CBA CIO: IT skills still a challenge

CBA CIO: IT skills still a challenge

Summary: CommBank chief information officer Michael Harte claims that finding skilled staff for the bank's core banking system upgrade is a difficult task despite the recent spate of ICT redundancies.

TOPICS: CXO, Banking

CommBank chief information officer Michael Harte claims that finding skilled staff for the bank's core banking system upgrade is a difficult task despite the recent spate of ICT redundancies.

michael harte commbank

CommBank CIO Michael Harte
(Credit: Commonwealth Bank)

The bank's $580 million core banking system replacement, expected to take five years and likened by some to a heart and lung transplant, has set CommBank on a hectic hiring strategy that sees hundreds coming and going each year, according to Harte.

"There are many streams of work in a program that large and so we are always looking for new skills. Our focus on that program has intensified rather than reduced," he said.

CommBank has hunted for a wide range of technology skills at a time when many workers in the Australian IT industry have been spooked by large layoffs. But, while he said it was difficult to make any general comment about the state of the IT labour market, the impact of those redundancies so far had not had a noticeable effect on the availability of skills.

"We haven't seen a flurry of people being made redundant from other organisations being available on the market," he said. "There's no doubt, however, that across the IT industry, generally, there are probably fewer opportunities and the market has been more oversupplied than it has been in the past 12 months. But we're not seeing any radical shift."

Not surprisingly, the most desired skills on Harte's wish list were related to SAP. More recently though, migration skills have become a priority. "People that know how to extract and load data off old applications, old databases and onto new — we're actively employing in that environment," Harte explained.

"We might want database administrators one month, engineers another or testers — there are large numbers coming in and out depending on the skill sets we need."

And while its search for migration specialists had intensified, redundancies that may occur as the bank switches off legacy systems were some way off yet, he said.

"That has been planned for the second, third and fourth quarter [of next year]. We will be doing the migration work much later but the planning for migration is well underway."

Even before the financial crisis, the Australian banking sector's technical workforce had taken a battering via moves by the likes of NAB and ANZ, both of which have reduced local technology staff counts as they transfer work to off-shore technology centres.

While major restructures at CommBank have occurred, such as reshuffling its line-up of outsourced contracts for application management in an effort to move away from its EDS-dominated outsourcing arrangements, staff cuts within CommBank's technology and operations division had not occurred, said Harte, who also drew a clear line between the bank's 2,500 in-house IT staff and 500 IT contractors.

"We have not specifically laid off Commonwealth Bank employees, but we have let go a number of contractors," he said. However, he suggested those contractor cuts were part of the bank's standard hiring strategy.

For example, the bank was currently seeking around 60 IT contractors, said Harte, while "there might be 30 to 40 we see out the door" in the meantime.

Unlike the staff cuts announced by ANZ Bank last Friday, he denied he was under pressure to reduce CommBank's technology staff count.

"Every single year we control, with machine like precision, the number of people we need from a skills and capability perspective... And as different project investments go up and down, we have the flexibility to move people in and out, so there is no change in that. It's business as usual," said Harte.

Core banking: CommBank confidential
The $580 million core banking systems replacement, which has been driving the revolving door of contractors, has been the subject of widespread speculation since CommBank's CEO Ralph Norris announced the project in April.

SAP's core banking platform was settled on, while Accenture was selected as the key integration partner.

At the time Norris said that a new core banking system would replace 40-year old systems and deliver "real-time" banking for consumers. However, in the absence of any major Australian bank that has completed a similar project, exactly what that would mean has remained a mystery.

Head of SAP Australia & New Zealand's Industries Division Stuart Pike said that core banking system replacements would typically allow a bank to get a more comprehensive picture of products and customers. Essentially, it would draw together systems and information which has for years been poorly integrated.

CommBank has refused to say what the systems replacement would mean, in part, according to Harte, to avoid the possible ignominy of under-delivering on such a large and vital investment in technology.

"We don't want to promise things we haven't delivered; we have to rigorously test stuff before launching to the general market," he said.

Harte wouldn't budge on the bank's vow to secrecy either. He would only say it had "brought up the first set of capabilities" but added: "They're in production and have not been launched to the public, so that's private and confidential."

Topics: CXO, Banking

Liam Tung

About Liam Tung

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, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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  • Watch out for Andersons..

