To the Editor:
In the June 16 article on Citibank's software arrangement with the Sanchez Computer Associates ("Software Deal May Signal End of Citi's Mainframes," page 1), there is an allegation about the obsolescence of mainframe computers and positive comments about distributed architecture.
My expertise is cost accounting. I have managed cost studies of numerous distributed and mainframe systems for a number of current (and former) superregional banks. Mainframe systems are always more cost-efficient than systems relying on client-server architecture. Not slightly more cost- effective but significantly-two to three times - more cost-effective.
I have informally run this finding by peers and consultants who specialize in the financial aspects of data processing, and they unanimously say their experience supports this conclusion.
Given that mainframe architecture is significantly more economical than other processing arrangements, perhaps someone could help me understand why mainframes are so often labeled obsolete by chief information officers and the press.
Over many years in banking, I have heard lots of complaining about the phenomenally increasing cost of technology but never any discussion about the comparative cost of technologies. Chief information officers, as a group, appear to be either unaware of this cost differential or unwilling to disclose it to management.
When cost accounting professionals are asked to comment on the financial aspects of major technical investments, we are usually asked after the investments have been made and find that there was either no cost analysis, or a very flawed one, prior to the decision.
I have not been asked to comment on this issue by my current employer, but as an investor in various bank stocks I'd prefer that management pay as much attention to the cost-effectiveness of the technology as to whether or not it is "cutting edge."
As the migration from mainframes seems to be an undeniable trend, I believe that it would be a valuable service to promote a dialogue on the installation and ongoing maintenance costs of the two technologies.
Ms. Smith retired June 30 as vice president of Bank One Management Corp., where she oversaw cost accounting functions including those of Bank One Service Corp., the company's technology subsidiary.