When new technology winds up mimicking old ways of doing things, it's not always a negative. Consider, for instance, Comerica Inc.'s Gateway messaging system; after an intense, three-year effort, they've succeeded in re-creating, via computer, the days when all mailmen picked up and delivered your mail at the same time.
The $36 billion-asset, Detroit-based Comerica created a product that allows its corporate customers to both send to and receive from the regional bank a large variety of treasury management transaction messages, including S.W.I.F.T. and FedWire messages, letters of credit applications, automated clearing house operations and getting general account information. By doing so, Comerica has managed to both build its treasury management book and boost the area's profitability. "You tend to be able to sell (customers) more" services for "about 25 percent cheaper" than under the old system, says Bruce Valentine, Comerica's first vp for corporate product development.
Comerica created Gateway with Arlington, VA-based American Management Systems (AMS), beginning in 1994, to keep up with its customers, says Valentine."Our customers were offering Windows-based systems, and we didn't have (one)," he says, and the bank wanted to be able to match its own systems with theirs. Previously, the bank-to- customer communications system was a DOS-based process in which each department of the bank communicated separately with its customers, with no central control point. "You wound up with seven different pieces of software on the customer's desk," he says.
Now, says Valentine, the bank offers one-stop shopping on the computer for the corporate client, replacing the legacy systems with a structure that essentially re-created the bank's messaging system.
A software agent is attached to each information silo in the bank, which interrogates its batch file system, inquiring after new, customer-specific messages. It extracts the message, sends it to the gateway, which operates as the message switch, while, at the same time, the system is searching the client for messages and delivering them to the right bank department.
Comerica turned to AMS because it already had a working relationship, says Valentine. "We looked around at some of the Windows-based things, (but) we already used AMS for some other stuff, so we started brainstorming with them, and the light bulb just came on," he says. The result was a cheaper system for Comerica, and new business for AMS. "They developed this to market it, and we happened to be the first customer," he says. "They were not working on it when we started talking, and we did not ask for exclusivityowhen you do that, your price starts to go up."
Instead, says Valentine, AMS gave them a price break on the sale. He says the bank's system cost about 50 percent of AMS's development costs.
Building the system took about nine months. Valentine had three people working on the projectohimself and two product developersowho concentrated on system functionality, while AMS did the programming. The AMS team totalled about 15 persons. The system went through 20 iterations before Valentine and his group were satisfied. "This was like doing pure science out of the box," he says. "There were no models that existed, so we literally had to work our way through it."
Complicating things: AMS was using prefab computer code for its building blocks, and as they worked, the vendor kept producing new versions with more features that Valentine and his team felt they had to have. The result was "mission creep" and yet more iterations.
When the system was complete, the "shakedown" cruise took quite some time. "It took about two years before we started rolling customers into the system" says Valentine because of the need to attach custom-built messaging agents to each business silo.
In early 1995, a Beta customer, Medline Corp.oa large medical supplier based in Mundelein, ILoofficially signed up; Comerica now has about 100 Gateway customers, not all of them big companies like Medline. "The business case was built on a premise of (attracting) 50 of our largest customers," says Valentine, "but we quickly realized when we started building this that computers and software were moving downstream very rapidly, so our sights changed about half-way through the project to include most of the middle market."