FRAMINGHAM (04/05/2004) - With some 80 mergers already behind them, the I.T. executives at First Union Corp. knew that the CoreStates acquisition boded trouble long before it made headlines as a customer service disaster. Then-CEO Ed Crutchfield had paid a whopping US$17 billion (5.3 times the book value) to buy the Pennsylvania banking franchise in late 1997. And that meant First Union would have to deliver some spectacular cost savings in short order to prove to Wall Street that the deal made sense. For IT, that pressure to slash costs translated into not enough time to plan or execute the conversion of CoreStates' customer data onto First Union's systems. Some applications weren't even tested before they went live. To make matters worse, layoffs at the branches left the remaining tellers stretched too thin as they floundered to learn the new technology.
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