A major IT redevelopment at National Australia Bank, scheduled to be tried out first at the NAB-owned BNZ as a testbed for international implementation, is behind schedule and said to be hugely overrunning its budget.
The development, known within the two banks as Integrated Systems Implementation (ISI), is essentially a deployment of SAP, to cover human resources, financials and procurement, though banking analysts reported in the Australian Financial Review are not confident the procurement module will ever be deployed.
In June this year a source at the BNZ told Computerworld that the system was having difficulties, and lamented the fact that the New Zealand bank was being used as a “guinea-pig” for the project. He later backed down somewhat, saying problems were not major. BNZ spokespeople said there were no problems with the development other than the normal glitches to be expected in a project of that size.
Contacted again last week following the AFR report, the original source said he is no longer connected with the ISI project, but understands it is running well and in its final testing phase. “All [IT] stuff runs a bit over cost,” he says.
Approaches to the BNZ for comment brought a reply from Melbourne-based NAB spokesman Brandon Phillips. “In April, we confirmed that the ISI project was behind schedule,” he says. The project consists of “a number of modules” which were each having to be examined to make sure the costs and benefits stacked up.
Phillips will not comment on cost overruns, claiming that the final cost of the system will not be known until it is completely implemented. The justification of any cost figure depends on the benefits forecast to accrue from the implementation, he says, and to NAB’s knowledge, that analysis still comes out on the positive side.
Why has the bank decided to implement here first? “Any implementation needs to be started in one place and New Zealand seemed appropriate,” he says.
The AFR, having previously suggested the cost of ISI had mounted to $A800 million, now says another $A200 million has been added to the cost. Phillips declines to comment on the figures.