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"If you have to ask how much it costs, you can't afford it." That admonition from J. P. Morgan might himself have been appropriate for yachts, mansions and works of art (he said it about yachts), but in today's banking environment, the managers at the bank that bears his name are not about to be so brusque when it comes to technology decisions--despite the old man's portrait glowering in the hallway.
So when it came time to upgrade one of Morgan's three global communications networks, executives at the money center not only asked about, but indeed haggled over the $20 million price tag. It must have worked. Morgan inked a five-year deal with BT North America Inc. that will save the bank an estimated $12.5 million over the system's lifetime. A key incentive to the deal were contractual promises by the vendor regarding the network's availability and reliability. Those promises, or service level agreements, will result in financial penalties to the vendor, should the benchmarks of the contract not be met.
"It's one of the elements that made us comfortable and allowed us to sign this agreement," says Morgan vp Thomas F. Hynd. The five-year deal will replace one of Morgan's three existing networks, and it calls for BT to link 26 Morgan offices in 14 countries via the vendor's Global Network Services. Both the BT network and the one Morgan is phasing out rely on the CCITT's X.25 protocol, although Morgan's network had been installed in 1986 and was due to be replaced. "We were at a stage where we were looking comprehensively at all the communications capabilities we have around the world," says Peter A. Miller, a managing director with Morgan Guaranty Trust Co.
The network connects computers in branch offices to one another, as well as to the bank's corporate data centers in Delaware and New York. It was only last...