The first version of deposit accounting software developed by Electronic Data Systems Corp. and two superregional banks, part of an ambitious retail banking system, is being revamped after its performance was less than had been hoped.

The deposit software is part of the Strategic Banking System, or SBS, a joint development project of EDS, Banc One Corp., and Norwest Corp. to provide retail banks with advanced systems that will make it easy to market products to customers and that can process large volumes of data.

The closely watched project thus far has cost an estimated $125 million and has been seven years in the making.

EDS is addressing several issues, including slow performance when the system handles high volumes of data.

EDS also is adding new functions. The bankers involved in the project say that their requirements have outstripped the original specifications.

The release "was an intermediate milestone," said Don Flores, divisions vice president with responsibility for core systems offerings at EDS. "Both banks have grown the size of their organizations and entered some markets they weren't in before, and we've got to add those into the product."

Keeping Options Open

Norwest said the problems with the deposit system are normal in a major development effort, and not serious enough to cause the bank to rethink installing the software, now scheduled to be delivered in mid-1994.

But Norwest officials are reportedly keeping their options open.

The company recently invited another vendor in to see a demonstration of a competing deposit system, according to a source close to the bank.

"We have been following all the vendors of deposit systems, just to keep up," said Brian Phillips, president of Norwest Technical Services, the company's processing arm.

Mr. Phillips said that the bank is reserving judgment on purchasing the deposit software until EDS completes it, but that "theoretically, it is not our intent" to purchase software from another vendor.

Seeking Enhancements

Norwest tested the deposit software from EDS for about four months, installing it in all the branches in one state, and several branches in other states, processing "very high volumes." Mr. Phillips declined to specify the location of the branches. The test ended in March.

"Performance is one of the things we identified," said Mr. Phillips. "EDS is addressing that issue."

A technology consultant following the megaproject agreed. The deposits module "has been released by EDS, but is not considered to have enough functionality for banking in the '90s," said William Bradway, a consultant with the Tower Group, a bank consulting firm based in Cambridge, Mass., in a recently published research report.

But he also wrote that "EDS is committed to deliver a significantly enhanced deposits module in early 1994 to both Norwest and Banc One."

Customer System in Place

The software, which processes retail deposit accounts and most commercial deposit accounts, cannot be installed without the system's customer-information module already being in place.

Both Banc One and Norwest already have installed the core customer portion of the system.

The customer system can be used with the deposit system under development, or, theoretically, with software from other vendors.

The customer system uses two data base management systems: international Business Machines Corp.'s IMS software for high-volume production tasks. and IBM's DB2 relational data base for management reports.

Until recently, Banc One and Norwest had pursued different strategies, with Banc One using the customer module only in a few pilot branches, and Norwest rolling the module out bankwide.

But this year, Banc One changed course and also is installing the customer system in all its banks.

Norwest installed the customer system in 199 1, and has installed it to serve over 95% of its subsidiary banks.

Despite Norwest's wait-and-see stance, Mr. Phillips said the bank helped EDS sell the SBS system to U.S. Bancorp, based in Portland, Ore.

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