
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, March 4, 1992                   TAG: 9203040043
SECTION: BUSINESS                    PAGE: A7   EDITION: METRO 
SOURCE: MAG POFF BUSINESS WRITER
DATELINE:                                 LENGTH: Medium

DOMINION RETAINS DIVISION BANK TO DO OWN DATA PROCESSING

Dominion Bankshares Corp. on Tuesday scrapped part of its plan to streamline operations, saying it has decided against turning over its data processing to an outside vendor.

The company had announced in January that it would study the possibility as part of a plan to make the bank more efficient and trim 500 jobs.

But Dominion Chairman Warner Dalhouse said each of three vendors who studied the operation concluded in independent reports that Dominion could not save money by the move.

Dalhouse said companies that specialize in data processing usually are able to cut costs by introducing efficiencies to management information systems. All three vendors determined that Dominion's data processing already is as efficient and productive as possible, he said.

As a result of the study, however, Dominion will "unbundle" the division that develops applications for its computer. The division is composed of people who write software programs for the bank or modify computer software purchased by the company.

Dalhouse said Dominion will, from time to time, invite outside vendors to help write software for special needs. The programmers and systems analysts, however, will remain employees of the bank.

The decision means that Dominion will retain flexibility and full control of its operation, Dalhouse said. It also avoids disruption, he said.

Another reason to retain the operation was that the outside vendors wanted 10-year contracts.

Dalhouse said management information systems change rapidly, so the bank didn't want to be locked into a decade-long agreement. "You just can't see that far down the road," he said.

by CNB