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Technology Horizons in Financial Services ANZ

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Technology Horizons in Financial Services ANZ s path to IT effectiveness Presentation to INSTO eScape Technology Conference 22 October 2002 Peter Dalton – PowerPoint PPT presentation

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Title: Technology Horizons in Financial Services ANZ


1
Technology Horizons in Financial ServicesANZs
path to IT effectiveness
  • Presentation to INSTO eScape Technology
    Conference
  • 22 October 2002
  • Peter Dalton
  • Chief Technologist, Consumer Business
    Technologies
  • Australia and New Zealand Banking Group Limited

2
Agenda
  • Technology is changing its focus
  • ANZs strategies
  • Outsource or Excellence?
  • ANZs current focus - improving our IT efficiency
  • Outcomes to date
  • The next wave of IT productivity improvements
  • Conclusion

3
Technology is changing its focus
  • IT in general has had a number of years of high
    investment and big projects.
  • Focus has been on Customer Relationship
    Management, new systems and new infrastructure.
  • Different companies took different paths in
    achieving their outcomes - outsource or in-house
    with a focus on operational excellence.
  • The world has now changed - IT is being asked to
    contain or even reduce spend. Project money is
    harder and harder to come by return on
    investment is key.
  • The new word is efficiency. How well can you
    reduce costs and not lose quality outcomes? What
    kind of productivity improvements can you get?

4
ANZs Strategy
5
ANZs Technology Focus
  • Putting technology to work to
  • Provide our customers with a personalised,
    consistent experience
  • Empower our customers and our people with real
    time information access and online applications
    via web-based technology, anywhere and anytime
  • Ensure our technology is robust, flexible and
    cost effective
  • Aggressively reduce costs, improving
    productivity, increasing straight-through
    processing, simplifying and automating
    administrative functions
  • Provide low-risk, high-efficiency
    state-of-the-art payment capabilities

6
Four years ago, we established the foundations
for technology and IT excellence
1998 Low satisfaction, inward focused, weak
process, complex infrastructure (compared with
best practice)
  • Starting in 1998 we made and delivered some key
    commitments involving People, Customers, Process
    and Infrastructure
  • People Alignment, collaboration team work.
    Environment where individuals can excel. Retain
    critical individuals.
  • Customers Customer feedback processes
    accountability, meaningful service levels, align
    with BU, implement TQM.
  • Process Consistent project management standards,
    strict criteria for new investment in
    applications, rationalise standardise
    operational processes.
  • Infrastructure Reduce costs, rationalise,
    consolidate automate networks platforms.
    Position for the future. Reposition back-end
    product functions behind integrated service
    front-end.

7
People Skilled committed
Management tertiary qualifications policy
Breakout cultural transformation workshop
  • pcs_at_home heavily subsidised packages for staff
    to acquire PCs

Online training courses
Half yearly staff survey with action teams to
address issues raised
Casual dress policy instituted
8
Customers Commitment to focus technology on
business unit objectives
Customer survey/ feedback process on 6 monthly
basis. Linked to individuals performance
measures.
Electronic timesheet capture for IT project
tracking, reporting billing
9
Process Commitment to improve execution
capability
  • Capability Maturity Model
  • Significant productivity quality improvements
  • CMM level 2 certification 1st Australian Bank
  • Bangalore, India - level 4 certification
  • Project management training
  • Generic training courses tailored with ANZ
    specific content latest Project in a Box tools

10
Infrastructure Commitment to rationalisation
standardisation
Core Systems
IP network
1998 6 major systems
1998 Multiple data networks
  • Single IP Network provides universal connectivity
  • Simpler systems platforms reduce cycle times

Servers Desktops
Platforms
1998 8 major platforms
2002
1998
2002
W2K
UNIX
MVS
  • Greater ability to leverage new technologies
  • Lower hardware, software licence fees support
    costs
  • Provide all staff with best tools possible
  • Low cost of ownership through standard solution

11
Outsourcing An important consideration in
achieving IT effectiveness
12
Core context has been suggested as a basis
for outsourcing decisions
Objectives
Execution Control
CORE Any process that contributes directly to
competitive advantage in target markets
  • Extend or create competitive advantage
  • Existing markets
  • New opportunities
  • Minimise disadvantage
  • Find someone else to do it for you
  • Look to create new opportunities advantages
  • Make a context process core
  • Internal
  • In-house
  • Strategic joint venture
  • External
  • Outsource
  • New venture

CONTEXT All other processes required to fulfill
commitments made to one or more stakeholders in
the enterprise
Source Geoffrey Moore, The Chasm Group
13
Three other considerations when making an
outsourcing decision
Cost
Innovation
Teamwork, collaboration service levels
  • How will outsourcing achieve competitive
    advantage?
  • What will be the impact on the ability to create
    innovative IT solutions?
  • How will open architectures new technologies be
    funded deployed?
  • Can you achieve at or near world class best
    practice?
  • Can you achieve efficient reliable services?
  • Are you willing to pay away a margin to an
    outsource vendor?
  • Are there impacts on alignment with BU customers
    ?
  • Will collaboration teamwork improve?
  • Will service levels decline or improve?