    I almost feel sorry for CommBank. Why they chose Andersons, oops thats Accenture, is beyond me. Watch the consultants suck any remaining cask from the bank, my guess is that they'll reach $580M before the project can deliver anything.
  • Accenture Capability

    It wouldn't hurt to see if there was any personal history or relationship between Accenture and the person responsible for the selection and on-going management of the Accenture relationship in the delivery. It smells a little a little like a favour or personal gain to me.

    Accenture are still being spruked as the strategic partner yet they have never really deliverred an SAP project on time or on budget. Accenture globally, dont even see their SAP skills to be one of their core capabilities.

    Who is this guy running this and what personal history does he have with Accenture. I'm sure that someone is feathering their own nest v's looking out for the best interests of the Bank.
  • not specifically laid off Commonwealth Bank employees

    Is this just Harte trying to retain some level of no-comment or just outright lying.

    I have heard 2 Executive Managers have been made redundant in the last month (Partridge and Bailey) within Hartes core enterprise IT team. One comment recently received is that CBA staff are even being told not to talk or they will be sacked. "Dont believe everything you hear is what" one said not wanting to be named for this reason.
  • Re:not specifically laid off Commonwealth Bank employees

    There been a number of large startegic projects that have been officially deferred as a result of the cuts to project budgets to the tune of $100m. All contractors on these projects were given notice.
  • Understanding technology still in infancy

    200 years ago, 80% of people were on the land.

    After the Industrial Revolution, 80% were in factories.

    In the 1950, 80% were in offices.

    Now probably 80% are in service industries.

    That basically leaves only 200 years for humanity to have the mental capacity to understand technology. Is it surprising that so few in the IT area REALLY understand enough about the technology? The rest of us have some knowledge, but mostly just use the technology by rules without that deeper understanding.

    Many programmers are head down, tail up focussing on their part, and many so-called architects are not really holding a complete understanding of the technology and issues with which they are entrusted.

    We need much simpler building blocks if we are to tame technology.

    If we look at nature, many are looking for the ultimate 'building block', with many and confusing theories around.

    To me, there IS one 'building block', or rather a pattern, best represented by a circle with a dot at its centre. Many objects from atoms to galaxies use this pattern, where the centre governs the identity, and the boundary around defines how the object communicates. The complexity comes through the structures built out of these objects.

    Therefore, it surprises me why there are so many complex objects designed in IT projects, just begging for problems through excessively complex interactions, within and between those objects.
  • Core banking is not simple

    The problem that projects like this face is the complexity of relationships and volumes that need to be processed in "real time". I don't know CBA figures but if they are doing several million transactions per day and each transaction will have between 10 and 100 fields including a number of relationship maps. You are quickly dealing with terrabytes of complex information that needs to be processed and stored each day.

    Don't see how you'll build this with circles and dots?
  • Waisted years?

    Patanjali - I think you describe one of IT:s main dilemmas very well: the inability by users to comprehend that what is specifically made simple enough for them to understand is not necessarily that simple below the surface (user interface). Now, this is a just a nuisance that IT professionals have to live with. â??It comes with the jobâ??. The real problem is when less skilled and undereducated managers fail to see this as well. This is what will make Australia fall even further behind compared to the rest of the westernised countries.

    A great part of a qualified IT professionals job is to structure very complex things in a way that these very complex things appear simple enough to the users so that they can perform their (almost always much simpler) duties. When the users perceive the end product as simple and easy to use the IT professional has been successful.

    One cannot expect every non IT professional to understand the underlying complexities, but â?? for havens sake â?? most people should have enough intuition to envision that computer systems and automatisation is a pretty complex matter! The fact that it took humans a while to invent them [computers] should however give even the most ignorant person a clue....

    Ironically, the complexities related to the core technologies are not the biggest challenges for an IT professional. Oh no. It is actually to handle super ignorant people like yourself (who, even more ironically, often end up managing the IT professional [I wonder who should manage who]).

    But thank you for pointing out to generations of the worldâ??s sharpest, most ambitious and hard working scientists and professionals, who have waisted years of brainpower, energy and money to increase the efficiency of mankind, that all it takes is a circle with a dot in it. What where we thinking?

