The bank is hiring contractors from India to help it plug skills gaps in its IT department and provide support for new IT projects.
Gary Barnett, IT research director at analyst firm Ovum, said Abbey had a good track record in IT investment. The bank had fewer legacy systems than some of the larger high street banks, such as Barclays and HSBC, which will make it easier to integrate with the IT systems of another bank following any merger, he said.
Abbey plans to reduce the number of its datacentres from nine to two by the end of 2005.
Over the past two years, Abbey has shut down four datacentres in an effort to consolidate its Intel-based hardware using Unisys ES7000 servers and blade servers, which take up less space in the datacentre.
The consolidation will allow Abbey to reduce by 35% the number of Intel-based servers it operates. The consolidation has also been driven by non-technical requirements, including a desire to reduce the property portfolio.
Virtual call centre
Abbey is also developing a virtual call centre running over its IP network in a bid to improve its customer service.
Abbey has deployed an IP- based network to support banking services, customer relationship management and IP tele- phony as part of the bank's £125m refresh of its branch networks. The IP network was completed in October 2003. Abbey is now rolling out applications, one of which is a virtual call centre, which will enhance business continuity provision and improve the flexibility of its customer service.
Abbey aims to standardise its call centre technology to allow its agents to work from any location. The project, due to be completed by the end of 2005, will also support the new business structure of the bank.
"The holy grail is to enable any agent in any location to support the customer," Bill Gibbons, director of technology services and support at Abbey, told Computer Weekly earlier this year.
"As part of this you can enhance business continuity and disaster recovery because you can spread all your calls and ensure there is no single physical point of failure."
Savings from the call centre overhaul are likely to be £10m or more, in line with those achieved with other large IT projects.
Other benefits of the new call centre infrastructure include a simplification of IT, which will improve service levels; easier integration between applications; and being able to respond more quickly to the demands of the business.
The new call centre system will be run as a managed service and use a virtual private network from BT Transform, which was installed in just five months last year.
The internal telephone network is also being replaced by IP telephony running between branches over the VPN.
Abbey has been increasing the number of Indian IT contractors it employs.
Only a few hundred have been used so far, although Abbey has the option of increasing this to cope with spikes in demand for IT development work. Indian staff can be employed both offshore and in the UK.
In 2002, the bank signed an outsourcing deal with Infotech, under which staff at its software development centre in Bangalore would help the bank deliver large-scale IT projects.