Jus' got the banking IT blues
ZDNet.com.au
news editor
Renai LeMay
commentary Jeff Smith probably considers himself the unluckiest soul in the Australian banking industry right now.
The outspoken IT executive has for the past 18 months been spear-heading the massive technology integration effort spawned by the multi-billion-dollar merger of banking and insurance giants Suncorp and Promina.
The task was a prize pearl no doubt coveted by many of Australia's chief information officers; it had all the glamour of a major project at one of the nation's big four banks, but quite a bit more flexibility due to Suncorp's more relaxed and innovative culture. That, and Suncorp has a large in-house IT department, without the hassle of huge outsourcing arrangements.
It was a great career move for Smith, who after a three-year stint to March 2005 in the frying pan as Telstra's CIO had temporarily faded into the background to get his breath back at local baby technology supplier Majitek. The Suncorp role has vaulted the CIO back into the limelight and given him a chance to get his hands dirty again.
If you've been following the press surrounding Smith (our video interview is here), you'd likely conclude the CIO has been doing a pretty good job at Suncorp, with a well-run integration effort which has the support of the company's management.
However all of this is about to change with the news that various parties, including the Commonwealth Bank of Australia, are interested in buying portions of Suncorp at what must be bargain basement prices, considering the state of the financial services sector.
Today alone, Suncorp's share price has plunged a further 8.09 per cent to $10.11 at time of writing, having stood at about $16 in May this year. Nasty.
As CBA supremo Ralph Norris said this morning after he put BankWest in his shopping basket: "We have bought this operation at a very good price."
The news for Smith is bad: all that effort he has put in integrating the various divisions of Suncorp could have to be pulled apart if someone picks up its banking and wealth management divisions for a song.
Jeff Smith (Credit: ZDNet.com.au)
That outcome would certainly be quite removed from what most people thought Suncorp's medium-term future would be: to further solidify its place in the local market as a major tier two bank, as well as Smith's own role as one of Australia's most important CIOs.
Some days just don't go the way you want.
It's easy to imagine the scenario if someone like the CBA (or another titan like ANZ) carved bits off Suncorp; in fact we've seen similar situations before.
Several senior Westpac IT executives left the ship shortly after that bank announced its St George plans; they were replaced by hand-picked former CBA CIO Bob McKinnon. And of course Smith himself landed at Suncorp after the Promina acquisition, following the exit of his predecessor, central services chief Diana Eilert.
It's no secret that mergers and acquisitions result in executive shake-ups, and IT is no exception to this rule.
One wonders whether Smith, one of Australia's highest-profile and skilled CIOs, would stay around long if portions of Suncorp were hived off; a situation which would inevitably create chaos in his department and diminish the prestige and power of his role.
Do you work in banking IT? How is the chaos in the financial services sector affecting you? Post your comments below this article or drop us a line.