    Please tell me that you donâ??t have any significant influence at your company!
  • Core project delays

    I bet the delays in project spending weren't with Accenture. Im sure that David Curran who is leading this work is looking out for his own financial well-being given his personal vesting in Accenture shares as well as wanting to put himself in good stead with the board (Jane Hemstritch) who also has a signifant Accenture shareholding. Lets see if CBA decreased the planned spend of $200m with them and that will tell us!
  • Shoot the messenger is cheap!

    I see that you entirely missed the point of my treatise: that people do not necessarilly understand the technology with which they work and often make systems out of complex components rather than follow nature's lead and use simple objects and only build systems as complex as they need to be, but no further. The KISS principle.

    Many do not perceive the simple and the elegant, but instead create needless complexities and create insurmountable problems in the process.

    I am a contract Technical Writer by profession. It is my job to make the complex at least seem simple so that those who follow are able to understand how to use systems, even if they have difficulty understanding the systems themselves.

    I have simplified many processes that were overly complex because those involved, though very intelligent, did not understand how to efficiently use the technologies at hand, at least not without starting up a whole massive project structure to 'crack a walnut'. It is not rocket science, but required deconstruction of processes to more simplified forms (at least conceptually) and then building those forms with only the complexity needed.

    I have seen lots of 'ambitious and hard working scientists and professionals' that HAVE 'waisted years of brainpower, energy and money' in pursuit of unrealisable dreams. Just look at all the software projects that have gone off the rails because of the difficulty of just aggreeing to what is needed. Intellect is no guarantee of wisdom, that efficient and effective application of knowledge.

    Ans sarcasm is no substitute for perception either!
  • Objects!

    Let the circle represent an object's interfaces (communication paths) and the dot what it represents (identity/functionality). Now was that hard? Even a bit simplistic? But that is my point!

    Those TB of information are still just large amounts of simpler information. Normalisation of data is about simplifying relationships to eliminate redundant data. In the process, the tables have less columns and so are simpler.

    The problems occur when not enough effort has gone into finding better (and simpler) fundamental representations of data and objects. Representations that end up having to be reworked too much when changes are required because:
    - the initial prototypes were not re-engineered to facilitate development (the time of most change), and
    - the object structures didn't abstract higher functions properly and force device-dependency downwards.
    These come about because there is not enough appreciation on the part of managers (and marketers) of what the technology actually requires to make it work reliably and scale to production.

    I built a tool with VB, XML and XSL that provided an on-demand HTML hyperlinked pictorial representation of the classes and their inheritance and foreign key trees of an object-relational, real-time/transactional, distributed database. It did not require any drawing skills and took only 10 minutes to produce the document. I have seen too many UML diagrams that made it too hard to visualise what was actually going on, too too long to produce and were hard to maintain (if anyone bothered).
    The team leader did not have such a tool when he was developing the objects and said he would have built a deeper class inheritance tree with simpler classes if he had been able to see them that way at the time. The tool only took a few days to build its basics, but it was far more useful ongoing than a static document that would have taken months manually and been out of date immediately. My point is that to use technology requires simple ways of looking at it. Representational complexity only serves to obscure the basic relationships.
  • All very well but

    That’s all very well, but core replacement programs need to integrate several hundred legacy systems and thousands of processes into a homogenous system that supports the business. Its all intrinsically simple, especially in a representational way. A bank will require advanced CRM, accounting, general ledger, manufacturing (product) risk management, trading systems, compliance systems etc to be integrated. Put this with AML and regulatory reporting and you need to process in real time to ensure you don't break any laws.

    This complexity is the backdrop for the commercial imperative to deliver a solution for market watchers and to meet tight timeframes. Planning for such a radical conversion could take years and never be completed.

    The integration team will also face business stakeholders for each of these systems and processes, who disagree on just about every definition, field, process and timings. Typically a common field will have half a dozen different meanings and inferences across the organisation. Before anything can be done, these business people need to sign-off on business requirements, dictionaries and process dependencies.
    Thus the pivotal role of the consultant is to bridge the knowledge of systems best practice with astute management of the business stakeholders to deliver effective compromises.

    That the CBA chose Accenture to fill this pivitol role is the mystery.
  • banking core system

    I would recommend Altamira Banking System running on Z/OS / TRex as a bank core system.
    and I would leave the objects and the design patterns for the user interface pc based solutions.