IBM's Nielsen Can Take Bow When Image System Hatches

When IBM tapped Louise Nielsen in July to take over an image system project fraught with problems and delays, its credibility among banking customers was at a low point.

Confidence is slowly but steadily reviving in the bank technology strategy of International Business Machines Corp., thanks in part to Ms. Nielsen's aggressive efforts to pull the project together.

Turning a Corner

In the next few months, IBM is poised to deliver a portion of the image system for check operations that it promised bankers more than two years ago.

"She's been able to pull together an excellent team, get some priorities changed, and get the right management attention," said one banker who has worked closely with IBM to install a check image system. "She's set realistic and viable time frames."

The project turned a corner a few weeks ago. IBM announced then that several key pieces of the system -- software for producing statements with check images and controlling the capture and storage of images -- will be available in March.

Ms. Nielsen says the company will have 75% of the image software available to banks by spring '92.

Mix of Toughness and Directness

Bankers are anxious to install systems that convert paper checks into electronic images that are processed and stored; elimination of paper can dramatically cut costs in check operations.

IBM's system has been delayed more than a year by technical complexities and, according to sources, lack of coordination among various internal and external software developers.

Ms. Nielsen, an 18-year IBM veteran, holds a doctorate in information science/satellite communications.

Earlier, she was corporate director for systems and software education at IBM and director of the group that designed primary software architecture for the entire line of IBM computers -- from desktops to mainframes.

She drew her current assignment, sources close to the bank technology project said, because she is tough, direct, and more aggressive and demanding than her predecessor.

"Some aspects of the system are very straightforward conceptually," Ms. Nielsen said in a recent interview. "But all the aspects of what it takes to deliver a total system are not as straightforward. Bankers' requirements change, and new ones emerge that were unstated before."

Development Pace Gaining Speed

The delays and technical roadblocks are part of a "normal development process," Ms. Nielsen said. "I don't see them as hurdles."

Still, she has taken several steps to accelerate the pace of development and reassure fidgety customers who are waiting for the system to be delivered. The project has been centralized at Charlotte, N.C., and coordinated more effectively with external developers such as Check Solutions, a joint venture with First Tennessee National Corp., Memphis.

Sources say she has also brought in strong managers she learned to trust while working with them on other system software projects.

"She's bringing a different management perspective to the project, and she's bringing experience and talent," said a banker who requested anonymity.

Improvements at Corporate Level

Big changes within IBM will also benefit the image project. A restructuring has shifted the marketing group for traditional and image-based check processing systems to the services-sector division, away from Ms. Nielsen's group. And all development groups, including Ms. Nielsen's unit, are being consolidated under a single executive.

Still, IBM has a distance to travel before it can regain total confidence of banking customers. Still under development is a key element of the image system, the so-called proof of deposit application. This will allow significant reductions in the labor cost of banks' check operations, but no delivery date has been announced.

"If anyone can pull it off, she can," said an image systems customer at a mutual fund company that evaluated the IBM system. "She has that kind of reputation."

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