CIO insight Suncorp group executive for business technology, Jeff Smith, previously the CIO at Telstra, joined the company in 2007 and has had his work cut out for him integrating the group's systems following the multi-billion dollar merger of Suncorp and Promina.
Jeff Smith (Credit: ZDNet.com.au)
He tells Business Spectator's Tony Boyd about the the challenge of integrating a number of cultures and brands, usage of the agile management system, and his approach to the task at hand, despite uncertainty over whether the banking side of Suncorp will be sold.
Jeff, the largest major organisation you worked for was Telstra. How is working for Suncorp different from that?
Well, I think both industries ... you know IT is core to the operation of the businesses, so I think that's the common element with significant assets that are used in the front end for customer management as well as back-end systems for transaction processing. To me, banking financial services and telco are very similar in that aspect. I'd say probably the difference for me personally is I think, you know, reporting to John as a peer on the executive committee and working with the board.
That's John Mulcahy the chief executive?
Yes. It kind of brings the importance and the prominence of IT as being integral to running all the business segments and that would be, I'd say, a difference.
Now, there's been a lot of publicity about the integration project, which is crucial to bringing Promina together with Suncorp, but the scale of what you're responsible for goes beyond that one project ...
Promina was really a collection of multiple cultures and multiple brands, you know, from AAMI to Vero to Just Cars. There were a number of brands and companies, so ... it was more than integrating two cultures and systems and technologies and people, it was multiple cultures having to come together, so we had to develop one new operating model in IT and we brought all of the IT personnel under one group that we call 'business technology'.
Now, the business case behind the integration as a whole, I won't try to separate IT out of it because it's all done as one business case, was originally to spend $375 million incrementally in capital and get $225 million in recurring savings by the end of year three.
After our first nine months with it, we saw that our Synergy savings were going higher than we originally predicted and we put out a re-forecast in January that we would hit the $225 [million] savings by the end of year 2, but that we would hit $325 [million] by the end of year three.
So I think the thing that we did really well was rather than say here are IT projects, just go consolidate stuff and then here are business projects, we said well let's look at a business project and it has IT elements and it has business elements and let's prioritise the highest return synergy projects we can find and so that's what we did. That's what we've done.
And we have a number of projects from infrastructure to applications development, so we've just completed a big portion of the infrastructure projects which were to consolidate our mainframes in our mid-range platforms into, you know, consolidate those together as well as our IP networks as well as storage as well as roll out a single desktop across our entire company. Now, we've done that in Australia. It's about 9,500 new desktops on top of what we already did historically in Suncorp, but you can go on any campus in any Suncorp facility and you can log on and access any of our systems, our collaboration environments and it's all, you know ...
In one directory?
In one directory. So it's all Exchange 2007, Office 2007, SharePoint, all up to date and in fact what it enables us to by having really a very standardised environment where we used to pay to have BCP facilities available where you're paying for ... You know you're paying a reservation fee as well as infrastructures as well as networking because we are running the same environment in every one of our facilities.
We can set up a call centre floor in any facility we need, so if we have BCP type of issues, we can use our own existing campuses to support ourselves. So that's just a side benefit. So we finished Australia, all on Active Directory and Exchange. We're 60 per cent through New Zealand, but we're 100 per cent complete with the mainframe consolidation and mid-range consolidation.
It's no secret that you're using the agile management system to achieve all this. Could you just talk about that as a method for managing these sorts of projects?
JS: Yeah. The agile management system is in contrast to what I would call waterfall systems where you try to do all the planning up front and then you start execution and then react to problems late in the cycle. This is ... You know you take a look at analysis, design and development all together and you run a very disciplined management system in what we would call stand-ups that we do every morning on every project to take a look at what was done the day before, what the plan is for today, what roadblocks do we eliminate and then weekly retrospectives on projects. And we use visual control systems for taking a look at progress.
Rather than looking at just for 60 per cent through a project because we've spent the money or we've said well there're three months for design, there are progress charts in agile that are called 'velocity charts' and you really are looking at how many components you've completed. So for instance if a project had 100 points and it was ten months, you'd want to see a velocity of ten points a month, so we are actually tracking actual deliverables as opposed to just time and it gives us a much better, accurate projection as to how far along we are.
But the visual control systems are easier to manage. We use story cards for doing requirements rather than thick just English documents of requirements definition and story cards are very visual. Business people can look at them, move them around. You can prioritise them. And those are just ... Agile methods have probably nine or ten basic methods underneath the umbrella and we've kind of ... We've taken it very seriously as part of our overall change management program to have one program, make sure our people are trained effectively on it and put a curriculum together and make sure that it's sustainable, that it's not a just one-off for a few projects, that's it's the way we want to do work.
