Nationwide Building Societyhas chosen
the latest version of SAP's banking platform as the technology core
of its £300mbusiness transformationproject.
The company plans to move away from building its own core
banking, savings and mortgage products on legacy Unisys and Fujitsu
mainframes to a
service-oriented architecture (SOA).
Darin Brumby, Nationwide's divisional director for business
systems transformation, said the five-year project, dubbed Voyager,
was driven by the need for greater
business agility.
The building society's current complex technology environment
would be unable to support growth plans, said Brumby. The new
system would enable it to react to changing market conditions,
increased competition and changing regulatory requirements, he
added.
"We are adopting SOA in the SAP model to be able to launch
products very quickly as we have seen others, like Deutsche
Postbank, use the technology to reduce lead times from months to
weeks, and from weeks to days. We are expecting a significant
return investment."
Brumby said that although there were risks in a transformation
programme of this size, particularly as this was the first time
this version of the SAP software was being implemented in the UK,
there was also a first-mover advantage.
"We have good plans to mitigate the risks and have done very
hard due diligence on the software, making sure it is fit for
purpose and that we know where the gaps are. We recognise we are
the first, but we are mitigating that by upskilling internally and
we have top-level relationships with SAP to get the job done."
Brumby said Voyager was a timely response to the challenges all
major banks would face sooner or later.
"This is a good time to be doing this for us. It is not a
knee-jerk reaction, but an activity that has been planned for the
past two years."
He said Voyager was "not predicated on headcount reduction", but
there would be some redeployment as the building society reshaped
itself to deliver new products.
The first phase of Voyager, due for completion in the fourth
quarter of 2008, will cost about £166m, with £100m covering the
software and hardware costs of setting up Nationwide's new banking
platform.
The second phase will see the release of new savings products
and teller systems for branches, and the third phase will focus on
mortgage products.
The three phases will run concurrently at times, and the whole
project is scheduled for completion by 2012.
Nationwide has not yet made a final decision on its new hardware
platform, but Brumby said it was considering IBM's
P-series and
Z-series hardware.
He said the building society had evaluated several banking
packages from big software suppliers such as I-Flex, Fidelity,
InfoSys and Temenos, but had chosen SAP for Banking because it was
"the best functionality fit" and a mature product.