The 150-year-old First National Bank of Omaha is leaning heavily on IT and its CIO to expand into futuristic high-tech branches, attract 1,000,000 new online customers, and open profitable branches in new territories. Ripping out legacy systems to free up needed funds, FNBO offers a classic example of how customer-focused IT can create huge new business value. UPDATE: This boss must have been just too ideal for this imperfect world -- he resigned this week!FNBO President Rajive Johri doesn't sound like a typical buttoned-down president of a financial institution -- I mean, he even talks about making banking fun! -- but he does sound very much like someone who realizes the competitive advantage that IT can bring when it is deployed aggressively at the point of the customer to drive engagement, value, and enjoyable experiences. Here's what he told our excellent sister publication, Bank Systems & Technology, last year:

"We are creating a different type of experience than what currently exists in the Omaha market. In the past 18 months we've opened four new branches, including a state-of-the-art branch we call the Future of Banking, to celebrate our 150-year anniversary. It's a high-tech, fun branch with smart ATMs, interactive kiosks, a coffee shop and an area designed for our business clients to work."

And that approach has been notable not only for its boldness but also for its success, Johri told BS&T, with double the rate of new customers and deposits compared with more-traditional branches. On top of that, the new advanced-technology branches have created some favorable buzz for FNBO in its community, Johri said.

Don't let those comments from Johri give you the impression that he's some slick-talking huckster who thinks IT is all about iPods and Facebook; quite the contrary. As the profile of him and FNBO in Bank Systems & Technology shows, he's got a deep sense of not only IT's potential but also its complexity, its mismatched layers, and the expensive and enduring difficulties it can create when not managed and deployed properly.

"It's difficult, complex and very expensive to integrate modern technology with legacy systems. We struggle with creating an environment in which the customer has the same experience whether he or she walks into a branch, calls on the telephone, or logs on to the Web. We are constantly fighting the battle of spending enough dollars to renew ourselves while reaping the right ROI for that investment."

Notice how Johri uses the terms "struggle" and "constantly fighting the battle" to describe the relentless effort needed to reverse the 80/20 ratio at his bank -- that's a point we at Global CIO have made recently about the level of commitment and intensity needed to make substantial changes in how much of the IT budget gets ground up by maintenance and how much can be applied toward the growth-oriented projects Johri is leading at FNBO. "Our biggest technology challenge is managing our large number of legacy systems," Johri said. Accordingly, for almost three years FNBO has been cutting back-office costs by replacing high-priority redundant systems: two credit-card platforms reduced to one, six imaging platforms to one, and an ongoing ouster of back-end legacy systems. The company will replace those hogs with new software platforms that Johri says will "lessen the time it takes to launch new products," which is a strategic necessity for FNBO and one that would not be possible without aggressive IT participation and leadership.