Merrill Lynch Mixing Outside, In-house Apps

Computerworld - Merrill Lynch & Co. last week disclosed plans to seek outside help in developing and maintaining a PC-based investment management system for its financial advisers, a project sources said will likely cost the firm more than $1 billion.

New York-based Merrill Lynch said that it expects to sign a joint development agreement with Thomson Financial, a Boston-based company that sells financial data and software tools. A five-year deal should be finalized in the next few weeks, said John McKinley, chief technology officer at Merrill Lynch.

The contract alone could be valued at up to $700 million, sources said. The plan calls for Thomson Financial to help Merrill Lynch build the new system and then to supply the brokerage's end users with external market information on an ongoing basis. Thomson will also do hardware maintenance work for Merrill Lynch.

McKinley said Merrill Lynch also plans to incorporate Siebel Systems Inc.'s customer relationship management (CRM) software and third-party financial planning tools that have yet to be chosen.

Change From Proprietary

The Wealth Management Workstation system, which will be used by about 25,000 Merrill Lynch employees, will replace an 8-year-old investment management system that was developed in-house using proprietary software.

McKinley said the new system will combine proprietary technology, such as Merrill Lynch's account processing engines and investment planning tools, with the outside applications. "This is a seminal event," he said, noting that it took "a leap of faith" for Merrill Lynch officials to decide that commercial software and data services offered sufficient capabilities.

The new system is scheduled to be rolled out in the U.S. next year and to be expanded globally in 2004, according to McKinley. For hardware, he said, Merrill Lynch plans to buy Intel-based desktop PCs with dual, flat-screen display terminals for its advisers. The company has yet to select a vendor for the PCs, which will be linked to a combination of Windows and Unix servers and the company's back-office mainframes.

McKinley declined to comment on the expected cost of the project, which will also include a redesign of Merrill Lynch's client Web sites.

The system will provide Merrill Lynch's financial advisers with market and client account data, news feeds and portfolio management tools. It's also expected to add a greater degree of personalization for customers through the use of CRM and online collaboration tools, McKinley said.

Larry Tabb, an analyst at TowerGroup in Needham, Mass., said Merrill Lynch's system will be based on an open architecture that should make it "fairly easy to add content created by third parties."

Technology Plans Merrill Lynch's new investment management system will: Include financial and economic data supplied by Thomson Financial Use Siebel CRM applications and third-party financial planning tools Run on Intel-based desktop PCs that are connected to a mix of Windows and Unix servers

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