The Commonwealth Bank of Australia has dumped an exclusive legacy technology systems deal with outsourcer EDS in favour of a three-way split between IBM Australia and Indian companies HCL Australia and Tata Consulting Services. It is the first time the institution has outsourced work to Indian IT companies that have invested heavily in setting up operations within Australia aimed at securing financial services work.
"This is utility work, we want our people to be doing high-value," CBA group executive for technology services Michael Harte told The Australian Financial Review. "We will retain applications development [within the bank]."
In a statement, the CBA said it was pursuing a panel arrangement where the three new companies bid against each other to secure work in a means to "achieve greater contestability" from its suppliers.
The major banks have been publicly flagging upgrades of their technology systems for at least two years.
Australia and New Zealand Banking Group chief executive Mike Smith this week said he intended to ramp up existing operations in Bangalore to reduce costs and improve service.
So far the CBA has shed more than $100 million in operational IT costs over the past two years, money it has reinvested internally in its own technology including customer platform CommSee, trading platform CommSec and a re-engineered internet banking facility and website.
The new deal was expected to involve around 80 EDS positions within the CBA and some staff were likely to be offered positions with the new companies.
EDS was tipped to keep some of the CBA's applications work after retaining key infrastructure contracts worth $935 million across five years earlier this year.
The technology company's appointment of former Westpac IT and operations chief Michael Coomer to the specially created position of global head of financial services three months after he left the bank has apparently rattled clients and his former employer.
Fairfax Business Media
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