The Rise and Fall of the Technology Czar

George P. DiNardo has plenty of time to work on his golf game these days. Since abruptly resigning in January as the top technology officer at Mellon Bank Corp., the 53-year-old executive spends a lot of time on the links, thinking about what he wants to do next.

Bipin C. Shah built CoreStates Financial Corp.'s processing businesses into big moneymakers. But three months ago, after a dispute over the company's direction, he quit as chief operating officer. Like his counterpart at Mellon, Mr. Shah, 52, doesn't see many opportunities in banking.

A Growing Club

The two executives are members of a growing club of bank technology czars in exile. The departures mark the end of an era.

Throughout the 1980s, technology managers were banking's rising stars. Chief executives, facing the monumental task of automating branches and back offices, relied increasingly on these experts to make strategic decisions and develop multi-million-dollar systems. The broader power brought top titles and big paychecks.

But now, with much of the buildup completed and with budgets being squeezed, the top systems spot has become a hot seat.

Senior bank executives are much more reluctant to spend millions on computers without guarantees of prompt paybacks.

Furthermore, many banks are moving away from centralized operations management, giving more control to individual units and less to the top systems manager.

Change in Direction

"A lot of information systems people centralized everything," said Jack L. Hancock, executive vice president at Pacific Bell and formerly the technology chief at Wells, Fargo & Co. But now "the direction of technology in business is toward decentralization. Either the head of information systems will be gone within the next year and a half, or they will begin to change."

Also, an increasing number of banks are hiring outside data processing companies to handle their operations.

These factors have taken some of the luster off the jobs and led to the departures of some of the top technology stars of the 1980s. Other executives who have left recently include: DuWayne Peterson, who left Security Pacific Corp. for Merrill Lynch and recently retired, and Paul Glaser, who moved within Citicorp to take over the Quotron unit, another recent retiree.

An Abrupt Departure

Mr. Shah's resignation from CoreStates was abrupt, but not completely unexpected. Considered by some the ablest operations executive in the industry, his views clashed with those of chairman Terrence A. Larsen.

Mr. Shah, then chief operating officer, wanted to expand the bank's fee-based businesses, which have bolstered the bank's image on Wall Street. But Mr. Larsen favored more emphasis on traditional banking, which requires less up-front investment in technology. Observers said it was clear one man had to go.

"I like banking," said Mr. Shah. "But banking management only knows how to make money traditionally. They don't know how to create new products and services that generate enormous incomes. I think differently than they do."

No More Big Systems

At Mellon, Mr. DiNardo built one of banking's biggest technology departments during the 1980s.

When he left, however, economic constraints had ended the era of big systems building, Mr. DiNardo's specialty, said vice chairman Richard A. Gaugh.

Mr. DiNardo, a 21-year Mellon veteran, said his job was not the same after he reassigned all the computer programmers to the business units, a decentralization project that gutted his empire.

He said that quitting has given him a chance to do something different - "one last hurrah."

Top banking technologists typically entertain plenty of job offers. "I had a lot of opportunities when I said I was leaving," said Mr. Hancock. His would-be retirement ended when Pacific Bell offered him a top technology position. The phone company wanted the kind of systems experience a top banking technologist has.

Price Tags Too Hefty

Some recruiters, however, say the top technologists, who earn $200,000 or more, often price themselves out of the market. "Their talent, experience, and expertise are in great demand in smaller organizations," said W. Richard Howard, a managing vice president at executive recruiter Korn/Ferry International. "But those companies probably couldn't afford them at the compensation ranges they are used to."

Now, both Mr. DiNardo and Mr. Shah say their first choice for a second career is to run their own companies.

Since he resigned, Mr. DiNardo has done a little consulting, lined up a venture capitalist to buy a data processing business, and teaches a couple of days a week at nearby Carnegie-Mellon University. So there's plenty of time for golf - and worry, which tends to guide fairway shots into the shrubbery.

His Mood Fluctuates

"This is the grandest thing I've ever done," said Mr. DiNardo. He admits his mood could change tomorrow, and he diagnoses himself as having cyclical euphoria.

Right now, Mr. DiNardo is not worried about landing a job. Against the odds, Mr. DiNardo said he found a venture capitalist to back his first choice: buying and running a small computer-intensive service company, with a price tag of about $25 million.

He has other projects under way. Mr. DiNardo is working with Andersen Consulting to develop a computer system to monitor the telecommunication networks of big companies.

Hard-Driving Personality

His abrupt retirement has fostered self-doubt, no doubt a first for the table-pounding executive.

"I'm nervous about running a company," admits Mr. DiNardo. "I know I could do a banking technology job. That's why this is difficult for me. That's where the emotional trauma is."

Mr. Shah, also known for his hard-driving personality, is more sanguine about his prospects. He said two decades of high-power work have left him with enough financial cushion to be choosey about his next position. If he goes to work for a banking company or another corporation, he won't accept a job that limits him to running data processing.

"I can go in either direction - running a technology company as the No. 1 or No. 2 man, or go into the banking industry," said Mr. Shah. He is also exploring the possibility of buying into a business. Colleagues believe he is best employed as a turn-around artist.

But Mr. Shah has not made up his mind. He said he has already turned down two job offers.

A Quest for Chemistry

"I'm looking more for a chemistry now, than for a job," he said. "If the chemistry isn't there, it won't be fun." Part of that chemistry, said Mr. Shah, is an agreement on a long-term strategy.

Mr. Shah was not only a tough boss, but a demanding subordinate who didn't back down. Mr. Shah joined CoreStates in 1980 from American Express, where he ran the credit-card division.

At the Philadelphia bank, he cleaned up a mediocre data processing operation. He attracted some talented people and trained them. He went on to develop two highly profitable processing business, one for automated teller machines, called the MAC network, and one for merchant payments.

When he left, he oversaw those businesses, along with consumer markets, trust accounting, and credit-card processing - an odd mix of businesses that reflects his considerable abilities.

Role Seen as Critical

CoreStates plays down Mr. Shah's contribution, pointing out that another executive, Douglas Anderson, actually began the MAC and the merchant payment businesses. But outside observers consider Mr. Shah's role pivotal.

"Those businesses would be nowhere without him," said a long-time observer of the bank. "That's why he lasted so long."

He is not out of ideas. For example, Mr. Shah believes banks can play a payment role between the medical establishment and insurance companies.

"I'm 52 years old," said Mr. Shah. "I just want one more big job."

PHOTO : TIME FOR GOLF: George P. DiNardo sees little opportunity in the technology end of banking.

PHOTO : JACK HANCOCK: Sees movement toward decentralization.

PHOTO : BIPIN C. SHAH: Left after clash of views with chairman.

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