Ending Balance

Although Vanguard undertook this integration project primarily to improve customer service and achieve channel parity, the project is reaping impressive savings. "In cost savings alone, this will have paid for itself in three to three and a half years," says Buckley. Savings from straight-through processing and lower systems maintenance costs are expected to add up to $30 million annually. Integrating systems is also likely to generate revenue. By improving service, Vanguard can increase customer loyalty, an important advantage in the turbulent market. Early results are so promising that Buckley says he should have done it sooner. "It would have been great to do it concurrently as we built out the Web," he says.

Although the price tag on this project was undeniably large, Brennan believes it’s been a wise investment. While Vanguard wouldn’t specify the overall costs, with the annual operating cost savings of $30 million, the internal rate of return is more than 20 percent. "There are a ton of benefits, but it’s not cheap. You’ve got to be pretty confident that you’re going to get a good ROI on this," he says. "I’m a numbers guy, and I’m very confident that we’re already getting very good ROI on the Web broadly and on the integration effort as well. The integrated channel concept is absolutely core to who we are, and will be forever."