Lessons from Wells Fargo: Five Steps to More Integrated Internet Services

Loraine Lawson

Two years: That's how long Wells Fargo has been working on the merger and integration of Wachovia, which it purchased Dec. 31, 2008.


IT Business Edge's Ann All recently got the scoop on how that work is going from George Tumas, who oversees Well Fargo's Internet Services Group. Now, Tumas is speaking primarily from one perspective-the Internet Services Group-but, frankly, I think that group's experience offers valuable lessons to organizations beyond those undergoing mergers and acquisitions and is worth reading.


That's because he doesn't just talk about how IT managed the merger and acquisition-though he does give an overview of Wells Fargo's overall strategic map. Instead, what he does discuss at length is how the Internet Services Group approached its integration work, and in particular, how the group worked with the business, customers and other divisions of IT to circumvent potential problems.


Sadly, this is one area where many companies fall short. A 2008 survey of online shoppers found that nine out of 10 U.S. Web users say they've had difficulties with online shopping, 41 percent abandoned the transaction when problems occurred and nearly two in five did not have their problems resolved after calling customer service.


A similar study in the UK revealed poor integration between contact centers and Web stores, too. When customers called customer service, nearly two in five-or 38 percent-did not have their issue resolved.


Tumas' group took five smart steps that ensured a smooth integration and an improved online experience for customers.


First, IT as a whole used predictive analytics that were obtained during the month of the merger to determine whether existing systems-including mainframes, middleware and so forth-could support the added traffic. They even examined Wachovia's statistics. They assessed costs, scalability, flexibility and other factors to determine what would stay, what needed improvements and what had to go. This formed the foundation for their plans moving forward. Sure, they were doing it because of a merger and acquisition, but how many companies know that sort of information about their existing assets? I'm guessing not enough.


Second, Tumas' team reached out across IT, which-let's face it-can be just as much a victim of silo-thinking as any other organization:

It's important we give our customers the highest availability and response times. In 2009 Gomez named us to a silver and bronze for availability and response time for Wachovia and Wells Fargo, respectively. It's a team effort, not only with the Internet services but with our mainframe and middleware partners. It's a management objective that everyone in the Internet services group is held accountable to, every year.

Third, the Internet Services Group is co-located with its business partners and worked tightly with them to plan the integration:

The key to our successful integration has been all the planning we did upfront with our business and technology partners. We meet on a regular basis. If we weren't well-connected and didn't meet on a regular basis, I don't know if we would have been this successful.

Fourth, Tumas spent time with the Wachovia team and made a special effort to integrate them into the IT organization. This is a great tip for those who are moving toward a more integrated-approach to anything, from integration to managing websites. The key, says Tumas, is ensuring team members "have a home at the end of the integration. We're committed to have them work on new applications moving forward."


Fifth, but not least, they communicated with customers throughout the process. That surprised me, because generally customers get a heads-up about a day before major changes roll out-and too often, they're notified after the fact, and usually with a lot of fanfare and self-congratulations on how the company has a new website to make your life easier. This sounds good in a press release, but can be frustrating in real life.


So I think it's brilliant that Tumas' team "pre-communicated" with customers online and by regular "snail mail." "Once these conversions are done, two-thirds of the calls from converting customers aren't because they are missing something," he said. "They are calls of the 'It's a new site. How do I do this?' variety."


All this work isn't just about better customer service; although, in my humble opinion, that would be good enough. Better integration between online stores and back-end systems also can lower integration costs.


From what Tumas says, the slow-and-steady approach seems to be paying off for Wells Fargo, Wachovia and their respective customers. That's good, because, frankly, the odds for success in these big deals-particularly in financial services-aren't fantastic, especially when you look at the IT portion.


As I shared last year, a 2007 survey by Bloor Research found that 79 percent of mergers and acquisition activity ignores IT integration. And last year, Gartner Kristin Moyer expressed cynicism about the success of post-merger integration in the banking industry, predicting that 50 percent would fail to meet initial expectations due to various reasons. They'd do well to follow some of Tumas' advice about managing these sort of deals.

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