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It's all systems go at merged banks

It's all systems go at merged banks

Westpac pumps $338 million into integrating its information systems with St George Bank's following its $12.2 billion acquisition of the former rival.

Offering a first glimpse at its future computing plans, Westpac Banking Corp said yesterday it would pump $338 million into

integrating its information systems with St George Bank's following

its $12.2 billion acquisition of the former rival.

The company also said it expected to finalise a new information

technology strategy by the end of March and that it would begin the

task of consolidating the merged business's major information systems

from October.

Work is already under way hooking workers at both banks up to common

email and networks, but the heavy lifting will not start until the end

of the year when Westpac starts integrating its data centres and

customer management software with St George's.

The scheme was outlined in a merger briefing from the bank's chief

transformation officer, Brad Cooper, yesterday, shedding new light on

what is sure to become one of the country's most expensive and closely

watched IT projects over the next two years.

The activity will account for a little over half of the $700 million

that Westpac has said it will cost to execute the acquisition and

integration of St George, and it is also regarded as the most risky

aspect of the banks' marriage.

According to figures published yesterday, the integration will save at

least $29 million a year in information systems and infrastructure

costs as Westpac takes advantage of its stronger buying power.

Additional IT savings are likely to flow from outsourcing and job

cuts.

Many details of the integration program remain unclear, however, and

Mr Cooper indicated that the bank was working to finalise a new

information technology strategy by the end of March.

In the interim it would continue to focus on recruitment for the

transformation as well as critical projects.

Westpac has already bolstered its information technology and product

teams with a spate of hirings over the past few months, including the

recruitment of a number of senior technology executives from

Commonwealth Bank of Australia.

Westpac's recently appointed chief information officer, Bob McKinnon,

is a former technology boss at the CBA and staff he has hired include

executives who worked on its highly regarded $250 million CommSee

customer software platform.

Changes that have already taken place include a restructure of its

information systems division, which will operate across all banking

and wealth management divisions at the merged company.

According to Mr Cooper's presentation, from April next year Westpac

will start moving its own and St George's staff onto common finance,

human resources and risk management systems. Major information systems

integration would follow from October.

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