Merger Integration at the Bank of America The TrustWeb projectGlobal Executive MBA (Singapore), Project Management, November 2011

Group 5Max Howard Ryan Kamalesh Sarah Issac Raphael

Presentation Agenda1) Background of Project 2) Project Scope Statement 3) Evaluation of Projects probability of success (Addressing question if the project still on track?) 4) Recommendations to Project Manager on management approach (Addressing approach given PM is not technically inclined) 5) Highlight Key Issues and Recommendations for Improvement

Background (1/2) Bank of America has acquired U.S Trust to strengthen its Global Wealth Management DivisionUS$21B Profit Other Information: Bank of America, experienced in M & As places much focus on a successful integration of an acquisition. Forms dedicated team from various levels (Transition Program Office) when required for a smooth transition. US$73B Revenue

Global Consumer & Small Business

Global Corporate & Investment Banking

Global Wealth Management

Reports direct to CEO, via Chairman. TPO kept intact for 6 18 months, as deemed necessary

Premier Banking & Investments

TLT Chairman Columbia Management Private Bank Transition Leadership Team (TLT) U.S Trust Wealth ManagementNov 06, Announces acquisition Jul 07, Deal closes officially

Notes: 1. The acquisition of U.S Trust aims to serve the needs of wealthy individuals and families nationwide through bank of America s broadbased service and unparalleled distribution platform. Vision of Bank of America s senior management firmly believes in integrating new and existing operations, rather than leaving an acquisition operating stand-alone.

Stakeholder Group (Various Projects)

2.

The assignments coverage evaluates the integration aspect from a recent M & A, in a critical IT integration projects; TrustWeb.

Background (2/2) The transition to effect the Merger was coordinated but was not a smooth processASSESSMENT PHASE/ ENTERPRISE LEVELCurrent Environment Review Identify Capabilities of both entities Identify gaps in between capabilities

TRUSTWEB EXECUTION PHASE/ PROJECT LEVEL0% TrustWeb Project Detailed Plan Business Requirements Document High Level Design Document Low Level Design Document Prepare Code readiness, train & test 4. Execute and Deploy 100%

DECISION (IT Area)1. Whose system to adopt?

STATUS1. High resistance from U.S Trust personnel highlighting serious degradation in service if identical functions from old system were not provided.

SUB PHASE 1

OUTCOME (IT Area)1. Selected Bank of America s proprietary technology platform (TrustWeb) as it was more flexible and scalable.

Target Environment Review

SUB PHASE 2

Recommendations on processes to address concerns 2.

2.

Technical lead highlighted time and budget constraints.

Justification due to multi-faceted reasons e.g Contractual issues, cost, impact to users.

3.

Integrated Plan

Create multiple projects Define Scopes (Indiv Projects) Seek Funding

PM decided on staged implementation to upgrade patch release 1.0 and yielded to further enhancements desired by U.S Trust in future release 2.0.

3.

TrustWeb would be enhanced (TrustWeb Project) to cater for integrated use and comply with regulatory requirements.

SUB PHASE 3

Resulted in scope additions, potential bursting of budget and delay in delivery.

IT integration was dramatically debated, resulting in deviation from its original scope.

Project Scope Statement TrustWeb Project PM: Mike Morris1. Executive Summary BOA has acquired UST, with its legal completion on 2 Jul 07. Direction from TPO, for IT team to facilitate the transition. TrustWeb Project, is an enhancement to BOA s accounting and customer support system. Budget allocated US$3.3M, and total man hours at 42,500 Hours. Customers; Integrated users of BOA and UST Associates. 2. Business Objectives Facilitation of new acquisition (UST) integration. Serve regulatory requirements on the acquisition. Close functionality gap between BOA and UST. Delivery to support integrated operations by 2 Jun 2008. 5. 3. Project Description Design and build enhancement of BOA s TrustWeb system. Cross functional project team sign-off Biz Requirements/ Specs. Delivery of Rel 1, addressing regulatory requirements. Delivery of Rel 2, adding functionalities to address UST Associates. 4. Exclusions

Question 1

BOA/ UST Back Office Systems Integration (less specified) Non-Private Banking Client facing systems integration i.e Consumer/ Enterprise etc

Project Milestones* From exhibits

TrustWeb R1 Code Ready R1 Test Complete R1 Training Program Complete Cutover R1 Patch Trustweb R2 Code Ready R2 test Complete R1 Training Program Complete Cutover of R2 Patch Control Toll Gate

30 Nov 2007 05 Feb 2008 10 Mar 2008 10 Mar 2008 25 Jan 2008 25 Jan 2008 12 May 2008 12 May 2008 02 Jun 2008

ContextDate is 16 Aug 07, just after a Transition Program Office (TPO) update in New York, and one month after a project discussion in Dallas for Release 2 requirements. Former CEO of U.S Trust, had resigned earlier in the year, leaving no senior representation from U.S Trust on the Transition Leadership Team (TLT). PM, Mike Morris who had recently joined the transition execution team and taken over the project in early 2007 reflects and understands probability of deeper issues to come. Our Group (Group 5) addresses the issues

