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Jean Davis's responsibility is to integrate all of Wachovia's systems, technologies and operations since its 2001 merger with First Union. It wasn't a cake walk, but the new entity is beginning to hum.

Even in the best of times, mergers between large banks are difficult to pull off successfully, especially when it comes to combining the technology of competing legacy platforms.

But the 2001 merger between First Union Corp. and Wachovia Corp. seemed particularly challenging, coming as it did at the end of the overheated markets of the 1990s. Industry analysts did not know what to make of the deal, wondering if this was the last of the big bank mergers. At the same time, people did not know whether to call this a merger, a hostile takeover, or an acquisition. And given First Union's much publicized technology problems from its previous merger with CoreStates, many anticipated huge problems.

That did not happen.

One reason, perhaps, is that Jean Davis, senior evp and division head for information technology, e-Commerce and operations at Wachovia, oversaw much of the technological integration. As the most powerful female executive at the Charlotte-based bank, observers say she brought plenty of diplomacy, technological know-how, stamina and tenacity, not to mention access to the top-notch IT providers, and a great deal of creativity.

Given the shape of things today, the new Wachovia appears to be on solid footing, and in a good position to meet its technology goals for 2003 and 2004. "By any test, in terms of stock market performance, the combined company has done fine," says Tom Burnett, president of Merger Insight, an affiliate of the New York-based brokerage firm Wall Street Access. "Wachovia was viewed as the stable partner that would give the combined company something that would help them overcome the problems that First Union had, and I would give credit to the Wachovia team for getting control of the situation," he says.

It was no small feat, however, figuring out how to merge the legacy platforms of both banks, in some cases 15 to 20 years old ach bank had 35 different business units with more than 100 individual software applications. The task was made all the more complicated by a directive passed down by chairman and CEO Ken Thompson that the new bank was not to lose a single customer during the integration.

"The guiding principle was that we did not lose a single customer," Davis says. "With a company as large as ours, with millions of customers, that can sound impossible, but the truth of the matter was it provided a good litmus test for the months to come."

Fortunately, the company also had at its disposal 4,500 IT employees, as well as an additional 1,600 contractors brought on board specifically for the integration.

Nevertheless, organizing such an army of people and planning the integration schedule was a strategic challenge fit for an army general. Davis and her crew had to devise very specific calendars mapping out exactly which business groups were to be converted and when. To do that, the bank conducted frequent readiness meetings with each business unit to determine its preparedness for conversion.

The bank also set up 30 command centers in its new footprint along the East Coast, so that when the integration began, on a careful state-by-state basis, the bank could properly fire on all cylinders.
Industry experts laud the logical pace with which that all happened. "Wachovia and First Union moved very deliberately to bring the branches of both banks around," says Bert Ely, head of banking consulting company Ely and Co., in Alexandria, VA. "They have moved very deliberately and very wisely in planning and executing the integration of all the systems."

Other industry observers say determining which legacy applications win out and which ones are remaindered is a matter of high politics and emotion for most organizations during a systems merger. "You have to make some very hard choices that are internally and politically very difficult-whose systems are you going to use, Wachovia's or First Union's?" says Alenka Grealish, manager of the banking group at Boston-based consultant Celent Communications.

Davis agrees, adding that she and her team kept flareups to a minimum, mostly by getting people to agree to a common set of priorities beforehand.

Davis says that in many situations, First Union's platform triumphed, because it was the larger bank and it had more customers. But in other cases, Wachovia had a technological edge, so it won out.

For example, when it came to Internet banking, First Union had the lion's share of Wachovia's current three million on-line customers, so the merged entity transitioned primarily to First Union's platform.

When it came to which data center and mainframes the new bank would keep, they settled on Wachovia's, because it had recently made a huge investment in a state-of-the-art center. "It meant the right decision was usually the application that was processing more volume," she says.

Davis' finesse and ability to make a quick study of such a gargantuan project comes as no surprise to people who know her. After all, she began her career at Wachovia in 1985 dealing with people. For many years, she served as manager of Wachovia's branch network, and then as the director of the bank's human resources department, before being called over to technology and operations in 2001. "She has as good an enterprisewide knowledge of the company as anyone I have ever worked with," says David Carroll, senior evp and co-head of merger integration and corporate support services for Wachovia.

Looking forward to 2004, Davis acknowledges that her technology challenges are still enormous.

"The industry does not stand still during a major integration," she says. "When we came out of the integration, we had to insure we were not already behind."

For example, the September 11 terrorist attacks happened shortly after the merger was announced.

As a result, Davis says a chief priority will be to assess the bank's risk management and disaster preparedness capabilities. Additionally, Wachovia will spend more than $250 million for its Next Generation Network, a high-bandwidth network launched by First Union shortly before the merger.

As part of this, the new Wachovia will install thousands of new PCs in its branches from Florida to Connecticut and will conduct technology refresher courses for its investment banking, capital markets and brokerage offices, among other units within the organization.

Meanwhile, Wachovia has another big technology conversion coming up, stemming from its acquisition of Prudential Securities from Prudential Financial Inc. in July of 2003.

Davis says the project has already begun, but the major part of the conversion will begin in earnest on Labor Day, 2004. Somehow, that seems appropriate.

By Jeremy Quittner