In 2008, at the respective San Francisco and Charlotte, N.C., headquarters of two financial-industry giants, HR staffers tapped into their networks to administer benefits and process promotions for employees. IT departments collaborated on the enterprise to develop new business platforms.
Employees overseeing more than 12,000 ATMs nationwide depended on these networks to find out which machines were running and which were down. In Des Moines and other communities where mortgage teams thrived, executives used the networks to generate new loans and satisfy the white-hot demand to refinance homes, given a dramatic drop in the 30-year lending rate.
Then, on Dec. 31, these two institutions announced a merger, as Wells Fargo & Co. completed its acquisition of Wachovia, making it the second-largest bank in the United States, with nearly 300,000 employees.
From an IT perspective, that meant a major network integration was needed to bring it all together. That was the job facing Martin Davis, now head of the technology integration program office for San Francisco-based
Wells Fargo & Co. With more than 23 years of experience in technology management, Davis was serving as Wachovia’s CIO in Charlotte at the time of the acquisition, and he immediately segued into his current role.
For any executive taking on such an assignment, the challenges can be formidable. But financial institutions are nothing without their technology, says Paul Kanneman, the advisory practice leader overseeing IT and business integration for Grant Thornton LLP, a Chicago-based consultancy. They have their brands, but those brands are delivered by the IT structure.
When two giant institutions merge, they need to think about more than just the financial cultures coming together. They need to think about the technology cultures, too. What if one company maintains a very decentralized approach—in which each individual business unit comes up with its own IT acquisition and operational policies—and the other uses a centralized approach whereby the CIO makes all the decisions? This can impact everything, from how funding is authorized to how IT is used. If you don’t think about these things in advance, there will be a lot of angst down the road.
Fortunately, Davis quickly realized that the new corporate parent was tech-savvy: In fact, Wells Fargo was the first financial services firm to offer banking services online—as early as 1995.
Baseline spoke to Davis to find out more about the integration effort, which is still a work in progress. Here’s what he had to say.
Baseline: What were you doing before the acquisition?
Martin Davis: I was always with Wachovia. I started out as a programmer in Winston-Salem in 1984 and progressed from there. Back then, it was all about mainframes and IMS database systems. I moved to Charlotte in 2001 to help oversee the Wachovia/First Union merger.
How complex was that?
Davis: It was a huge undertaking. No two mergers and acquisitions are ever alike. But the strategy behind them is always consistent. We seek out the best of the platforms that already exist, analyze all of them and find out which ones have the best scalability.
The First Union merger allowed Wachovia to grow to three times its size, so that was a top priority. We didn’t want our customers to ever not be able to complete a transaction—or even to notice that there was a merger going on.