PORTLAND, Ore. -- As part of a sweeping overhaul of its information systems, U.S. Bancorp is involved in a reengineering effort that could vastly simplify the addition of new technologies.

The $20.7 billion-asset holding company created two groups, one to reengineer business practices and another to develop and implement standards for office systems.

The two groups are reviewing the hardware, software, and process requirements of the bank's business lines, and will suggest changes designed to improve the flow of work and information within them. That process should be completed next year.

A Big Commitment

U.S. Bancorp is in a period of substantial technological investment. It is installing a version of the Strategic Banking System, core banking software developed by Electronic Data Systems, Banc One Corp., and Norwest Corp. Its version of the software will operate on so-called fault-tolerant computers from Tandem Computers Inc.

In addition, the bank is creating a high-capacity communications network among its 450 branches. This network will have the capability to carry voice, data, image, and video traffic. The bank also is upgrading its personal computers.

Prior to this current push, "we weren't necessarily getting the return on investment from technology that we would have liked," said Tim Hogan, manager of the bank's business process reengineering group.

Said Steve Casey, manager of office technology: "The work of the two groups will dovetail with the branch banking portion of SBS."

Redesigning Workflows

As work on the software and the infrastructure upgrade continues within the bank, the business process group is reviewing practices and procedures within the bank's mortgage lending, commercial lending, consumer lending, platform automation, and trust departments.

Working with managers from these groups, the business process reengineering group will redesign workflows and decide what types of technologies need to be put in place.

"Technology applied to re-invented business processes give you the greatest payback," said Mr. Hogan. He said the decisions with which his group is involved use business processes and human resources, as well as technology, as criteria.

An |Enterprise Solution'

High on the technology list is imaging, "We're looking for an enterprise solution for imaging," said Mr. Casey. "We'll do anything to reduce the amount of money spent on paper and handling paper."

That search prompted the bank to install the high-capacity network, in order to handle the heavy traffic created by the movement of image data.

The bank currently has one imaging application in place.

Drop in Cost Seen

Mr. Hogan said the cost of implementing imaging will drop dramatically within the next several months. The decrease, he said, will be prompted by the release of new software from FileNet Corp., Costa Mesa, Calif., a leading imaging vendor.

That software will be packaged for mass-market applications, much like word processors or spreadsheets. It will make the bank's new PCs imaging-ready without the need to create custom applications.

"It's probably an overstatement to say the price will drop dramatically. But there will be a gradual decrease as the pieces come together over the next year or so," said Jordan Libit, vice president of marketing for FileNet. He added that the price of his company's imaging software could decrease to $1000 per seat during 1994.

Risks and Rewards

"Practically every large bank has one or two imaging projects under way, in order to work out the kinks and reengineer the workflows," said Greg Schmergel, a consultant with the Tower Group, Dover, Mass.

To undertake a corporate imaging strategy, Mr. Schmergel said, "is a high-risk, high-reward project.

"It simplifies compatibility and training issues, but any problems can snowball throughout an entire organization."

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