Mellon Bank Corp. is revamping its software development department, in recognition of its increasing importance in the overall workings of the company.

The Pittsburgh-based bank is creating and implementing companywide software development methodologies designed to improve responsiveness to business requirements-from disaster recovery to new product development.

In a move related to the upgrade, Mellon has appointed Kevin L. Shearan, a former director of technology for Citicorp, to lead a newly created software engineering development group.

Mellon has also hired Electronic Data Systems Corp. as a consultant. Over the next 40 months, EDS will bring the bank in line with the Software Engineering Institute/ Capability Maturity Model, or SEI/CMM, standards, said Michael Littell, president of EDS' U.S. banking division.

"EDS will assist us in identifying 'best practices' within our organization and assist us in spreading them," Mr. Shearan said. "They can assist us in quickly implementing these changes."

Already regarded as one of banking's technological leaders, Mellon is only strengthening its position with the upgrade, analysts said. Clients are increasingly judging banks on their technology, they added.

"Technology will be more of a differentiation factor in the ability to compete," said Joseph C. Duwan, senior vice president of Keefe, Bruyette & Woods Inc. in New York.

Mellon officials said they hope the upgrade will allow them to create better products and get them to market faster. "One of the key criteria for success in the new millennium will be an organization's ability to deliver software in an accelerated-time-to-market mode," said Allan P. Woods, executive vice president, Mellon Information Services.

Mellon, with $44 billion of assets, is not consolidating its software department. Developers will remain dispersed among the lines of business so they can be closer to customers and their needs, said Mr. Woods.

The upgrade is aimed at establishing uniform practices for all software developers to follow. Areas of focus include the process of writing computer code, the structure of the department, the measurement of success, and the workplace environment.

Once the new practices are identified, Mr. Shearan will oversee their implementation and enforcement. His duties also include recruitment, training and development, and performance reward systems.

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