Loughborough Building Society is poised to transfer the
management, maintenance and technical support for all of its core
banking systems to Skipton Building Society, after signing an
outsourcing deal with Skipton's IT bureau Mutual One.
Under the deal, IT responsibility for Loughborough's mortgage
and investment business, finance ledger and branch cashiering
systems will all pass to Mutual One. It will also replace all of
the society's desktops across its three branches and head office
when its takeover of Loughborough's IT function is completed next
spring.
Derek Bond, general manager for IT at Skipton, said this was the
first time Mutual One had signed a complete IT management contract.
The agreement meant that the IT bureau now accounted for about 15%
of Skipton's pre-tax profits, he added.
"In the past, clients would procure and refresh PCs and have
their own network and routers, but with this deal we do everything
for Loughborough. They do not have to worry about the IT helpdesk,
the refresh cycle or lots of other associated
responsibilities."
In terms of IT, only Loughborough's telephony system and the
management of its website is set to remain under the society's
long-term control.
Stephen Peete, chief executive of Loughborough, said the
decision to outsource its IT function was primarily driven by the
risk involved in keeping IT in-house.
"As the CEO of a building society, I do not enjoy running an IT
business - and with our internal IT department, we were running an
IT business. It concerned me how vulnerable the society was to a
loss of knowledge.
"As technology has become more integral to our business and more
complicated, the board decided that the risk was not
sustainable."
Skipton has offered IT bureau operations for 12 years. It
developed its integrated core banking system using Jade, an
object-oriented software language.
With the IT overhaul, Loughborough will become a Microsoft and
Jade shop. Its desktops will run on Windows XP, backed up by a
Microsoft datacentre, and all of the core banking systems will run
on Jade. Its servers are all Unisys ES7000s.