Deutsche Bank's Integration WoesBy Larry Barrett | Posted 2002-09-16 Email Print
Is a company's biggest asset really its people? Deutsche Bank didn't act that way after it bought underwriter BT Alex. Brown.
BT Alex. Brown's information systems staff expected some difficulties when Deutsche Bank bought the company for $10 billion in June 1999. They all knew there's no such thing as a seamless merger, especially if you're working for the company being acquired.
But Alex. Brown's cachet didn't do much for the technology managers who were fretting about their future in early 1999. And since that time, Alex. Brown's information technology staff has basically been "obliterated," in the words of one former managerreplaced by Deutsche Bank employees. Only a handful of the original applications developed in-house at Alex. Brown are still being used at its equities trading group, staffers say.
What was billed as a cooperative integrationno easy task, even in the best of circumstancesturned into a humbling reminder of the inevitability of big-company politics for those on the BT Alex. Brown side.
While some of the principals at both BT Alex. Brown and Deutsche Bank say the outright ego-trampling and disorganization in the year following the merger is over, it's clear the disharmony that arose still exists.
This became apparent in April when a group of 400 Alex. Brown brokers demanded Deutsche Bank retain the Alex. Brown name in its brokerage operations and investment banking in the U.S. Until it finally relented, Deutsche Bank was determined to rename the firm Deutsche Bank Securities, eliminating a brand that had existed for more than 200 years.
Audrey Allopenna, who served as global head of investment banking for information technology at BT Alex. Brownand was the company's chief information officer at the time of the mergersays it became clear early in the process that Deutsche Bank managers were making all the decisions. This was especially frustrating, she says, since they had led the BT Alex. Brown team to believe that technology applications would be assessed based strictly on merit.
Deutsche Bank "paid a lot of lip service to the notion of choosing applications based on what was best for the combined company," says Allopenna, who left the bank last year to spend more time with her family. "There was a lot of bureaucracy and politics."
Indeed, the initial discussions over technology prod uced a kind of stalemate. A year after the merger went through, BT Alex. Brown employees were still using Microsoft Exchange or Outlook for internal and external communications while the Deutsche Bank staff was still using Lotus Notes.
"There was a lot of talk about making the switch to one or the other but it never happened," says Allopenna. "The idea was to make sure the systems were in compliance with SEC regulations on Day One, and then later to work on our integration strategy. But it was extremely difficult to get people to work together and get everyone on the same page."