InformationWeek
Defining The Business Value Of Technology
May 3, 1999
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The aggressive customer thrust comes at a time of heightened internal activity for the financial-services company. Citibank and Travelers are in the midst of integrating their huge operations; as part of a $900 million restructuring charge last December, Citibank and Travelers are consolidating some of their call centers, back-office operations, and trading platforms. Citibank is revamping its IT infrastructure to support the growing emphasis on E-business. Also, the combined organization is dealing with final year 2000 conversions and testing.
"They have a huge task ahead of them," says Rajeev Agarwal, a senior research analyst at the Tower Group. "Trying to implement this online strategy across the board in every business unit is a humongous challenge, not just from an IT perspective but from an organizational and political perspective."
No Rivalry
The efforts to become a more Web-centric business, speed development, and significantly increase the customer base can't be done without strong support from central IT. Mary Alice Taylor, who as senior corporate officer and head of global operations and technology runs Citigroup's IT infrastructure, says there's no rivalry or political friction between e-Citi and Citigroup's IT department. "We both view this as a partnership to support the overall business," Taylor says. "We're also working to bring Travelers into the effort. We all recognize that customers will want access to Citigroup from multiple venues."
Certainly, e-Citi is a drop in the technology bucket compared with Citigroup's overall IT budget. Taylor won't comment, but Tower Group estimates Citigroup's IT spending, including Travelers' IT budget, at $3.3 billion to $3.5 billion. Taylor also won't comment on specific IT initiatives concerning the billion-customer target, instead emphasizing that Citigroup is building new capabilities that "give us maximum flexibility."
With outsourcing provider AT&T Solutions, Citigroup is converting all of its internal data networks worldwide to TCP/IP from a hodgepodge of older, non-Web protocols. Stan Welland, division executive for global technology infrastructure, says the conversion should be completed by the third quarter and will let the company expand bandwidth as its customer base grows.
Citigroup is also moving to standardize its desktop and server hardware and software, LANs, E-mail systems, and thin clients. Helping to coordinate the standards effort is Tom Trainor, former CIO at Eli Lilly and Co., whom Citigroup tapped late last month to head its global IT operations.
The company is also consolidating its data centers, from as many as 200 worldwide to the current 60, and eventually down to about six. Meanwhile, e-Citi is developing middleware that links Citigroup's mainframe-based legacy environment--such as a database of 45 million credit-card holders--and its Web architecture. Middleware tools, including a mix of internally developed and commercial products from numerous vendors, will provide functions such as message handling and communications protocols between older and newer systems, Horowitz says.
"The object isn't to move off mainframes," says Leon Williams, chief technology officer at e-Citi and a former CIO at a Sun Microsystems unit. "We have a set of core banking products that will be on mainframes for a long time because of the huge amounts of data processed. But we're connecting those systems to Web-based front ends."
Web Commitment
Still, the reduction in mainframes reflects Citigroup's increased emphasis on Web servers. Indeed, Citigroup's commitment to the Web and E-commerce is among the most aggressive in the financial-services industry, says Christopher Musto, senior analyst for Internet banking at Gomez Advisors. "Clearly, Citigroup recognizes what the Internet brings to the business model," Musto says. "Citigroup hasn't necessarily done more in any one segment than its peers, but is doing things all over the place in the United States and internationally."
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