Bank of Queensland's (BoQ) acting chief executive officer Jon Sutton has confirmed that the company has once again taken on Hewlett-Packard (HP) for its information technology services, this time signing the company up for a contract half the length of its previous deal.
BoQ put its IT services contract out for tender in May, as its 10-and-a-half-year mega contract with HP drew to a close. HP was one of four IT providers that were in the running earlier this year.
Sutton said that the new five-year contract will see HP underpin the bank's strategic transformation agenda.
The renewed partnership is also expected to allow BoQ to reduce the complexity of its IT environment, standardise and improve the delivery of technology services across the business, increase the speed and quality of project delivery, and reduce overall IT operating costs.
"This [contract] replaces a highly inflexible, outdated 10-year contract, and will provide cost savings," said Sutton. "For example, our enterprise storage costs will be around 60 percent lower."
It is hoped these cost savings will allow increased reinvestment into growth initiatives, and also provide the bank with a buffer for increased amortisation.
"There has also been investment in productivity improvement, such as digitisation of the back office, which will be implemented in 2015," said Sutton in a statement (PDF).
Although the value of the new IT services contract has not been made public, BoQ's preliminary final report for 2014 (PDF) that the company recorded AU$65.3 million in consolidated expenses related to data processing over the past financial year.
Additionally, it reported AU$1.3 million in depreciation of IT equipment, along with expenses of AU$14.7 million in consolidated computer software amortisation and impairment for the period.
When BoQ began the process of reviewing its IT services late last year, chief financial officer Julie Bale said that a decade ago, when the bank signed its previous contract with HP, it had outsourced 100 percent of its IT.
However, after that, its IT infrastructure "fractured", leaving about 40 percent outsourced and leading to the company's move toits IT services.
BoQ reported in its preliminary results a consolidated after tax profit of AU$260.5 million for the year ending August 31, up from its previous year's result of AU$185.8 million.