Shearson Lehman Hutton's ADP FS-Partner Rollout Is Well Underway

Shearson Lehman Hutton Inc.'s rollout of Automatic Data Processing Inc. FS-Partner broker workstations is well underway, with 12,000 already in place, says Mark Lieberman, vice president in charge of branch automation at the firm. Another 4,000 terminals will be installed by year-end.

As the ADP workstations are moved in, the Quotron Systems Inc. terminals used by Shearson and the Bunker Ramo terminals used by Hutton are moved out. In 1983, when Lieberman was transferred to Shearson from parent American Express Co., the firm had only 350 offices and 5,500 brokers.

In 1986, Lieberman issued his request for proposal for a new broker workstation, a competition won by ADP. The contract was signed in mid-1987. By the end of the year, the $1 billion Hutton acquisition increased the number of branch offices to the current 450 with 10,000 brokers, or financial consultants as they are now called.

ADP had the best price of the six competing vendors, says Lieberman, who claims that average monthly cost per user is about $160, just about the same as the old Quotron terminals.

The Shearson/Partner uses the 386 IBM PS/2 Model 55SX with a five-color display and no disk storage. All disk memory storage sits on an IBM PS/2 Model 80 server connected to broker workstations via local area network. "You can order disk," says Lieberman, "but we don't recommend it. That way the user doesn't have to manage a media. We prefer that the user just use the applications."

The keyboard has eight function keys for screen display options. Brokers can switch from market data to any one of a number of applications tools, customer information, or office functions.

Says Lieberman, "If the broker wants retirement planning, he hits the soft key for retirement planning. The command goes to the server and brings the program to the user station PC on the LAN." The server handles communications links, stores files and controls laser printers.

The system uses three separate communications paths:

One-way satellite transmission of news and real-time market data from ADP's Mt. Laurel, NJ, uplink to the 1.8 meter dish antennas at branches;

Multiplexed land lines for interactive retrieval of customer, product and bookkeeping information from the ADP Information Systems Center on Greenwich Street, Manhattan;

Local area network transmission for retrieval of applications software from local servers.

Brokers can choose from a wide variety of applications: portfolio analysis, commission calculator, bond calculator, retirement plans, spread sheet, word processing and mail merge.

Lieberman spent a lot of time studying brokers at work before designing the system. His group visited half a dozen branches to study "what people do, work flow diagrams, and job descriptions," says Lieberman. The resulting reports were reviewed by branch and operations managers before they went through another round of input. "We did it six times and had a pretty good set of documentation."

Observing focus groups from behind a one-way mirror, Lieberman used professional moderators to probe brokers on their work habits. "The results came back pretty consistently and that's what went into the requests for proposals," says Lieberman.

Shearson's 48-workstation lab at Greenwich Street tested the ADP workstations and servers for quality assurance. "We test functionality, performance, communications response time and line utilization to make sure we are not overusing the communications circuits. If other firms don't have testing labs," says Lieberman, "they should."

Eventually, Lieberman wants to move more of the customer data from the central host computer out to the branches. Today, the entire system uses 30 percent of its capacity at top speed and there is room for expansion. "We have one system for all our branches so we can develop from one platform. If you split up the company, you are developing from multiple platforms."

The order routing system still operates by wire from the traditional cage, but "brokers are starting to put orders in through the partner system directly from their keyboards."