Managing Information Technology

618 Part IV • The Information Management System

internal IT team that would complete the data-center relo-
cation project, including the conversion of the $15 billion
loans from Unity to Class, by May 2001 (see timeline in
Exhibit 3).
The CIO’s plan called for managing the project
internally using a project management office (PMO) struc-
ture that had been used for the $80 million USA Group
Eagle II guarantee system a few years earlier. Because of
the minimal consulting role, the savings in consulting fees
were projected to be $3.5 million.

Sallie Mae’s executives knew that in this day and age

where everything has to be done at Internet speed,

the merger had to be incredibly fast and incredibly

successful. Otherwise the marketplace would really

punish you.... The longer a merger goes, the more

uncertainty there is of how well you’re going to pull

it off, the more your products or services have a

mixed reception by your customer, and the more

your leadership is uncertain. In two or three quarters,

if you’re not saying, “we’re getting it done,” you will

see your stock price being affected.... We decided

that if the consultants weren’t helping us reach our

goals, we didn’t need them.

—Hamed Omar, Senior Vice President,

Technology Group

Sallie Mae’s management decided to back the inter-
nal IT leaders. For the Indianapolis team members, an
extra motivation to succeed was a rumor that a consulting

partner on the loan-servicing system gap analysis had bet a

Sallie Mae executive that the Indianapolis team could not

pull off the FastTrack integration plan. This had made

everyone mad, and created a reason for breaking the

boundaries of 60-hour weeks.

The Data Center Relocation Team

The team structure for moving the IT headquarters to

Indianapolis is shown in Exhibit 4. The data center reloca-

tion (DCR) team had its own steering committee of six

direct reports to the CIO, chosen because of the criticality

of their areas of responsibility within the two IT organiza-

tions. The primary objectives of the steering committee

were to make top-level decisions and to keep obstacles out

of the way so that the project team members could get the

job done. They were responsible for setting strategic

direction and mitigating the risks of the project, while still

actively managing their own IT functions.

Along the way, I questioned things quite a bit from

a financial and risk standpoint. I didn’t want to put

the company at risk by moving the integration

along too quickly. We had a number of checkpoint

meetings to ensure we’d be successful at a reason-

able cost.

—Greg Clancy, Chief Information Officer

You have to trust your people. Give them auton-

omy. Listen, and don’t hold them back. A jockey

EXHIBIT 3 IT Integration Timeline and Market Responses

Activity Date Accomplished Stock Price

Merger announced June 15, 2000 $36.63 (June15)

Merger finalized; CIO announced Aug. 1, 2000 $43.88 (Aug.1)

Data center location and Unity/Class decisions announced October 2000 $48.69 (Oct.2)

IT consultants hired for data center relocation (DCR) project November 2000 $57.56 (Nov.1)

Decision to lead DCR project internally December 2000 $57.87 (Dec.1)

Move elements identified and major milestones established January 2001 $62.81 (Jan.2)

Reston data center moves began February 2001 $66.00 (Feb.1)

Initial enhancements to customer-facing applications completed April 2001 $74.80 (April2)

Reston mainframe move completed May 13, 2001 $66.20 (May 14)

Peak loan processing season begins June 1, 2001 $69.60 (June1)

Date Scheduled

PeopleSoft Financials implementation November 2001

Full enhancements to call center routing application April 2002