shares of their customers, their investment in the necessary technology tools has increased tremendously. Banks of all sizes are investing millions in data warehouses and data base management methods in hopes of making their sales forces more effective.

I can't help but wonder: Have we put the cart before the horse?

This may be questioning motherhood and apple pie. How could we oppose equipping sales forces with the best weaponry available to compete with nonbanks and others heavily armed with customer information? How could we not make the necessary investments in improving direct mail and outbound telephone-selling?

The question is not whether there is a need for these instruments, but how are we designing them and measuring their effectiveness? What are institutions looking for in their hundreds of millions of dollars invested in data warehouses? Is the return on investment sufficient?

The definitions of success and return-rate calculations appear murky at best.

Data warehouses have become sacred cows, and questioning the sums to be lavished on them is sacrilege. But as prudent managers we need to be sure that the investment is made wisely and will bring shareholders reasonable returns.

It seems wise to make some critical decisions early on. Determine how data base capabilities are to be delivered to the line and to points of customer contact and how they are to be used, before the enormous machinery and infrastructures are built.

I have not found many institutions that have clear answers to such questions.

At Wells Fargo we have the data warehouse at every point of customer contact. It is designed to enable the sales force to be instantaneously knowledgeable about customers' entire relationships with our company, their other financial relationships, and their propensity to buy other products and services.

The purpose of the warehouse is clear: to get more quality, needs-based sales out of the sales forces, and to improve customer contacts.

We need clarity of vision about data warehousing before pouring money into it. Do you measure how much sales have increased due to the incremental investment in the warehouse? Or what kind of improvement in direct-mail response rates has been achieved?

Similarly, answering questions about how the information tools are to be delivered, used, and disseminated would be helpful up front in order to ensure that the investment is well made and achieves its purpose.

Data warehouses are an essential competitive tool, but this does not make them immune from the setting of goals and measuring of post-installation returns on investment.

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