievement is made toward building revenue," said Joseph J. Labriola, director in corporate bond research at Deutsche Morgan Grenfell.
Analysts see room for improvement in consumer operations.
"The question is what sort of sustainable competitive advantage can they develop similar to what they have in the middle-market arena," said Michael L. Mayo, a CS First Boston bank analyst.
That reflects a somewhat dated view of the bank, Mr. Beran said. In the past few years, Comerica has been working to raise the profile of its retail business.
"We have probably increased spending on the retail side to put it more in balance with the wholesale, but we have not done it at the expense of wholesale," Mr. Beran said.
The bank is expecting to increase its investment in alternative delivery systems by about 80% to 90%, he said. Technology is seen as a key to meeting the retail challenge through new products and services in addition to efficiency.
The bank has been working on integrating several sources of customer and business data, including an enterprisewide customer information system, a customer knowledge data base, and management information system.
By linking these information systems, Comerica hopes to improve cross- selling and gain a better understanding of a customer's total relationship with the bank.
The customer knowledge data base, in particular, is designed to measure customer profitability. The project is expected to be completed by the third quarter.
A new deposit system developed by Hogan Systems Inc. is in the offing for the first quarter of next year.
It will incorporate "about 200 man-years of requests" that the bank has received, Mr. Beran said.
Comerica, which has been offering banking by personal computer since 1989, also expects to enhance electronic banking services.
Mr. Beran keeps his eye on the competition by using the World Wide Web: "I look at what other banks are doing" several times a week, he said.
"Everyone's got a home page-big deal. To me, the real key is ... how we are going to use the Internet to transform how we do business," Mr. Beran said.
He said he feels he has found like-minded allies in the other 15 member banks of Integrion Financial Network, an electronic banking partnership spearheaded by International Business Machines Corp.
"We all are looking to Integrion to be our platform for the facilitation of home banking and other self-service delivery of products, and a common access that we would each individually have had to build ourselves," Mr. Beran said.
To maintain its competitive position in the wholesale arena, the Detroit-based bank also intends to bring some of its imaging products on- line for corporate customers. Comerica already offers a CD-ROM product that contains a customer's check images and related account information.
"It's easy to get hung up and talk about bytes and bandwidth and browsers," Mr. Beran said. "But the name of the game is: It has got to work for the business."
