SAP Performs Heart And Lung Transplant On Australian Bank - InformationWeek
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4/16/2009
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Bob Evans
Bob Evans
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SAP Performs Heart And Lung Transplant On Australian Bank

SAP Australia, bestowing anthropomorphic status on the old term "rip and replace," says it is performing a "heart and lung transplant" for Commonwealth Bank as it and Accenture replace brittle systems more than 40 years old. The new systems, SAP says, will let Commonwealth crank out new financial products "in days" instead of "in months and months and months."

SAP Australia, bestowing anthropomorphic status on the old term "rip and replace," says it is performing a "heart and lung transplant" for Commonwealth Bank as it and Accenture replace brittle systems more than 40 years old. The new systems, SAP says, will let Commonwealth crank out new financial products "in days" instead of "in months and months and months."SAP Australia managing director Tim Ebbeck says the overhaul will give Commonwealth "an absolute competitive advantage in the marketplace" and also flat-out states that the new systems will enable Commonwealth to take market share away from competitors. Here's how Ebbeck described the new capabilities Commonwealth will gain, according to an article on Australia's Business Spectator site.

What the Commonwealth Bank has done is they're the first of the four major Australian banks to embark on this project….

It's fair to say that for a bank to release a new product in the market place today, given some of the legacy systems they have, it can take months and months and months of reprogramming of systems to either pro-act or react to a market situation and the sorts of systems that we're working with the Commonwealth Bank on installing right now give them the ability to implement new products in market in days. It's that flexibility, of this lower cost structure of newer technology, that to me provides the benefits the bank's looking for and the value, which I won't go into in detail of course due to confidentiality, but the value that an organisation like the Commonwealth Bank sees in that is not just quantifiable in cost savings, but also in market penetration and market share increases.

The ongoing "heart and lung transplant," Ebbeck said, led by CEO Ralph Norris and CIO Michael Harte, will allow Commonwealth to "take market share by interfacing with [their] customers and transacting business in a far more flexible way and that is the core of what they're trying to do."

For SAP, Ebbeck told , the Commonwealth deployment marks a strategic move away from its traditional focus on back-office ERP projects and toward an emerging focus on end-to-end solutions:

So, if I could look at ERP as principally a back office capability, it opens the doors to front office capabilities and the whole end to end enterprise approach which is the hallmark of SAP's thinking in this area has come to the fore…. In the Australian market last year SAP had the biggest year that it's ever had in this neck of the woods and that was principally in large front office areas such as with the bank or with the Department of Education in New South Wales or Origin Energy or Australia Post, where we're undertaking massive transformation programs with them.

So, while the prospect of having your heart and lungs taken out and replaced can rattle even the most fearless CIO, look at the bright side: at least in the case with Commonwealth, SAP is promising incredible reductions in product-development time - from months to days - and comes very close to promising that market-share gains are part of the deal.

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