KeyCorp and other large banking companies are replacing a custom-coded in-house system for bridging incompatible computing systems with a vendor-supplied one based on the XML standard.
For years banks and other businesses have employed small armies of programmers - and, at times, big consulting companies - to build virtual bridges between computer systems that were not designed to communicate with each other. As customer relationship management has become more of an emphasis, the need for systems to communicate across product lines has grown more acute.
"Every bank and financial services institution today is interested in getting a single view of its customers," said Michael Dunn, the vice president of enterprise architecture at Key, which has replaced its in-house system and custom-developed code with a system supplied by webMethods Inc.
The Fairfax, Va., company is one of several vendors that offer packaged systems that translate information from the standards used in one application to those used in others, thereby facilitating the transfer of information throughout an organization. Its competitors include Tibco Software Inc. of Palo Alto, Calif., SeeBeyond Technology Corp. of Monrovia, Vitria Technology Inc. of Sunnyvale, and International Business Machine Corp. of Armonk, N.Y.
Last month webMethods announced that Key had deployed its XML-based computer integration software and that the results were already showing up on the Key.com Web site, which can now post richer content.
The Cleveland-based banking company says the jury is still out on whether the system will live up to all its goals, which include not only resolving communications problems but also reducing costs.
KeyCorp has begun to use webMethods for some for nonmainframe applications, replacing an in-house system, Mr. Dunn said. So far 11 of the hundreds of applications Key uses have been hooked into the webMethods server, which will support internal and external needs, he said.
As an example of an external need, he cited the desire by corporate customers to view transaction histories electronically.
Observers say assembling an accurate list of the accounts that each customer holds is not easy. It involves, for example, getting the checking account system to communicate with the credit card and mortgage systems, and none of them were built with that in mind.
"This is one of the biggest issues plaguing corporate IT departments," said Ken Kiaresh, an analyst with Buckingham Research Group in New York.
Darren Oberst, a vice president and the general manager of industries at webMethods, said that its system feeds applications - such as those that support checking, credit card, and mortgage accounts, or perhaps a bank's corporate customer's cash management program - into a centralized server that sorts out the needs of each system connected to it.
The centralized server - or network hub - standardizes how different pieces of information are represented, Mr. Oberst said. For example, if one banking application identifies customers by a last name, a first name, and a six-digit account number and another identifies them by a 10-digit Social Security number, webMethods enables the systems to communicate by translating both customer definitions into an XML-based one.
Founded in 1996, webMethods lost $8.7 million on $147 million of revenue in the nine months that ended Dec. 31. However, it says its clients include Bank of America Corp., J.P. Morgan Chase & Co., Wells Fargo & Co., MetLife Inc., and UBS Warburg.
Still, few companies seem to be moving entirely to vendor-supplied integration systems. About 70% of corporate integration needs are met by custom coding, according to a report published last summer by Soundview Technology Group Inc., an investment firm based in Old Greenwich, Conn.
Neither Mr. Dunn nor Mr. Oberst would say what Key spent to begin integrating its nonmainframe applications with webMethods software. However, Mr. Oberst said deployments of the webMethods system can cost anywhere from a "few hundred thousand dollars to a few million dollars." For that price, which is based on the number of servers used to run the system, corporate clients receive a perpetual license.
According to Mr. Oberst, webMethods chalks up additional sales as its clients connect more of its applications to the network hub, thereby requiring additional software and hardware.
