Analysts praise Westpac changes

Summary:Technology analysts have given Westpac CEO Gail Kelly the thumbs up for purging old blood from the bank and are not surprised by ex-CommBank CIO Bob McKinnon's appointment.

Technology analysts have given Westpac CEO Gail Kelly the thumbs up for purging old blood from the bank and are not surprised by ex-CommBank CIO Bob McKinnon's appointment.

Yesterday Westpac announced that it would reorganise itself and centralise IT under a new Technology, to be headed by McKinnon.

"This is a classic case of a new CEO coming in and making sure she appoints people she trusts as her direct reports. You see it everywhere in every organisation," S2 Intelligence analyst, Bruce McCabe, told ZDNet.com.au.

S2 Intelligence analyst Bruce McCabe: "a classic case".

"McKinnon's obviously extremely experienced and has headed up enormous projects at CommBank previously. But primarily it's the CEO appointing people she trusts," he added.

McKinnon is familiar with Kelly from their days at Commonwealth Bank, according to McCabe. McKinnon spent six years as its head of technology between 2000 and 2006. Kelly was already at CommBank, having joined in 1997. She left in 2002 to take up the helm at St George Bank.

IBRS technology analyst, Rob Mackinnon, says Westpac's decision was "a very interesting, but hardly a surprising move", given the likelihood of Westpac's pending merger with St George going ahead.

IBRS analyst Rob Mackinnon: "hardly surprising".

More than familiarity between the two, Mackinnon reckons Kelly wanted a hard-nosed businessman to oversee the technology as it headed towards a possible huge integration project following a merger — and in the face of a possible recession.

"If the St George acquisition proceeds as expected, Gail Kelly will be running the largest financial institution in Australia at a time when banks are under increasing pressure both from a business viewpoint in a market spooked by the R-word and technologically where all banks have major legacy system replacement projects on their agendas," he said.

"Also, when times are tough economically, there is often a tendency for businesses to lean toward business-oriented CIOs rather than technologists. Bob McKinnon is both and brought a new, straight-talking reality to the head technology role at CBA. I'm sure the same will apply at Westpac," said Mackinnon.

However, a spokesperson for Westpac told ZDNet.com.au that the changes announced yesterday would have occurred regardless of the planned merger with St George. "It was a general move to become more customer-centric," the spokesperson said.

Hydrasight analyst Michael Warrilow: "a move to bring an impartial party".

The recent departure of Westpac's CIO, Simon McNamara, also had nothing to do with yesterday's announcement, the spokesperson said. "Simon has been out of roll now for a few months. He had been transitioning out of the roll, and has been operating in a handover capacity until recently."

McNamara has already left to take up a senior IT role at Standard Chartered in Singapore.

But analysts are doubtful there hasn't been some bad blood resulting from cultural changes brought by Kelly's arrival. IBRS's Mackinnon said, "I suspect that having lifted the covers at Westpac, Gail Kelly has not been pleased with what she has discovered and thought a fresh approach was necessary."

Diane Sias, who was previously head of Westpac's Business Technology Solutions and Services (BTSS) division before it was dissolved yesterday, and who only took the role in mid-2007, has also flagged her departure.

Hydrasight analyst, Michael Warrilow, told ZDNet.com.au that the reorganisation reflected the "political landscape" of the organisation and that it wouldn't be unusual if this resulted in the departure of some staff, but added: "Clearly it's a move to bring an impartial party into the equation and an experienced exec with knowledge of this scale of business in another Australian bank."

Westpac could not clarify at the time of publishing whether the re-organisation had resulted in other IT staff cuts.

Topics: CXO, Banking

About

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, s... Full Bio

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