...June 7, 1999 Providian Trust: Tradition and Technology (A) A New CEO Within two weeks of accepting the position of CEO of Providian Trust Company, Stephen Walsh, a lawyer by training, faced an unusual corporate conflict and he would have to play the role of judge. There was an extraordinary difference of opinion between Providian Trust’s internal auditor, Peter Storey, and the leaders of a major information technology (IT) project in the trust division. “Peter’s extremely vocal point ran to the issue of documentation, that it was incomplete and should be brought up to speed,” explained Walsh. The conflict reached a climax during an Audit Committee meeting on May 13, 1995, when members of the committee, who were all on the Providian Trust board of directors, expressed to Walsh that they had lost confidence in the internal auditor and recommended that the external auditor, Steinman & Smith, do an analysis of the project documentation prior to implementation. The purpose of the project was to convert the trust division’s outdated information system into a more efficient system using Access Plus, new trust and custody management software made by Select One. The project had been initiated in 1993 under a former CEO, who had been dismissed by the board, and had continued under an interim CEO. By the time Walsh arrived on the scene, over two-thirds of the $18 million budget had been invested in the implementation of the IT project and Providian Trust had built up expectations...
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...Providian Trust: Tradition and Technology Business context/Key business drivers Providian Trust, headquartered in New York, is a financial and fiduciary services company. In 1994, it had 216 branches and managed $49.4 billion in trust assets with a staff of 840 full-time employees. The firm was falling behind the competition because the institutional custody business was becoming extremely technology-intensive, with some of the larger players outsourcing their entire backroom function in order to make large operations more effective. Therefore, a project was initiated to convert the trust division’s outdated information system into a more efficient system using Access Plus, a new trust and custody management software. Initiatives objectives/Benefits Intensive competitive pressures, client demands, and some internal problems were driving the need for the initiative. Specifically: 1. Competitors were having more advanced systems and technical competitive advantages 2. Clients were unhappy about the quality of the services 3. Decentralized control and lack of a clear distribution of responsibility Providian Trust wished to solve the above problems through the implementation of the new system. They also expected that the improved computerized trust system would consolidate and centralize data administration, give trust officers more time to interact with clients, reduce the number of full-time employees from 840 to 660, and save $9.2 million annually. Initiative...
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...HULT International Business School Module C Information technology management Professor: Jim Slusser PROVIDIAN TRUST: TRADITION AND TECHNOLOGY (A) Fenway Cohort Kamanasish Kundu 1. Business Context/Key Business Drivers * In 1994, Providian Trust, the tenth largest provider of financial and fiduciary services, slowly slipped away from profitability and competition due to the lack of efficient business processes and information technology. * The company was headquartered in New York and had three divisions Pension and Institutional Trust Services (PITS), Personal Trust and Trust Operations with a network of 216 branches. * To address the problems that Providian Trust were facing, Michael LeBlanc, the Senior Vice President of Trust, Investment and Treasury, took the initiative to lead the project aimed at not only implementing new technology but also reengineering Providian Trust’s business processes by implementing a major software system, Access plus, developed by Select One. The project, supposed to last for 20 months, cost $18 million, was finally approved by board members in April, 1994. * The key driver behind the above initiative was intense client demand on the part of PITS division, lack of control and discipline in the trust division, lack of operation efficiency and outdated reporting system. 2. Initiative Objectives/Benefits ...
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...Providian Trust (P.T.) was a financial services company built on tradition. However, P.T.’s services were only marginally profitable as trust officers (T.O.) were responsible for cultivating client relationships while also handling account admin work. Their inefficiencies in handling administrative tasks led to customer complaints and $2-$5M in waived fees annually. Michael Leblanc, the SVP of Trust, Investment & Treasury saw the urgent need for change in order to keep up with competition and produce a high profit margin. With those goals in mind, Leblanc received approval from the P.T. board to install Access Plus (A.P.), new trust and custody management software. During this change process, failure to establish strong collaborative leadership to endure critical stages of the project implementation as well as misalignments between company values and processes complicated this change. Without the leadership of new CEO Stephen Walsh, who chose to maintain a ‘neutral’ status during project initiation, responsibility for implementing the A.P. system fell on Leblanc, who had no prior project management experience. Leblanc established a sense of urgency for the new project, but multiple attempts to create a strong guiding coalition failed because there was not a diverse enough set of representatives in the Steering Committee or the Implementation Committee. Without a strong committee, a cohesive vision cannot be achieved or communicated throughout the division. The committees...
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...THE iPREMIER COMPANY (A): Denial of Service Attack By Robert Austin November 19, 2003 DPDN Brian Dyrud Jennifer Paterson Paul Davidson Lindsay Neal BACKGROUND: iPremier, a Seattle based company, was founded in 1994 by two students from Swathmore College. iPremier had become one of the only success stories of web-based commerce, selling luxury, rare, and vintage goods over the Internet. Most of iPremier’s goods sell for under $200 and the customer buys the products online with his or her credit card. iPremier’s competitive advantage is their flexible return policies which allows the customer to thoroughly check out the product and make a decision to keep the product or return it. The majority of iPremier customers are high end and credit limits are not a problem, which also adds to the competitive advantage of utilizing their entire customer base. During 1999 the company reached a profit of $2.1 million on sales of $32 million. Sales had increased by 50% during the last three years and they were in an upward trend. iPremier’s stock nearly tripled after the company’s Initial Public Offering in 1998 and had continued to grow since the IPO, and eventually the stock tripled again. iPremier was one of the few companies to survive the technical stock recession of 2000. Management at iPremier consisted of young people who had been with the company from the start and a group of experienced managers that were brought in over time as the company grew. IPremier’s...
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...CASE ANALYSIS- Providian Trust: Tradition and Technology Kate Cavanaugh Stakeholders * All Employees / committees and Teams / Internal and External (e.g. Boston) * CEO Stephen Walsh * Steinman and Smith (External Auditor) * Audit Committee * Board of Directors * Select One (Software company) * Michael LaBlanc * Kay Whitney Investment (investment counsel/portfolio managers) * Steering Committee * Todd Bernari- VP of Implementation Team History * Headquarters NYC * Company lending products: residential, commercial mortgages; consumer/corp loans (principle revenue) * New CEO Stephan Walsh –Law background * 216 branches nationwide * 840 employees * Managed Total $49.4B * Pension & Institutional = $42.7B * Personal Trust Services= $6.7B (10,000 clients) * 250 Operations People “back office” * “Front office” people are Trust officers Decision: To implement new hardware and software to existing systems Case Information: * Budget $18M * New technology – Culture change- seasoned employees (20-30 years) * Lost revenue because of waived fee $2-5M * Improve Service levels to Customers * Software customized * Computer system outdated- replace and integrate new hardware and software * Responsibilities change from Trust officers to Operations managers * Train employees on systems * Reduce number of employees from 840 to 660 * ROI- $9.2M * 1010 Financial...
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