New IT systems built from scratch add functionality and increase
profit.
Britannia Building Society has boasted that it will save £100m
following a three-year overhaul of its IT systems.
The £50m business transformation and technology programme involves
40 projects and the introduction of 12 new systems, including
customer relationship management, imaging and workflow. The company
anticipates savings of £100m by 2009.
Analysts said Britannia's IT overhaul was necessary to reduce costs
and remain competitive in a market increasingly enabled by IT
innovation.
"Britannia has made a commitment to stay in the game. It is doing
what it has to do to stay competitive," said Duncan Brown,
consulting director at analyst firm Ovum.
He was sceptical whether Britannia could achieve the £100m target,
calling the estimate a "shot in the dark".
Under the IT overhaul, Britannia has replaced all its core systems
and integrated new systems with IBM Integrator and Websphere
middleware while avoiding downtime - a process Mark Gater, manager
of IS strategy and architecture, described as "like having a heart
bypass while running a marathon".
Its core focus included replacing the ICL mainframe with a Sun Unix
system and replacing a raft of bespoke applications developed
in-house. These applications were up to 18 years old, poorly
integrated, expensive to maintain and hard to upgrade.
The programme was built on an earlier Y2K project to update
Britannia's PC network and included the introduction of system
management software. The company has 192 branches, over 3,000 PCs
and "hundreds" of servers.
When the new systems, based on software from Fineos and Lynx, are
fully integrated, Britannia will have a single, real-time view of
its million customers. Gater expects "significant" revenue growth
through selling new products such as offset mortgages.
Experts said Britannia's approach to building IT systems from
scratch to support an offset service was innovative. Chris Jackson,
a director at Winchester White, an insurance industry consultancy,
said other firms simply bolted on functions for offset mortgages to
existing systems.
IT in mortgages
- Derbyshire Building Society's integration project cuts
processing times on some tasks from two days to just 10
minutes
- The Woolwich bank adds instant messaging functionality to its
website
- Nationwide aims to save £400,000 a year through a centralised
management system.