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Dollars and sense

Dollars and sense

Russell Jones, head of group technology at ASB, talks about the learning curve of working in a new industry, and why ASB’s first-mover advantage in internet banking is no excuse for complacency.

The air on the 28th floor of the ASB Centre in Auckland’s CBD seems thinner than it does at street level. At the time of our interview Russell Jones has been head of group technology for the ASB Group of Companies for just six weeks. His new office is about as far removed from the daily rough-and-tumble of IT operations as it’s possible to get; more luxury hotel suite than server room or data centre. And there are indications that the occupant is still new to his role: Framed pictures leaning against the wall; a child’s doodle on the whiteboard.

Jones has a cup of tea in what looks like a pint mug with ‘Memphis, Tennessee’ inscribed on it. He has just spent a five-year stint in the southern States. “Memphis is an interesting place,” he says, with characteristic reserve. “It’s not nearly as cosmopolitan as Auckland.”

Nevertheless, he says he and his family enjoyed their Tennessee tenure while he was working for International Paper, with the opportunity presented to him to work at the ASB coming as quite a surprise, he says. Prior to International Paper, Jones was chief of information technology at Carter Holt Harvey. “It came through a head-hunter. And initially I thought, ‘Manufacturing to banking? There’s no way it’s going to happen.’ But it was a very interesting and thorough interview process and at the end of the day it worked out. I’m very pleased it has.”

Mind-shift

The biggest challenge Jones faces is transforming himself from a lifelong career in manufacturing — the paper and forest products industries — to financial services. Having to find his feet in a radically new field would seem daunting to most, but Jones says he has the advantage of perspective over a CIO who has always worked in banking.

He confesses that he hasn’t had much of an opportunity to acclimatise himself to his new environs yet. “I try and get out to the C:Drive facility, which is amazing, as much as I can. We’re very lucky to have some talented and innovative people working there.” C:Drive is the ASB’s development centre in the Auckland suburb of Albany; a $20 million multi-use facility built over nine months and completed in 2002. Jones also intends to spend time at Sovereign House, which has nearly 800 staff and is the latest landmark building to open at the Smales Farm Technology Office Park in Auckland’s North Shore City.

He doesn’t underestimate the challenges facing him. After 20 years learning the nuances of the paper industry — from the names of suppliers, competitors and various areas of industry specialisation — he acknowledges he has no frame of reference in banking, other than as a consumer.

“I know what insurance is because I buy it and I know what a bank is because I go to one, but I don’t know it from the inside. People say things to you and you have no context. So you actually have to listen to everything, take it in at face value and then go away and try and calibrate it.”

Jones had thought the IT industry had the jargon market cornered, but has quickly discovered banking has created a whole new dictionary for him to digest. “I thought IT had the monopoly on three-letter acronyms, but financial services is right up there! Everyone refers to system names with three-letter acronyms and you’ve just got to learn them, there’s no shortcut through that.”

First-mover advantage

The ASB’s lead in internet banking and online security is a considerable handicap to its competitors. It introduced internet banking more than 10 years ago and a customer relationship that long might be considered akin to a marriage.

However, in spite of its online head-start, the ASB’s IT infrastructure is now dwarfed by that of the country’s biggest banking group, ANZ National Bank (the result of a merger between ANZ and the National Bank of New Zealand).

Research for this year’s MIS100 carried out in February 2008 shows ANZ National Bank at number six with 14,100 screens to manage; and the BNZ, at 15, managing 8638 screens; the ASB, in 18th place, at the time reported 8337 screens.

As of June 2008, Jones and Dave Freeman, ASB’s GM of technology operations, report that the number of screens has been reduced further, by 1822, to 6515. ASB’s IT shop consisted of 999 seats at the time the MIS100 went to press. Jones says that as of June it is 517 seats. BNZ’s IT shop has just 320 and ANZ National’s 500.

You would expect an important driver for the growth of internet banking to be a desire to consolidate infrastructure. Surprisingly, though, Jones says the ASB is opening new branches, rather than staking everything on virtual banking. He enthuses about the ASB’s new concept branch in the Auckland suburb of Albany, which he describes as the model of a new style of branch banking; with concierge functions, FastNet terminals inside the bank, tea and coffee machines and business-supporting ATMs that allow customers to credit deposits to their accounts rather than having to wait in line. “It’s about what you do with the technology. The amount of technology we have is a function of the staffing we have and our network — as well as what we have to do to support the customers.”

The ASB has around 5,500 internal users. FastNet has approximately 700,000 customers in the Classic and Business categories. But taking into consideration the unprecedented uptake of Kiwisaver and the bank’s wider investments in securities, you could credit the ASB with upwards of a million customers.

Industry-wide teething troubles connected with the implementation of Kiwisaver have been widely reported; with the head of the Investment, Savings and Insurance Association predicting it would cost the industry $10 million a month to manage the resulting information system changes. Jones acknowledges that Kiwisaver is a big initiative for the ASB, but says people have stepped up to meet the challenge. “Our team has done a fantastic job meeting very tight deadlines with some changing requirements, as the Kiwisaver process has evolved and as the legislation has been changed and modified.”

Caveat emptor (let the buyer beware)

Clearly Jones is now in a role that has a requirement for the demonstration of success in terms of satisfying the customer. In other industries, the biggest failing of IT is the slowness of CIOs to measure the success of their deployments and then demonstrate these back to the business.

But Jones points out very few projects are exclusively about technology, other than those that affect infrastructure; and even in those, the stakeholders have choices. Crucially, he turns the standard management response to IT on its head with regard to the level of corporate satisfaction with IT: “I’m not sure that it’s the responsibility of technology to prove that projects are working. I’d like to see it more the other way around. In a perfect world, you’d build the lessons you learn back into your methodology so that your thinking and your approval processes start reflecting the reality of the world you live in.”

Although his executive position might suggest that Jones won’t have to worry too much about receiving salespeople, he is still ‘visible’ to the vendor community. “I have vendors knocking on my door every day at the moment. Some of them are people with whom we’re currently doing business, and I’m more than happy to meet them and talk through what we’re doing and what they’re doing. Again, it’s about a partnership.”

He has little patience, therefore, for those who complain about IT vendors who oversell their ‘solutions’ while glossing over the risk to businesses of their product or service failing. “If you buy something on an ill-researched marketing blurb, that really is your own problem. It’s definitely a discipline. You can go completely over the top and have an RFP process that takes years and costs everybody so much money that it’s counterproductive. That’s at one end of the spectrum. At the other end is buying the blurb without

validating it, and the answer is clearly somewhere in the middle.”

Jones thinks the media’s coverage of IT and business issues leaves something to be desired, however. He would welcome more investigative reporting and media analysis — provocative positions that invite reader comment, rather than the simple reporting of facts and figures.

“The thing that’s always a challenge is pulling the insights out of stories. ‘So-and-so put in a new system.’ Whoopee. That keeps people up to date but how will that

translate into resources in the market, is that a shift in where people are going, is it a new kind of technology? It’s pulling together the pieces and making something bigger than the individual pieces. That’s where there can be huge positive outcomes from reporting, rather than just bland ‘X bought Y’ type of stuff.”

Fairfax Business Media

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