Westpac anoints preferred suppliers

Beverley Head
Wednesday, 13 October 2010 09:53

Business IT - Technology

IBM is sitting pretty as far as renegotiating its outsourcing contract with Westpac is concerned, while EMC, Cisco and VMware are in the box seat as far as Westpac's mid range platform is concerned.

During a briefing yesterday Westpac chief information officer Bob McKinnon made clear that IBM - which signed a ten year $2.3 billion contract with the bank in 2000 - had worked hard to redeem itself over the last two years, helping the bank improve its overall systems performance.

Mr McKinnon said that on joining the bank in 2008, 'The greatest challenge we had was stability of technology.' In 2007 the bank was experiencing 30 Severity 1 class incidents a month, essentially leading to a technology problem for which there was no obvious workaround.  'During the next 12 months we put in place a team and capability and investment programme to drive remediation, and rebuild process, and worked with IBM and Telstra on how we managed the technology environment with more discipline.'

Mr McKinnon said reliability had been progressively improved and in the three months to September the bank suffered nine Sev 1s. The latest one was on Monday when a circuit breaker in a call centre was tripped, leaving operators without technology until the circuit breaker could be reset.

A good part of the credit for that performance improvement should go to IBM according to Mr McKinnon; 'You can't have two or three Sev 1s in a month unless IBM are doing their job.  Same with Telstra.

'We set out two years ago to form a view whether we should rebuild our IBM relationship because it wasn't in great shape two years ago.' Mr McKinnon added that; 'IBM have been very proactive in helping us with stability and rebuilding the relationship - that work has gone well and as we get to the end of the contract that improvement makes it a lot easier to work our way through the consequences of that contract which is currently due to expire around April next year.'

While Mr McKinnon didn't formally announce IBM had won the contract, the entrails look positive.

IBM is also one of a panel of four service providers which is providing India based skills to the company along with TCS, Wipro and Infosys. Over the last 12 months these organisations have supplied an additional 1200 people to work on Westpac projects as the bank would have struggled to find the mix of skills in the local market according to Mr McKinnon.