Magazine article American Banker

REPORTER'S NOTEBOOK: On Data Warehouses: Their Value Is Clear, but Cost Is Another Matter

Magazine article American Banker

REPORTER'S NOTEBOOK: On Data Warehouses: Their Value Is Clear, but Cost Is Another Matter

Article excerpt

By CHRIS COSTANZO No one seems to dispute the importance and value of data warehousing. Knowing its costs is another matter. At American Banker's retail best practices symposium last week in Orlando, many of the presenters described their progress in being able to separate and analyze customers by profitability. KeyCorp of Cleveland, for one, is using this capability to expand relationships with its most profitable customers and improve the unprofitable ones' results. Responding to a question after his keynote address, KeyCorp chairman and chief executive officer Robert W. Gillespie said, "I couldn't tell you" how much the data base effort has cost. "It would be a pretty impressive number," he said. "It would be pushing right up to near $100 million, I would guess." Joseph W. Saunders, chairman and chief executive officer of Fleet Card Services, said he would be "hard-pressed to put an actual number" on the technology investments his organization has made. "It just goes on and on and on and on and on," he said. The endless investing is necessary, he added. Organizations that do it can transform a raw list of names into a successful, national mailing solicitation that earns superior response rates and leads to lower losses, he said. Randall B. Grossman, senior vice president for customer data management and analysis at Fleet Financial Group, knew exactly how much his bank spent on its data warehouse, which was completed last year: $28.1 million. He gave that number in an interview after his conference speech. That was about $10 million under budget, he said. Fleet never proceeded with a planned second phase of the project, after determining its goals had been met with the first, larger phase. Fleet's secret was fixed-price contracts, he said. "There's nothing like the discipline of a fixed budget to force you to compromise and manage scope. …

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