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.