Question 2

Is Project still on track? Boils down to question if the requirements were clear to the Project Stakeholders Project is not on track, apparently Morris is not able to get UST leaders to agree on the functionality of client reporting. BRD is said to be completed but the customer service and technical lead from UST is not agreeing to it. The requirement is unclear as the specification of the project can not be agreed upon. Project can be brought back on track by ignoring request on specific features but risking the degradation of service as claimed by UST. Morris missed the Dallas meeting, missing an opportunity to understand the requirement, first hand, from the 40 participants. Missing the chance to sell the tradeoffs of the project deliverables to UST. Morris also did not leverage other technical resource outside project team to address UST requirement based on existing constraint.

Question 3

Mike Morriss (Project Manager) BackgroundDegree in Environmental Engineering Combat Engineer (Army) Non IT Engr/ Business Education No direct PM training Military Background Strong leadership background Relatively new Project Manager Only 3 project before TrustWeb Underestimating significance of organizational skills

MBA at Harvard Regional manager (security company) Consultant (security company)

Operations Analyst (Consumer Bank) Transformation Projects (Bank of America) TrustWeb Project (Bank of America)

We feel that an effective PM will do We look at Mike Morris characteristics from the article.Effective Project Manager Mike s Traits

Innovate & Maintain Stability See big picture while getting hands dirty Encourage individuals but stress the team Hands-off/Hands-on Flexible but firm Team vs Organization loyalties

System thinker Strong leadership Personal integrity Proactive High EQ General business perspective Effective time management Skillful politician Optimist

? ?

X

? X

Analysis If PMs non-technical background will impact success of project.High level of uncertainty/ Disagreement on scope of project Resistance to change. It is more social than technical. Nevertheless, such limitation brought on by weaknesses should be minimize through suitable delegation. For example, he could direct his technical lead to head all technical issues. He lacks the authority and expert power over the senior leader of UST, and this prevented his from exercising a more firm control over the scope of the project. To prevent a complete state male, he divided that project into the agreed and disagreed portions, and proceeded with the former. This brought his time and pave way for subsequent discussions. It is unlikely for any Project Manager to posses all desired competencies

To be more successful, he has to manage change of project scope more firmly

Question 4

Highlighting the IssuesEnvironmental Potential loss of existing customers and employees: Cost reduction activities BOA s mass market vs. US Trust s personalized service Lack of US trust membership within TLT (other than being members of stakeholder group). Lack of leadership from U.S Trust due to resignation of CEO. Target environment of the merged concern occasionally driven politically. Trust web platform lacked some functionality of US Trust system platform affected both US Trust employees and customers. Overconfidence of BOA with regards to doing M&A Selection of platform not based on cost benefit analysis Project Management Project Manager not technically proficient (Discussed separately) novice change manager, consensus vs. decision making Absence from key meeting Project team lacked transition experience novice analysts + 1 technical expert. Handling multiple projects without clear focus. Critical Business requirements identified post charter development Scope Management issue Leadership team: How can design be on track when requirements or scope not well defined 2

Issues Root Cause AnalysisProject Delay KEY ISSUE

Scope Change post Charter approval

Trust Web Functionality lacks US Trust features

Project Change Management team inadequacy

Critical Requirements not defined in Assessment phase

Lack of Team experience

Lack of PM skill

Lack of US Trust representation in TLT

US Trust CEO resignation

Ineffective Occasional Cost to political influence Benefit Analysis

2 novice analysts , 1 technical expert

Experienced employee attrition

Lack of soft skill: Consensus vs. Forced Decision

Lack of Focus Multi project handling

Lack of Technical Experience

Standard BOA Integration CM Structure

Cost Reduction measures

Inability to identify PO Trade-off

What can be done betterMake use of their strength of Excellent seamless integration record Structured Process Dedicated Transition Leadership team (TLT) Proprietary project templates Six sigma framework repeatable data driven Target environment decided on merit supported by data Deliberate risk management mindset However: Six Sigma should be used to improve performance and not to hinder: Allow flexibility to include US Trust representation within TLT Selection of CM team blended with knowledge of Technical know how, CM know-how and PM-know how Selection based on Effective Cost-Benefit Risk Analysis Clarity in Performance Objective Trade off

Key Take-awaysEffective planning linked to clear customer requirements,

1.

To avoid significant scope changes during execution.

2.

Keep intact leadership from both organizations, To drive shared direction critical for M & A success.

Instill all rounded management expertise during execution,

3.

To cope with, and overcome unexpected issues.

End