​NAB's new IT outsourcing model might have saved it from extinction

NAB has an 'aggressive' plan to send 35 percent of its 2,600 apps to the cloud now that it has a way of bringing technical capability in-house.

The National Australia Bank (NAB) historically relied on third parties for help with IT, but what that resulted in was the bank one day waking up with no internal tech capability.

According to NAB executive general manager for infrastructure, cloud, and workplace Steven Day, the bank's outsourcing model led to quite a few problems.

"Like many large enterprises, NAB decided to go on this outsourcing journey about 10 years ago -- outsourced pretty much all of the infrastructure -- and we got to a point now where there's no internal staff with any technical capability," Day told AWS re:Invent in Las Vegas on Monday.

"What we really have internally is contract managers that manage our outsourcers and that does create a lot of problems."

Outsourcing gave NAB the intended consequences where pricing and routine specifically were concerned. However, an unintended consequence, Day said, was it stopped innovation.

"Once you require a statement of work and negotiation and quotes and everything just to do anything new, that is really a barrier to people experimenting and trying new things," he said.

Despite things working and reports returning green, the model was outdated and limited the potential for the bank to succeed in the future. This is especially in light of NAB's new cloud-first play that sees a 35 percent shift to the cloud.

"That's a very aggressive move to the cloud," Day said during a discussion on Enterprise DevOps.

"That's really because we had a look at the situation we were in and we looked at public cloud and realised that enabled us to completely pivot how we consider outsourcing -- because cloud is still outsourcing -- you're outsourcing pretty much up to the hypervisor of your infrastructure, but you can maintain some level of control above that and you can create platforms that allow you to enable your DevOps teams."

In total, NAB has 2,600 applications.

"We had no technical staff and then we were going to 35 percent of our apps -- and we have 2,600 applications, that's a lot of apps -- into the cloud all of a sudden and no one to really manage and develop those platforms internally," he continued.

That's where AWS' AMS came in, with Day touting the automated platform as allowing NAB to get up and running before hiring or training staff.

AWS also provides a 50/50 program that helps organisations migrate 50 applications over 50 days.

"We are a bank, so 50/50 was a bit aggressive for us so we settled on 30/50. That was really what we had to work on with our regulators and our internal risk and compliance teams -- so that was the target from the beginning," Day said.

"It wasn't really about the number, it was about creating an imperative, where everyone had a shared outcome -- bringing everyone together -- and we had top level exec support, all the way to the CEO that was incredibly interested in how we were going."

According to Day, the 30/50 program helped the bank cut through its usual red tape -- compliance, security, risk -- by having everyone involved in the process. He said it stopped the practice of reviewers stopping work at certain junctures.

"They were engaged right from the beginning, they were embedded in the teams, so if we failed they failed it became less of a policeman and more of an enablement function," Day explained.

"Enterprise DevOps was the key, this is what we were really trying to achieve."

While Day said AMS has been crucial in getting the bank off the ground, it's only a short-term plan.

"AMS is not our long-term vision; AMS is a stop gap for us, it's going to help us build the platforms in the best practice way, get up and running. As we bring our staff in, as we get our training completed, we'll get to a point where we know we can operate this environment ourselves because it is all automated," he said.

"We can build the platforms, maintain the platforms, at that point, we're going to pull back from AMS and run the service internally ourselves which will give us full control, ownership of the thing and the right outsourcing/insourcing balance we're comfortable with, but it will help us do it in an incredibly safe and thoughtful way."

In delivering its 2017 financial results last year, NAB announced it was planning on cutting a total of 4,000 jobs from its workforce. 6,000 roles were impacted as the bank "further automated and simplified" its business and 2,000 new jobs were created as a result of the restructure.

A week later, the bank unveiled its plans to begin immediately hiring more staff, telling ZDNet it would be seeking 600 technology specialists spanning software engineering, data, architecture, and cybersecurity.

The recruitment drive is part of NAB's plan to reshape its workforce and create up to 2,000 new jobs by 2020.

"We are improving the experience of our customers, reshaping our workforce, and growing our bank in an environment of rapid technological and regulatory change," NAB CEO Andrew Thorburn said at the time.

Attempting to further combat the skills shortage, NAB also launched the NAB Cloud Guild, an internal program that offers up AWS skills training.

Disclosure: Asha McLean travelled to AWS re:Invent as a guest of AWS

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