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In concluding that the process of experimentation test is
satisfied, we believe the activities in the development of the SBS
system should be examined in toto, rather than separately. The
activities were interdependent and built on each other.
Separately, the activities were of no utility.
The SBS system was an innovative effort that had the potential
to result in substantial efficiency and significant economic
benefit to Norwest. McKinsey & Co., Inc. (McKinsey), which was
hired by EDS to conduct a valuation of the SBS system for Norwest
in September 1987, found that SBS would provide better cross-
selling of products to customers, improved relationship pricing,
and the completion of backlogged development projects. McKinsey
concluded that these improvements would result in an increase in
pretax profits for Norwest of approximately $24 million for its
retail banking business. Further, it was believed that Norwest
would save approximately $6 million in data processing expenses as
a result of the use of fourth-generation technology tools,
integration, and business model design. Finally, another $1
million in pretax savings would result from better collection
procedures and personnel productivity. The McKinsey report stated
that "the system's major value will be allowing banks to develop
innovative products and target their customers more effectively.
Maximizing these capabilities gives a participating bank a clear
advantage over its bank and `near bank' competitors." McKinsey's
findings were unchallenged by respondent and lead us to the
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