Before the recent merger that created Citigroup, life was complicated enough for Mary Alice Taylor, head of Citibank's operations and technology division.
Behind the hoopla surrounding that record-shattering transaction was a back-office restructuring of the old Citicorp, a huge 18-month project that is still a half-year from completion. Ms. Taylor said it is "pretty much on track," which may be small comfort now that the integration of the old Citicorp and Travelers Group is looming.
But Ms. Taylor is a believer in the synergistic promise of the merger and in the benefits of running common systems in all regions. That was the Citibank credo, to serve customers "with the same speed and accuracy no matter where they do business-whether that's in Uruguay or China," she said in a recent interview.
Citicorp chairman John S. Reed recruited Ms. Taylor, 48, from Federal Express Corp., the overnight-delivery specialist that likes to say it is in the logistics business. Ms. Taylor brings that mentality to her assignment, which she said is to "improve the efficiency of building those capabilities that support the business."
Now that Citigroup has come into being with more than $700 billion of assets, more than doubling Citicorp's asset total, "we are at the point of deciding what product sets have synergies," Ms. Taylor said.
Her teams are analyzing which systems to keep, which to run in parallel, and which to merge.
"Travelers and Citibank have a lot of distinct businesses that are very complementary but not in direct overlap," she said. "So a lot of that capability will continue to exist."
Full-scale systems integrations are more likely to occur on the corporate side of the bank, where the two merger partners overlap in such areas as capital markets, fixed income, and foreign exchange.
It has not been decided who will have ultimate responsibility for operations and technology in the merged institution. At Travelers the role is decentralized among business units. Ms. Taylor's title-corporate executive vice president of global operations and technology-refers only to her role within Citibank, overseeing 70,000 employees, but she is in a position to spread those already considerable wings.
"She has a big job to accomplish in every regard," said Diane Glossman, banking analyst at Lehman Brothers, New York. "She is the first to be given the adequate authority and responsibility to have a shot at consolidating the technology base of the company across the world."
The analyst said the real test will be whether the changes affect expenses and, so far, "expense growth continues to be strong."
The company "needs to make darn sure that the senior management team is more than competent and has full support to get the job done," said Michael Ancell, banking analyst at Edward D. Jones & Co. in St. Louis.
"I would have to say Citi has spent a lot of money on technology and wasted a lot of money on technology in the past. A more efficient, centralized approach is the way to go."
Mr. Reed had been re-centralizing Citicorp's once diffuse technology organization for the last few years, and Ms. Taylor's arrival in January 1997 helped codify the new direction.
"I have pulled all of operations and technology together" for the corporate and consumer sides of the bank, she said.
"If you think about it, the consumer bank handles huge volumes of transactions that are of much smaller value. The corporate bank handles fewer transactions but with large dollar value. There are real synergies you can take advantage of because you can add more transactions without really impacting capacity."
With consumer and corporate banking sharing data centers, more information flows between the two businesses, and "we save on premises costs," Ms. Taylor said.
Citibank is reducing its number of data centers worldwide to 12, from 66.
The bank announced 7,500 job cuts last year, and analysts expect another 8,000 to 16,000 to result from the merger with Travelers. About 50% of those affected are in Ms. Taylor's operations and technology group.
Ms. Taylor, who splits her office time between Citigroup's headquarters in New York and technology headquarters in Tampa, has organized the processing centers around the world to facilitate round-the-clock capabilities.
As volumes peak in one part of the world, they may be slowing in another. Rather than building capacity to take care of one location's peak, "we can move that peak for processing," she said.
Outside the United States, Citi's main processing centers are in Dublin, London, Singapore, Hong Kong, and Sydney.
Serving 100 countries, "our systems are certainly far more global than anyone else's," Ms. Taylor said. "Systems have to be able to handle global complexity as well as the volume of transactions."
She got to know complexity at Federal Express, where she spent 16 years, most recently as senior vice president responsible for pickup and delivery operations in North America.
She said that company was obsessed with customer satisfaction, which breeds the kind of loyalty that financial services providers are now hankering to establish.
"I grew up learning how to operate in different environments where customers' expectations and economic factors are different in one part of the world to another," Ms. Taylor said. "If you satisfied that customer, they were going to buy from you again."
In Citigroup, Ms. Taylor's pressing priorities are the year-2000 issue and the European Monetary Union.
"I took a hard line with year-2000," an effort that the bank has estimated will cost $650 million. "We had to be extremely aggressive."
With roughly five million lines of programming code, the bank took a "conservative approach" and expects to have its systems ready for testing by 1999.
Citibank will begin its testing of Europe's common currency, the euro, in the current quarter.
To accomplish those tasks under time pressure, "we look for people who are current in new technologies, such as Java and client/server environments," Ms. Taylor said.
"Every company looks to build a high-quality information technology organization, and Citi is no exception."
Her group, she said, complements e-Citi, formerly known as the advanced development group, under corporate executive vice president Edward Horowitz, who arrived at Citicorp at about the same time as Ms. Taylor. E- Citi "was set up to be the eyes and ears of technology and to take advantage of it for the future," she said.
Once Mr. Horowitz's group seizes on a technology "it comes back over into my organization," Ms. Taylor said.
"We take control of it and support it going forward. We look at how to take new, emerging technologies, whether they are optical scanners, imaging techniques, or Web-enabled, and make our processing centers more efficient and dynamic and deliver a better service to the customer."
Another priority for Ms. Taylor is building a centralized data warehouse. The bank has data warehouses for different businesses but is driving toward "interconnectivity," Ms. Taylor said.
In the past, she said, the bank has used data warehousing "very effectively to help us produce superior returns."
With Citigroup, she said, the benefits of knowing more about customers and cross-selling products will be even greater.
