Unisys clings to BankWest by a thread

Unisys clings to BankWest by a thread

Summary: Unisys West, the Unisys-controlled IT outsourcing joint venture with BankWest, hangs on to its old customer by a thread as the two work towards a final date for complete separation.

TOPICS: Outsourcing, Banking

Unisys West, the Unisys-controlled IT outsourcing joint venture with BankWest, hangs on to its old customer by a thread as the two work towards a final date for complete separation.

The joint venture set up in 2000 is 51 per cent owned by Unisys with 49 per cent by BankWest. While the joint venture still stands, in September 2007 then HBOS Australia-owned BankWest took back services outsourced to Unisys West — a transition now in its final stages, according to Unisys.

"BankWest and Unisys West have confirmed the bank's contract with Unisys West will end, but a mutually agreed date is yet to be confirmed. The end of the contract will see all information technology services currently undertaken by Unisys West for BankWest moved in-house to BankWest," a Unisys spokesperson told ZDNet.com.au.

Previously, Unisys West provided BankWest most of its technology requirements, from transaction services and data centre operations to application management and help desk services. Today, services provided by Unisys West appear to be only on paper.

"BankWest has already moved across most of these services. Both Unisys West and HBOS Australia have been working together throughout the year to ensure a smooth changeover and this has been successful," the spokesperson said.

Tuesday's announcement by the Commonwealth Bank of Australia (CBA) that it would acquire BankWest for $2.1 billion threw another spanner in the joint operation's works. The question over the coming year is whether CBA will retain the 49 per cent share it will inherit from BankWest.

If CBA does retain the joint venture, it wouldn't be the first time the bank has held a major stake in its IT outsourcing supplier. In 2004, CBA sold its 5 per cent stake in Telecom New Zealand Group (TNZG), one year prior to the end of a five-year deal with the telco. CBA also held and subsequently sold a 35 per cent stake in EDS Australia, which it had signed a $5 billion 10-year IT outsourcing deal in 1997.

While the matter would have been low on CBA's agenda at Tuesday's media briefing, chief executive officer Ralph Norris said, "The contract that's in force [with Unisys] will remain in force into the foreseeable future."

Exactly what CBA will inherit, however, is unclear. Unisys declined to say how many staff the operation employs, while its only known clients in Western Australia are the state's Departments of Child Protection and Education and Training.

Unisys also appears to have structured its operations in Western Australia to minimise the impact of a potential separation. Heading up Unisys West is CEO Tony Henshaw, who is also vice president and general manager of Unisys's Asia Pacific global outsourcing and infrastructure services. Thanks to Unisys' 2007 deal with Defence to support its regional locations, Henshaw has seen the WA operations add another 26 IT staff, but this has little to do with Unisys West.

Until a decision is made, according to the Unisys spokesperson, it will be business as usual for Unisys West's clients. "Unisys West will continue to service its other West Australian clients. There are no other changes to the JV and it is operating as normal," they said.

Topics: Outsourcing, 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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