JPMorgan Chase & Co. has begun replacing more than 20 general ledger systems with one - from the vendor Bank One Corp. used, SAP AG of Walldorf, Germany.
The conversion should be completed by the end of next year, said Mark Melillo, SAP's senior vice president of financial services for North America. The contract, whose price neither party would disclose, was signed March 31 and announced Wednesday.
The deal continued a pattern for JPMorgan Chase, which bought the Chicago company last July. James Dimon, who was the seller's chief executive, is now the buyer's president and chief operating officer.
JPMorgan Chase has made several strategic decisions that reflect Bank One strategy, notably canceling a long-term outsourcing agreement with International Business Machines Corp. last year. Mr. Dimon is famously opposed to outsourcing.
"It seems like Bank One has basically taken over," said Octavio Marenzi, the founder and CEO of the Boston market research firm Celent Communications LLC.
Like JPMorgan Chase, Bank One was the sum of many acquired companies. Bank One had been an SAP customer since 1998, Mr. Melillo said.
Scott Pankoff, JPMorgan Chase's chief technology officer of global finance technology, said in SAP's press release that consolidating all the domestic ledgers "simplifies our operating model and reduces our expenses."
Tom Kelly, a spokesman for the banking company, would not say who furnished the various general systems it has been using. They may be from several vendors, he said. "Our company is a result of so many mergers."
One reason it chose SAP was Bank One's good experience with it, he said. Bank One also moved acquired companies from legacy systems to SAP's, he said. "We're doing it again."
Mr. Marenzi said that the contract is important for the German company. Moving so many operations to a single system "is going to be a very significant task," he said.
It will help JPMorgan Chase too, he said, by speeding up access to financial information.
SAP has a much larger market presence in Europe, Mr. Marenzi said. In this country it has faced strong competition from companies such as PeopleSoft Inc., which has long worked with U.S. banks, and Oracle Corp., which acquired PeopleSoft last year.
Mr. Marenzi said it is not surprising that JPMorgan Chase will use technology that Bank One used. Many top executives from the Chicago company, especially the former IT managers, have assumed key roles at the bank.
