When David T. Aldridge took the chief technology officer job at Union Planters Corp. during the last week of August 2001, he was a client/server guy walking into a mainframe environment.
Mr. Aldridge, who had spent his earlier career at Bank One Corp. in Columbus, Ohio, and Midlantic Banks Inc. in Edison, N.J. (which was later purchased by PNC Financial Corp.), had most recently been serving as the chief information officer at Home Shopping Network in St. Petersburg, Fla., where he picked up a few ideas outside of banking orthodoxy.
While Memphis-based Union Planters had been running its systems on mainframes only, Mr. Aldridge, who also holds the title of senior vice president, stepped in and hired about 50 people with track records in client/server, a method of computing that distributes processing power over both PCs and servers.
"As a company, we're undergoing a period of transformation from mainframes to a hybrid of mainframes and client/server," Mr. Aldridge said in a recent telephone interview. "There are gaps we need to fill in terms of newer skill sets."
The client/server model, which began gaining favor at banks in the mid- to late-1990s, gives greater control to end users, but is like a foreign language to programmers who have worked on mainframes their whole careers. Mr. Aldridge said that it has been high on his agenda this past year to infuse greater skills in client/server computing into the bank's technology group.
Blending the two groups of workers, each with essential but very different talents and cultures, has been "intensely challenging," Mr. Aldridge said. The new hires have brought the total number of information technology workers at Union Planters to about 360. By shifting people into jobs that matched their skill sets, the bank managed to gain client/server expertise without any layoffs, Mr. Aldridge said.
To fuse the two groups, Mr. Aldridge said he held several "visionary sessions" to get "buy-in on what kind of organization" employees wanted to be part of.
Another important step in the team building was deciding upon several key business goals - such as staff development, tactical objectives, strategic issues, and risk management - and communicating them widely. Each of the agenda items included a list of 10 to 20 systems objectives - such as change management, audit performance, and business recovery - with an owner assigned to each.
"We're all working from the same view of what we want to accomplish," Mr. Aldridge said, adding that the high level of communication is new for information technology employees who are accustomed to burrowing in on specific systems issues.
Union Planters' move to organize the technology group around both business and tech objectives is emblematic of an industry-wide trend. With technology becoming a more pervasive underpinning to business, it has become harder to separate the two. International Business Machines Corp., for example, has acknowledged the co-mingling of business and technology in a new marketing campaign designed to appeal to executives of both groups.
"Building an effective team and interfacing with the business partners are the critical success factors," Mr. Aldridge said.
During his time at Home Shopping Network - which Mr. Aldridge refers to as his "sojourn out of banking" - he was heavily involved in the television retail company's call center activities. "HSN was a real-time, high-transaction environment with a large call center capability and high volumes," he said. While the analagous operation at Union Planters is less intense, Mr. Aldridge has tried to use his expertise in the area to make improvements. One move this year was to install call center management software from Interactive Intelligence Inc. of Indianapolis.
Beyond building his team and communicating its goals, Mr. Aldridge has been charged with the supervision of the technology group's involvement in a bank-wide efficiency drive known as UPExcel. Announced last summer just a few weeks before Mr. Aldridge's arrival, the program is intended to boost earnings through back-room consolidations, office automation, and expense control.
Of 800 ideas that Union Planters came up with for improving efficiency throughout the bank, the information technology group is responsible for executing just under 200. So far, the bank has undertaken or completed seven major systems implementations, all of them aimed at improving efficiency, customer service, and sales effectiveness. These include the installation of PeopleSoft software for financial accounting, human resources and payroll processing; of front-end loan software from Alltel; and of the call center sofware from Interactive Intelligence.
Union Planters also has consolidated two mortgage processing centers into one, and five consumer and business loan processing centers into two. And it has sold or closed more than 100 branches as part of a rationalization project announced at the same time as UPExcel.
Last year, Union Planters said that UPExcel and the branch closings would improve earnings by $85 million to $100 million annually through revenue enhancements of $25 million to $30 million and productivity enhancements of $40 million to $45 million. The bank expects to realize the full impact of UPExcel by 2003.
Charles Boyce, a spokesman for Union Planters, said that the bank is on track to achieve those results. He also said that the bank has reduced its head count of full-time employees by about 1,000 since June 30 of last year, mainly through back-office consolidations and branch closings.
In its second-quarter earnings release, Union Planters said that non-interest expense had decreased during the quarter by 11.9% to $272.3 million and that "core operating expenses fell dramatically as management implemented UPExcel initiatives." It also listed UPExcel project expenses of $1.3 million.
