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How do you make technology decisions?
Ward: We have a very bottom-line approach to running the bank. If anyone wants to bring in technology, it's got to pass a few hurdles, including sign-off from the Executive Committee. For example, if Frank wants me to bring in a new piece of technology to increase sales, or I want to bring it in to reduce expenses, when we approve the project, we change the budget for the line organization as well as for the support organization. So if I say I am going to save $2 million by bringing in this technology, my budget goes down by $2 million. And if I've oversold it, I've got a challenge to meet my budget.
In other institutions, you'll see an IT organization being split up. You'll have a line of business with its own IT department and another line of business with another IT department. So when you try and figure out what's going on in IT, it's very difficult to figure out where all the IT resides. And then it's very difficult to be on the same page. We are at a size today where all of IT is in one location, and we tie the budgets and the allocations so that every dollar I spend gets allocated to each of the lines of business monthly. I have zero budget at the end of each month. If I'm spending money in a way that's not prudent and that money is getting allocated to Frank's line of business every month, I'm going to hear about it loud and clear. I think that set of disciplines causes all of us to work closely and ensure that whatever we do has the result that we expect.
Do you make overly conservative choices under this model?
Ward: No. I think we are making business choices that make sense for the business. I've worked in a number of organizations, including a very large bank, and sometimes saw the technology and lines of business going separate ways or not being able to communicate very effectively. I really do feel that the role of IT is to support the bottom line. So what I do each month is have a meeting with each of the different banking groups to basically show them where we are on their current projects and look out over the balance of the year. If Frank says to me, "I want you to stop that particular project and put resources on this other project," then we'll do that. If his objectives shift next month, my responsibility is to shift my priorities to meet his objectives.
Bonetto: It's been a conservative approach all along. I mean, as we've grown, we've had to add more resources. Obviously, our budget has expanded. And so we've had to take on some things. We've brought a number of applications in-house -- not mainframe applications but, for example, our Internet banking solution. Although for another product, we brought it up on an ASP [application service provider] model and are ecstatic with the performance.
Ward: We really bought into the concept that we don't have to build it. For example, when we looked to offer a signature-based debit card, we could have gone and purchased software and increased the size of our CPU and run it in-house, or we could have gone to somebody like FDR, or First Data Resources. We ran the economics very thoroughly and came to the conclusion that we could get to the market faster and with lower cost by using FDR.
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