Two years ago, Dime Bancorp decided to halt further investment in mainframe computing. Instead, the New York-based bank-holding company would pursue a client/server computing strategy to be carried out gradually. Following its acquisition in January of Anchor Bancorp, the Dime which now has $20 billion of assets and operates the fourth-largest retail banking business in its marketplace will continue that approach. First, though, it must convert the disparate data processing environments of the two organizations into a coherent whole, a project scheduled for completion by yearend. Currently, Dime is operating both environments, with staff from the former Anchor managing the systems in place before the merger. Once the conversion is complete, Dime will begin developing its largest and most ambitious client/server implementation: an enterprise-wide data warehouse that will reside on Unix-based multi-processing servers from AT&T Global Information Solutions. Before the merger, Dime had built an Oracle data warehouse on a Teradata platform from NCR, which has since been acquired by AT&T. While the conversion is taking place, Dime will temporarily operate a data warehouse in the IBM DB2 environment. The new warehouse, to be built on an Oracle relational database, will consolidate strategic data and make it more accessible and usable throughout the bank. The project fits in snugly with the Dime's overall client/server strategy, says Kevin McLaughlin, director of technology. We want to reduce reliance on a centralized (information technology) programming environment for information delivery, he said. Armed with personal computers and graphical software tools, high-end users will be able both to get the information they need from the warehouse, as well as perform sophisticated manipulation of it. As Mr. McLaughlin explains, It will be up to the users to determine their information requirements and develop the appropriate queries to get it. One challenge confronting Mr. McLaughlin is to structure the warehouse so that struggles over the ownership of the data do not occur. We do not want one individual business unit within the organization to own the data, he explained, adding that since so much of the data is financial in nature, bank controllers naturally may tend to assert ownership rights. It is not unusual for such power struggles to flare up when organizations deploy client/server technologies, claims Michael Schrage, a research associate at the MIT Sloan School of Management. Client/server technology is about power and control, he says. Anytime you install technology that is capable of redistributing information, power, and control, you will have political and cultural problems. Those problems could potentially be exacerbated by the incorporation of a new organization into the Dime. However, Mr. McLaughlin maintains that 18 integration teams, formed along lines of business and made up of employees from both Anchor and Dime, will overcome such challenges. Before it can build its data repository, Dime has to complete its conversion. Rather than attempt to blend the disparate environments of each institution, the Dime has chosen a third alternative for its retail banking core processing. And, it will stick with a mainframe to provide processing muscle, reliability, and security. Given our large volumes, and the relative immaturity of alternative hardware, the mainframe will continue to provide a role for our retail- transaction processing, says McLaughlin. In addition, because of the size of its mortgage-loan portfolio about 180,000 loans the mainframe also will continue to perform mortgage-loan servicing. Under a facilities management arrangement, Alltel Information Services, formerly Systematics, will run a mainframe-based retail banking system for Dime on hardware from International Business Machines Corp. The former Anchor is currently operating an IBM mainframe-based, home- grown system under a facilities-management arrangement with Alltel. Until the conversion is completed, Dime is continuing to run an integrated banking system on its Unisys mainframe. Dime will retain Anchor's in-house licensing agreement with Computer Power Inc. for mortgage-loan servicing, but Alltel will run it under the facilities-management arrangement. Its deposit-side branch automation, from MicroBilt Corp., will continue to be run by Dime. The conversion also calls for Dime to replace the dumb terminals currently in the former Anchor branches with PCs. Each of the 94 branches of the merged bank will operate on local-area networks connected to a wide-area network that feeds the mainframe. Although Dime's deposit-automation system runs locally on PCs supported by branch file servers that can operate without connectivity to the mainframe, Mr. McLaughlin hesitates to call this setup true client/server computing, since the application does connect to the mainframe for updating purposes. Other applications Dime had installed before the merger are the genuine article, though, and will be expanded throughout the merged bank. These client/server applications include a Unix-based asset/liability management system from Treasury Services Corp. Dime is upgrading the system to a Windows-based version with an Oracle database. Also to be provided in the upgrade are systems for line-of-business profitability reporting and funds-transfer pricing. So far, the system has allowed users to gain access to a wider breadth of information and to perform sophisticated modeling without having to turn to IT programmers. Another client/server system that has delivered benefits is an order entry and commission tracking system used by financial consultants in the bank's investment services business. The system runs on AT&T multiprocessing servers and employs an Oracle database. The system has significantly improved compliance tracking, bank executives said. And, because it provides direct access to on-line quotes, it permits financial risk modeling, and allows for graphic interaction with customers. The system also has boosted consultants' productivity. Although client/server systems such as these deliver benefits to an elite group of so-called power users, client/server computing can improve productivity among other users such as clerical staff as well, says Mr. McLaughlin. The bank's Unix-based mortgage-origination system, for example, has allowed Dime to reduce the time it takes to process a mortgage from 60 days to about 20. Part of this productivity boost has been achieved through the ability to reengineer workflows. The system, which will be expanded to include about 160 users, also speeds product development and aids in marketing. The Dime also will expand its client/server payroll system in the merged organization, and will build a new core general ledger processing system based on client/server architecture. To support the larger, merged institution, Dime has requested software enhancements to its current client/server applications. Delivery of such requests is much speedier than in the mainframe software arena, says Mr. McLaughlin. IT staff from Anchor will not be trained in the operation of Dime's client/server systems until after the conversion is completed. Mr. McLaughlin concedes that there could be a steep learning curve, since Anchor had not been pursuing a client/server strategy before the merger. Non-IT end users will require extensive training. Once the conversion is complete, the Dime will resume its exploration of new applications based on client/server architecture. But it will deploy the technology only if it fulfills a specific business need. Its IT approach, McLaughlin notes proudly, has helped position the Dime to compete successfully against the 'Big C's. ' He doesn't think he has to spell out the names of his cross-town competitors.
Ms. O'Heney is a freelance writer based in New York.