Right and I believe you've been talking to a number of universities to get the agile sort of system and all its competencies put down in a curriculum that could be offered to your own staff as well as other people.
That's right.
Which universities and how might it work?
We've talked to a number of universities in Melbourne, Sydney and in Queensland. The one university that has actually physically helped package some of the curriculum we've built and taught courses is QUT and they taught nine courses last month on different methods in the agile program, and our desire is for this not just to be for us.
We want this to be available to other companies and we've had a lot of interest from other companies that have asked if they could include their people in our training programs, so we have a vested interest to make sure the universities take it seriously because we would like to offer ... we would like them to certify it as a degree program, so to draw more students, undergraduates in, but we also like them to keep the content up to date and stuff to offer it, you know, to industry professionals as well.
And I believe it involves a lot of computer-based training [CBT].
It does and we've worked with a company called SkillSoft which is I think a Canadian company, but they have got certified programs that are CBT that cover most disciplines. Where there have been gaps, we've developed our own curriculum, but we are developing a role-based curriculum and our goal is to have 70 per cent of our training CBT, 30 per cent instructor-led and for the instructor-led those would be agile-specific curriculums that we worked with the universities on.
Just to put into monetary terms, how much would the cost of training an individual in one year would come down?
Well, historically, if you take a look at going to any professional courses whether it's, take a Cisco course, an average daily cost of taking a Cisco course is anywhere between $1,500 and $2,000 a day. Now, most companies in Australia, most companies globally would budget $1,500 to $2,000 per employee per year for training.
Well, that just shows you you're not going to get much training, so by combining CBT and licensing that content from SkillSoft as well as developing our curriculum and having the universities package and do the training for us, we can take onsite training down to about $125 per student per day and the CBT training is ... the magnitude's less than that. So it's a combination of both that gives us the capacity for people to chart their own course in the pace that they want to take their training at.
Yeah and I believe a feature of the agile management system is people working in small teams and that one outcome of your small teams is a new mobile banking platform. Is that right?
That's correct. We launched Australia's first web-based mobile banking platform and if you were to start from the beginning and used traditional methods which would have been planning it all out up-front before you started anything, the cost numbers one would have skyrocketed and you wouldn't have had a demonstratable testing artifact to say, you know, is this going to work and in a lot of cases you probably wouldn't do it because your estimates would be high. Most mobile banking platforms, companies would spend between $30 million and $50 million to build.
We didn't have that capital and we challenged our internet banking group to come up with a different way of solving this and we were lucky to have varied backgrounds. We had people that are in our internet banking group that have come from call centres. We've had university students and they've come with an engineering background and we've had university grads that have come from working at networking companies like 3 Network and so we had expertise around handsets, around software engineering and around customer and usability and what they figured out was and on their own time built our own mobile banking platform without licensing any software or paying external services to do it and we launched that back in July as Australia's first web-based mobile banking platform.
We have to do work to make that available for any handset, so the great thing about it is it uses ... It's just as secure as our internet banking platform. It uses the same security, identity and access management, but at the same time it dynamically provisions the content based on the resolution of the screen of the handset that's there so we don't have to do testing and downloads and certification of applications onto different mobile platforms. It really is quite an elegant platform.
Just finally, there's been a bit of uncertainty about whether the banking side of Suncorp might be sold, that it looks as though for the time being that's not going to happen. So where does that leave all the projects you're working on? Is it business as usual now?
Yeah and I mean the integration program is still going strong ... and wealth, of course, was included in the integration program because we brought Asteron over and that was a piece. So the bank is really the only piece of the business that didn't have integration projects, but it did have a number of Basel II projects, internet banking projects, any money laundering projects and in fact we're just completing in December the transaction fraud, transaction monitoring part of AML for the wealth business, and for the bank in February, and we used our agile techniques to do that.
The cost of doing that was about one-fifth of what we originally projected and our project manager from the retail banking was given a trip to go to Paris for our software platform provider, which is Norcom, which provides that platform for most of the banks here, as the most efficient AML implementation globally and that was done using agile methods.
But, so it shows you, it's the same software that everyone else is using, but by using different methods we could do it a lot more efficiently than we would've historically done. And we needed to because every bank, no matter what their size is, has to meet all the compliance obligations.
This article by Business Spectator's Tony Boyd is reproduced on ZDNet.com.au courtesy of a reciprocal publishing agreement.
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