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Monday, 05/18/2015 6:52:37 AM

Monday, May 18, 2015 6:52:37 AM

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GE Spin-Off Synchrony Financial Builds Tech To Support Growth Plans
By KIM S. NASH 5:17 pm ET May 14, 2015
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Creating a technology group from scratch isn’t as straightforward as you might think. Carol Juel, CIO of Synchrony Financial, has hired hundreds of IT staff to build technology infrastructure to prepare the $12.2 billion credit-card issuer to separate for good from parent General Electric Co.GE -0.51%

GE spun out Synchrony last July, as part of a plan to divest its financial services businesses and focus on industrial manufacturing. Synchrony is expected to separate fully from GE this year, after the Federal Reserve assesses whether the company can stand alone, without GE’s operational support.

To get there, Ms. Juel has had to hire 250 to 300 IT staff, to supplement the 295 who came from GE. The team is building networking, security and analytics infrastructure to accommodate growth expected in part from mobile and online initiatives. GE has provided temporary IT services for the last 10 months, under a contract due to expire in July 2016. Synchrony would like to end the contract sooner, by February 2016, and is working to get all systems in place by then. “This is a large logistics exercise,” said Ms. Juel, a 10-year GE veteran and CIO of the GE unit that became Synchrony since 2011.

Synchrony’s IT group has bought or built new treasury, tax, human resources and other systems once shared at GE, for example, as well as outfitted two data centers in a co-location arrangement with a vendor in the Western U.S. This work goes on as Synchrony continues to provide credit-card processing to customers such as Wal-Mart Stores Inc.WMT +0.66%, J.C. Penney Co.JCP +6.47% and Gap Inc., and gradually transfer them to Synchrony’s own systems.

“There are a lot of nights and weekends,” Ms. Juel said. Transfers are usually done during times of low sales volume — Saturday night, into Sunday mornings or after 1:00 a.m. on Tuesdays, she said. Four of Synchrony’s 19 biggest retail customers have been converted since February.

Simplicity is one of the biggest opportunities in starting a brand new IT operation, said Bobby Cameron, an analyst with Forrester Research Inc.FORR -0.15% Legacy systems built up over time can be “a boat anchor,” Mr. Cameron said, requiring special staff to support them and inhibiting the integration of emerging technology.

Establishing a close relationship between IT and non-IT counterparts may be easier at a startup, Mr. Cameron said. “Because of a clean slate, they have options established companies don’t have,” he said.

Part of the pitch Ms. Juel makes to job candidates is playing up the unusual situation at Synchrony: a startup creating its own business processes, but already with more than $12 billion in revenues. “We’re birthing what will be a Fortune 500 company,” she said.

Ms. Juel has brought in more modern technology than the company used as a business unit of GE. The cloud figures prominently, she said. For example, Synchrony uses HR systems from Workday Inc.WDAY -0.85% Synchrony is a simpler company than GE, focused on one business, she said. “Starting fresh, we wanted to do minimum customization because our employee base is not that complex.”



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