(Reprinted from Optimize magazine, March 2003)
In banking, real time is all the time. For KeyCorp, the goal of moving to real-time business technology was to let clients access and maintain accounts anywhere, anytime. It's been an ongoing process, but KeyCorp, one of the nation's largest bank-based financial-services companies, has gotten very close to meeting those goals.
With 3.8 million households and commercial clients, nearly 21,000 employees, and assets of $84 billion, Cleveland-based KeyCorp has worked since 1997 to supply up-to-date, synchronized information via multiple channels to individuals and corporate clients, regardless of their location. Even without Web-based technologies, KeyCorp began delivering on its objectives. It used a trio of proprietary middleware products to integrate applications enterprisewide. These systems include an online delivery system (OLDS), a second-generation KeyServer application-integration broker, and an enterprise data warehouse--at 10 terabytes and growing.
A real-time business "removes delays from various business processes to enable 'right-time' needs to support faster decision making," says Michael Dunn, KeyCorp's VP of enterprise architecture.
More than five years ago, as the regulatory climate shifted, KeyCorp was among the first to organize under a national charter, giving customers of previous state-chartered banks access to KeyCorp services in any state. In the past several years, the company has integrated three sets of banking systems from prior mergers, created an Internet presence offering a wide range of financial services online, and acquired companies in auto financing, capital investments, commercial real estate, and mortgage banking, among others.
By 1999, KeyCorp needed to better integrate enterprisewide applications and support platforms such as J2EE, Lotus Notes, Visual Basic, Windows, and other packaged applications. So it developed KeyServer, an "application-integration broker," as Dunn calls it, designed to more seamlessly upgrade batch applications to real time.
KeyCorp estimates that its early efforts let the company provide new products and functionality 12 to 18 months sooner and achieve higher Internet-banking penetration among retail-banking customers than most competitors.
With KeyServer, the company reduced application-integration costs by $2 million in its first year, dramatically improving the speed of application integration and cutting the cost of connecting applications by 30% to 35%. For Dunn, the key to success is to focus on customer and business needs, and to define an architecture that can be upgraded incrementally. The cost isn't justified by the need to be a real-time enterprise. Instead, he says, "We must be eternally vigilant to apply real-time technology where it has business value."
It's also important to plan, track, and measure business value and progress. The company's Key Total Treasury application, for example, helps corporate customers manage financial transactions online and has typically added new features up to 18 months ahead of competing banks. Dunn says KTT is one of the biggest revenue generators for KeyCorp. "ROI on KTT is 200% over its projected return period," he says.
One challenge now involves building online analytics using the enterprise data warehouse, which collects and analyzes customer information for data mining, cross-selling, up-selling, and a variety of other marketing efforts. "We want to provide at least near real-time data to business users by updating information more frequently," Dunn says. KeyCorp hopes to move additional processes and applications to real time as business needs dictate.
Barton Goldenberg is president and founder of ISM Inc., CRM and RTE strategic advisers based in Bethesda, Md. He is the author of CRM Automation (Prentice Hall, 2002 and 2003) and publisher of the Guide To CRM Automation (11th edition). His new book, Creating the Real-Time Enterprise, will be published in fall 2003.
This article originally appeared in the March 2003 issue of Optimize, whichprovides 70,000 Business Technology Executives with business thought leadership and practical knowledge to bridge the gap between business strategy and execution. To subscribe: https://www.optimizesubscriptions.com/customerservice/