to implement, but thought that ‘once implemented you get a highly configurable system’. The aim at this stage was to be able to switch off Nationwide’s old Unisys platform by 2015. The project at Nationwide continued through 2012


and there looked to have been a somewhat reduced scope. However, by mid-year the building society was planning to launch a new type of current account later in the year on version seven of Deposits Management. Richard Heeley, core banking transformation director at Nationwide, said the reason for the focus on current accounts was that ‘we’ve seen transaction banking as the core to the customer relationship’. Customer interactions for each current account numbered about 40 per month, compared to perhaps one or two for savings accounts. ‘Real financial transactions going through the ATM network have already been reconciled all the way to the general ledger, so the full end-to-end journey has already been proven,’ he said. ‘We are in the latter phases of testing now, and we’re moving to a lot of what we’ve built into the production environment. We’ll then test the entire infrastructure again in a live environment,’ Heeley stated. Once the first new current account product was launched, a second was due to follow in the first quarter of 2013. ‘A key reason for doing the transformation project was to see product agility, and SAP Deposits Management gives us massive flexibility to create new products,’ he said. Nationwide’s older current account product would also


start to be sold on SAP later in 2012, and other products remained on the roadmap. ‘We will move to a new savings point of sale system in the next year or so, and this will utilise SAP account origination. We will then move to SAP’s savings back-end. And down the road we will look to move mortgages and personal loans onto the Loans Management module,’ Heeley stated. This meant that the legacy estate would be decommissioned gradually, with the bulk of the project work over the years focusing on connecting SAP and the legacy, he said. At some point, the migration of Nationwide’s existing 5.1 million current account customers needed to be tackled. Nationwide had focused on building a middleware layer to ensure the interface was the same, with the result being that ‘from a customer perspective it won’t matter if they are on a legacy current account or a new current account’. Although most of the time was spent on integration, customisation of Deposits Management was required in a handful of areas, Heeley said, pointing out that ‘we will be the first organisation in the UK to go live with a real-time SAP banking platform’. Nationwide had about 1000 full- time equivalent resources on the project at one stage, and this figure had been reduced to about 800. IBM remained a partner alongside Switzerland-based SAP banking specialist,


Axxiome. The latter was providing SAP configuration and advice, while the former provided the ‘project management horsepower’.


By late 2012, the budget had more than doubled and the


five year project had become an eight year one. ‘This is not a game for optimists,’ said Prestedge, at this time. Plan and budget for the worst, he advised. One of the wrong-turns had significant integration implications. ‘The new core system touched more than 120 applications across the legacy IT estate,’ he said. ‘In reality, the cost of SAP was not the issue, it was the integration effort. I deeply regret that we didn’t focus on how to simplify the legacy IT estate first.’ For one thing, the society tried to keep the legacy front-ends, so as to reduce the impact on staff but this was a mistake. Another regret was not changing the team earlier. ‘We


didn’t change enough of the leadership team early enough,’ said Prestedge. That might sound cold, he admitted, but it is vital to have the right skills and capabilities. Many could not adapt, as they were set in their in-house development ways, felt they knew best and did not work well with partners. ‘We are all going to need to learn to partner differently.’ Those that departed had all gone off to other great jobs, he said, and Nationwide tried not to be too ruthless but the change and need for different skills was essential. A source close to the project put it another way, believing that what was really missing at the outset was a strong architecture team and that this could have been built quicker, to complement the existing skills.


There were issues with SAP’s partners and SAP itself did not escape criticism. It was too passive when it needed to be assertive, said Prestedge. This was particularly around bespoke developments. It did not dissuade the bank from this and Nationwide ended up with a whopping 30 per cent of its system as customised code, which could lead to problems further down the line. Prestedge’s view was that the customisation should have been ten per cent. ‘The challenge now is to progressively take it back to vanilla.’ It reached the point where any new bespoke work had to be signed off by Prestedge himself, as the society belatedly fought against this way of working. There was also a problem with communication, he added, so that the vision was not emphasised enough. You have to be honest but you need to ‘maintain the belief’. The communication team should be as important as any other project team, he said, and there was a need to simplify the narrative and focus on the outcome, ‘not on what we’re going to do this year’. Migration of customer data to the SAP core system took place in 2009. Integration and piloting of current accounts were the major tasks of 2011. The work continued in 2012


Universal Banking Systems Market Report | www.ibsintelligence.com 387


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