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5 Critical Tactics In The Wells Fargo-Wachovia Integration

Few IT shops will ever work on a project as big as this historic banking acquisition. But some tactics Wells Fargo used make sense for smaller scale mergers and consolidation projects.

For three long years beginning in late 2008, every Friday morning meant a conference call for about 100 Wells Fargo IT leaders. The topic: how to keep the technology integration of the largest bank merger in U.S. history on track.

The $15 billion Wells Fargo acquisition of Wachovia would leave the combined entities with more than 70 million customer accounts. It involved converting 3,088 Wachovia retail branches to Wells Fargo branding. It meant connecting Wells and Wachovia systems used to run 80 very different lines of business--from mortgage lending and credit cards to brokerage accounts and business loans.

And it meant eliminating half of the major IT platforms used to run the business. That's the Wells Fargo way in an acquisition--move the legacy operation onto a single system and shut down the old one; don't let overlapping technologies run alongside each other.

Martin Davis, who came from Wachovia and was tapped to lead the tech integration, led those Friday meetings with just three standing agenda items:

1. What are the lessons that were learned from recent implementations?

2. What's due to get done in the next 30 days?

3. Which problems might keep those things from getting done in the next 30 days?

Here's an example of a lesson learned. Marketing-wise, Wells Fargo wanted to move Wachovia customers to the Wells Fargo brand as quickly as possible. So when it was ready to convert a geographic area to the Wells Fargo brand, the plan was to mail each Wachovia customer a debit card with the Wells Fargo name.

But customers weren't expecting the mailing, and too many of them didn't respond by activating their new accounts. So Wells Fargo execs decided to stop issuing new cards en masse and instead let all existing cards continue to work and replace them as they expired.

That kind of business decision meant a new IT plan. Instead of systems accepting one type of card, they would need to let the Wells Fargo consumer banking systems accept legacy Wachovia cards for an extended period.

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False starts are always unpleasant, but thankfully the bank decided to reverse course when it had only about 20,000 customers converting cards, Davis says, since it realized the problem during a fairly small early rollout.

A Long, Hard Climb

Wells Fargo's three-year Wachovia integration wasn't glamorous duty. There weren't a lot of exciting new technologies to implement, as the bank's IT leaders focused on limiting customer disruption at the expense of adding many new features. The complexity of the schedule required some kind of system change most every weekend, each element a domino that relied on the previous one. "The what-ifs were just tremendous to deal with," says Wayne Mekjian, head of information services.

A group drawn from lines of business, operations, and IT went into a furious planning period in the first 90 days after the acquisition. It mapped out how the banks would run as a single organization and picked the systems, Wells Fargo's or Wachovia's, that would live or die. Teams were set up, aiming to create groups for each piece of the project that drew as close to a 50-50 mix of people from the legacy Wells Fargo and Wachovia organizations as possible.

Then, with the master plan in place, the teams had to grind it out to meet deadlines for more than three years.

This will sound mundane to some IT pros, but what kept the integration teams motivated through the long haul was being able to work on a merger "unprecedented in the history of banks, one that's not likely to be repeated," says George Cheng, Wells Fargo's head of technology governance services. "There's a lot of emotion in this."

Wells Fargo-Wachovia is on a scale few IT leaders will face, but the tactics are relevant to much smaller mergers, as well as to application and infrastructure consolidations. Based on interviews with six executives involved in the Wells Fargo-Wachovia integration, here are five tactics and best practices used by the tech and operations teams.

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