Asteron ready for Suncorp IT integration
The CIO of local financial services company Asteron has signalled his group is ready for the extensive technology integration work due to commence shortly as Suncorp swallows Asteron's parent Promina.
"We're in a very strong position from Asteron's perspective," Bruce Weir told the InsuranceTech conference in Sydney this morning. "We've got a clean house, we've got two platforms. We're pretty pristine, and we've got large amounts of experience to assist with further integration work."
Weir also had some words of advice for Asteron's new owner. He advised Suncorp to get its integration team on board and get the back-end work started early. Weir said Asteron had already taken some action to shore up personnel on its end.
Suncorp has not yet revealed any details of the integration effort, nor its IT management structure going forward, saying only that it expects a discrete CIO position to eventuate, reporting directly to the merged entity's chief executive, John Mulcahy.
The new CIO will be under pressure to keep integration costs down while also delivering long-term synergies from the consolidation of IT assets. Suncorp hopes to deliver net savings of AU$225 million per annum from the merger, with the money expected to come from the consolidation of IT, as well as other areas.
Total implementation costs are expected to be around AU$395 million.
Clean slate
Part of Weir's confidence is likely to stem from the success of a large legacy systems migration project within Asteron, which began in 2003/04 and was recently completed.
Dubbed "ACE", the project saw a number of old and costly platforms eliminated, with CSC's Life 400 and InfoComp's Composer platforms taking centre stage. Asteron also makes substantial use of Oracle software.
"Only a handful of organisations in the financial services sector have actually completed a full systems remediation program," said Weir. "Many have failed after investing large amounts of money, time and effort. Asteron's actually succeeded."
Weir had initially worked as a Fujitsu consultant on ACE, stepping up to Asteron's CIO role when it became available in 2005.
The executive said more than 240 people worked to bring ACE to fruition (125 of those in a full-time capacity), including staff brought to Australia by Indian services giant NIIT Technologies, and other employees recruited specifically for the work from Asia, Europe and the United Kingdom.
Weir said Asteron worked hard to integrate the Indian staff into its local team, but promised Australian and New Zealand staff that the contractors would head home when the work was done.
Although ACE's implementation schedule blew out from an initial 18 months projection to three years, and slightly (10 percent) exceeded its budget, the CIO claimed the project had seen a raft of benefits flow back to Asteron. Those included "a significant reduction in business complexity and risk" and a sharp reduction in the number of products being supported by his team.
"I've turned my IT support costs around and reduced them by 40 percent, investing that now in development," Weir said. "We've been able to prove to the board that in 2007 we'll achieve a full year of benefits from the ACE program ... We've achieved a group return on capital."
Asteron employs 1,200 people in Australia and New Zealand, providing superannuation, insurance and other financial services to around one million clients between the two countries.