Managing Information Technology

614 Part IV • The Information Management System

PeopleSoft modules for financials and human
resources had also been implemented under project teams
led by IT groups within the business units.

The former USA Group teams had worked together

for a long time. One of the major secrets of our suc-

cess is that we know how to work with each other.

The group in Reston didn’t have the same cohesion.

CIO turnover had been very high, projects took

longer to complete, and there seemed to be more

infighting.

—Greg Clancy, Chief Information Officer

On June 15, Clancy was privately informed that he
would be CIO of the new Sallie Mae. Although the public
announcement of his appointment was not made until
August 1, both internal and external communications made
it apparent to the Reston IT group that IT leadership at the
new Sallie Mae would be primarily in the hands of the for-
mer USA Group team. For example, according to a report
inThe Washington Post, a Sallie Mae executive vice presi-
dent stated in a June 16 announcement that, “Indianapolis
has a... very high-quality work force, and in terms of the
technology environment, probably a more stable one.”^7

Those of us in [Sallie Mae] IT leadership quickly

made the decision to make this work. I was 98 percent

certain that I would not have a job after the merger was

completed, but as a shareholder and longtime member

of Sallie Mae’s management team, I believed it was

absolutely the best thing for Sallie Mae to do this.

—Cindy Gunn, Vice President of Computer

Operations for Sallie Mae

Cindy Gunn really helped on the Reston side: she

kept a great attitude... and her group was still

motivated, despite the fact that many of them would

lose their jobs after the merger was completed. She

was the linchpin.

—Greg Clancy, Chief Information Officer

Soon after the merger was announced, all critical
systems were assigned to teams of two technology
“champions”—one from Sallie Mae and one from USA
Group. Together, the two champions were responsible for
conducting a full disclosure and comparative analysis of
the relevant systems. Knowing that Sallie Mae executives

would need to have a high degree of confidence in the

capabilities of the acquired USA Group team as each sys-

tem alternative was examined, the USA Group IT man-

agers encouraged their people to take advantage of every

opportunity to demonstrate their abilities to develop

innovative applications and to handle operations that

would be triple the size of the systems they had managed

in the past. They also changed their decision processes so

that they could make decisions faster:

We had to focus on making decisions quickly, so our

decision-making process had to change. We went

from presenting highly detailed written justifications

to presenting key bullet points on PowerPoint slides.

You also had only one meeting to present your case.

Over time we have moved from a 5-year to a 3-year

NPV [net present value]. We still use this macro-

level decision-making process today.

—Sharon Vincent, Director of Network Services

We were told to have confidence in our ability as we

exchanged and gathered information. For each applica-

tion decision, we spent a lot of time and effort trying to

prove that our systems were the best choice. We took

charge, and we were very assertive. I think all of these

interactions really helped us gain their confidence.

—Becky Robinson, Director of Systems

Management

We were to be assertive, yet not burn bridges. We

kept it professional.... And when an announce-

ment was made, there wasn’t a lot of animosity.

—Jon Jones, Director of Client Server Computing

The IT Headquarters Decision

The decision about the physical location of the consolidated

data center was not formally made until October 2000.

Sallie Mae had established measurable cost-cutting goals

with their merger consultants (McKinsey & Company), and

each side (Reston and Indianapolis) was charged with

developing a formal cost–benefit analysis for having the IT

headquarters located in their city. The cost advantages

became pretty clear: operating a consolidated data center

out of Reston, Virginia, would be much more expensive

than out of the acquired Indianapolis area facility.

• IT personnel costs in Indianapolis were estimated to
  be about 30 percent less than in the Reston area,
  which had become a mid-Atlantic Silicon Valley
  phenomenon.

(^7) The Washington Post, Sept 1, 2000, “Sallie Mae to Cut Staff 25
Percent”.