Chase Manhattan Corp. is spending millions of dollars in its effort to become the first bank to give innovative work group software to thousands of its imployees.

Officials contend that the sofware from Lotus Development Corp., Cambridge, Mass., called Notes, will give the bank a competitive edge by making employees more productive, better informed, and better team players.

"Its a substantial investment to provide our people with the technology and information they need to be more knowledgeable than the competition," said Craig Goldman, the company's chief information officer in New York.

Chase started installing Notes two years ago and now has more employees using it, by far, than any other bank, according to computer industry officials.

Others Conduct Tests

At least nine other banks have tested the software, or launched pilot installations, including BankAmerica Corp., Barclays, Bankers Trust, Citicorp, and Royal Bank of Canada.

Nearly 1,500 Chase employees use the software now, including president Arthur Ryan, said Michael A. Mandelbaum, a vice president and Notes specialist at the bank.

Mr. Madelbsaum said thousands more Chase employees are scheduled to get the software over several months.

Chase officials wouldn't disclose how much they's invested in the product, but, based on current retail prices, the total investment thus far may exceed $2 million, not counting staff training and additional programming by the bank's staff.

But even though Chase officials are confident that the software will make the bank more competitive, they admit they currently lack hard data to justify the enthusiasm.

"The tangible returns have been difficult to focus on and identity," Mr. Goldman said.

Notes software is a unique product that, in issence, transforms personal computers - when linked together - into masive, easy to use, electronic filing cabinets.

People use Notes software to store text and electronic copies of paper documents in a multitude of electronic "folders."

Notes distributes these electronic file folders throughout an organization, and decides which users can open them and which can't.

Many in Corporate Finance

Mr. Mandelbaum said that now some 600 of Chase's Notes users work in corporate finance, while the rest work in a smattering of areas, including private banking, real estate management, corporate communications, and data processing.

Mr. mandelbaum said bankers are using Notes to create more than 100 different file folders of information, including data listing customer contacts, previous and pending financing deals possible purchasers of the bank's real estate holdings, and credit ratings of the bank's clients.

In one application, the bank is using so-called artificial intelligence processing techniques to automatically read news reports delivered electronically.

The software looks for actions by credit rating agencies that affect bank clients, and automatically appends the reports to Notes file folders with other client information.

Some bankers said they love the software.

"I think its terrific," said Maximo Blandon, a vice president in the bank's project finance unit.

Mr. Blandon said he and nearly two dozen other Chase bankers around the world that finanace large development projects use the software to maintain a central file of all customer contacts and financing deals.

Previously, he said the bank didn't have any central file with this information. This meant that if a banker in Europe wanted to find out how a particular deal in the United States was structured, the European banker would have to call a North American banker, who, in turn, would often have to rummage around his or her desk to retrieve the information.

Now the banker in Europe can quickly pull this information from a Notes file folder.

"It gives us higher efficiency per individual, and the ability to proactively meet client needs," Mr. Blandon said.

But Mr. Mandelbaum admitted that the value of speedy accees to shared information is hard to quantify.

"How do you measure the value of someone getting files like that?" he said.

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