GST 10
Illustrative
Return on Investment 15-20
Margin you pay away
Sales Marketing 5-8
Outsource providers cost to serve
Cost of outsourced IT
14
Our outsourcing experience
  • What we have we outsourced
  • Property management
  • Components of procurement
  • Components of telecommunications
  • Desktop support/help services
  • Training development support
  • Components of legal services
  • Majority of functions are not outsourced, but are
    under periodic review
  • Major operations
  • Data centres and IT operations
  • IT development
  • Cheque processing
  • Cards back office

15
Outsource or excellence?
  • To date, no compelling opportunities have been
    identified for outsourcing a significant amount
    of our technology functions
  • But, we continue to actively benchmark our
    operations to best practice to ensure continued
    IT effectiveness review potential selective
    outsourcing opportunities

16
Agenda
  • Technology is changing its focus
  • ANZs strategies
  • Outsource or Excellence?
  • ANZs current focus - improving our IT efficiency
  • Outcomes to date
  • The next wave of IT productivity improvements
  • Conclusion

17
Improving our IT efficiency
Findings from a recent independent benchmarking
study on our server environments
  • Current environment is very efficient by Industry
    Standards
  • ANZ staff efficiency (staff numbers compared with
    number of servers) is very good to excellent in
    MVS, Unix and Wintel
  • Server utilisation is very high in mainframe and
    at, or above, industry levels in Unix and Wintel
  • Study conducted by IBM

18
Improving our IT efficiency
  • Attained CMM level 4 certification from the
    Software EngineeringInstitute (USA) for our
    India Software Development centre placing it
    in the top 1 of software organisations in the
    world
  • First Australian Bank to attain CMM level 2
    certification this was achieved by the
    International Systems Teamin Melbourne, placing
    it in the top quartile of softwareorganisations
    worldwide
  • To achieve this, we displayed a very high
    standard of processdiscipline in all areas of
    software development, includingthe rigorous use
    of metrics for tracking of quality of outcomesat
    all stages

19
Improving our IT efficiency some examples from
our continuous improvement program
  • Bar-coding at Output Services Increased
    productivity and cost savings, and reduction in
    operating costs.
  • Renegotiation of Optus inbound costs cost
    saving.
  • ANZ Common Disk Platform Review reduction on
    total cost of ownership.
  • Decommission the ANZPAC Service in Australia
    cost saving.
  • Mortgage Origination System (MOS) Navigator
    Support Tool One-off and ongoing savings.
  • Efficient, cost effective processing of Telstra 2
    Instalments

20
Outcomes to date
  • Focusing on people, customers, process
    infrastructure, we achieved
  • Better IT outcomes for our Business Unit
    customers
  • High IT staff satisfaction rate
  • High quality, more productive staff
  • Simpler infrastructure - robust processes
    supported by a continuous improvement focus

21
Outcomes to date - business improvements
Cost savings
Improved system robustness
22
Outcomes to date - business improvements
Operations, Technology Shared Services staff
satisfaction
Staff satisfaction
Customersatisfaction
23
Next Steps Cost leadership provides capacity to
reinvest in growth
Cost leadership
next wave productivity improvements
  • Continuous improvement
  • Componentisation and reuse of Technology
  • Straight Through Processing through
    reengineering and simplification

24
Next wave productivity improvements
25
Conclusion
  • Good progress to date on improving our IT
    efficiency through innovation, renegotiation,
    cost savings and new tools
  • Successfully rationalised and simplified
    infrastructure
  • Strong improvement in staff satisfaction
  • Improved and more consistent customer service
  • Increased robustness in systems
  • Lower costs
  • Now focusing on next wave of productivity
    improvements for technology
  • Continuous improvement
  • Technology componentisation and reuse
  • Re-engineering and straight through processing

26
Copy of presentation available on www.anz.com
27
The material in this presentation is general
background information about the Banks
activities current at the date of the
presentation. It is information given in summary
form and does not purport to be complete. It is
not intended to be relied upon as advice to
investors or potential investors and does not
take into account the investment objectives,
financial situation or needs of any particular
investor. These should be considered, with or
without professional advice when deciding if an
investment is appropriate. For further
information visit www.anz.com or contact Philip
Gentry Head of Investor Relations ph (613) 9273
4185 fax (613) 9273 4091 e-mail
gentryp_at_anz.com
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