ZDNet.com.au news editor Renai LeMay (Credit: CBS Interactive)
commentary For the past year, the team here at
ZDNet.com.au has been playing a little game with the Australia and
New Zealand Banking Group.
The game mainly goes like this: we call up the bank every few
months to ask them whether they've yet appointed a replacement for
its former chief information officer Peter Dalton, who was
reassigned almost 12 months ago.
Since that time, Dalton's role has been jointly filled by group
managing director of operations, technology and shared services,
David Cartwright, and deputy CIO Kieran Griffiths, while a
replacement is sought.
Usually (as it did this morning), the bank responds by stating
that the search for a new CIO is ongoing. Today, for example, a
bank spokesperson said it hoped to have something to announce by the
end of 2009. Then we put a note in our diaries to repeat the same
phone call in two months or so. And the game goes on.
But I feel it's about time to start raising the broader question
of why the ANZ Bank hasn't appointed a new CIO over the past 12 months, and looking into the potentially negative repercussions of
the lack of action on this front.
The bank's technology strategy has differed markedly from that
of its rivals over the past several years.
The other pillars of Australia's banking industry, the NAB,
Commonwealth and Westpac (including St George) groups, are all
currently pursuing ambitious core banking system revamps that aim
to deliver new functionality to staff and customers, with benefits
to percolate out through the various systems which sit on top.
In comparison, ANZ is advocating a course of simplification and
spending its IT dollars on projects that will bring in more profits
— for example, adding customer-facing internet and mobile phone
banking functionality. The bank has experimented with core banking technology, but only
in the Asian regions that it also operates on — not in its core
ANZ differs from its brethren in one other significant way: more
so than any other bank, it is increasing the amount of technology
work it does offshore, predominantly in its Indian facility. Late last month the bank's chief executive Mike Smith estimated
the bank had 4000 staff working at the Bangalore facility — 500
more than the latest released figure. The offshoring exercise has
caused significant concerns amongst ANZ's unionised workforce.
In March — just six months ago — the bank had announced the
number was increasing from 3000 to 3500 as it cut staff at its
All these moves start to bring a fairly clear picture of the bank's
technology division into focus. In my opinion, ANZ is currently lacking in the really
senior strategic technology leadership that is required to give its
IT operations a lasting vision — and execute on that vision — for
the five to 10 years ahead.
My impression of the previous CIO, Peter Dalton, is that while
capable, he didn't have the sort of industry gravitas and skill at
getting initiatives through the bank's board that his counterparts
at Commonwealth Bank of Australia (Michael Harte) and Westpac (Bob
McKinnon) have in spades.
During Dalton's tenure he appeared to mainly be focused on the
kind of sexy surface-level initiatives which get both press and
approval from within your organisation (such as green IT), but not
the ugly, multi-year, expensive system overhaul projects that most
of the senior IT managers in banks know are crucial to their daily
If you look at the career of deputy CIO Kieran Griffiths,
indications are a little more encouraging. According to this
article by CIO Magazine, he was previously the bank's general
manager of enterprise services, a role which saw him oversee the
infrastructure, service management and enterprise applications.
However, one cannot help but feel that Griffiths' influence on the
bank's IT strategy will be heavily overshadowed by group managing
director of operations, technology and shared services David
Cartwright, previously the CEO of iPSL, a cheque processing
services company in the UK, as well as a former technology and
services delivery executive with Barclays. There is no doubt that
Cartwright has the technology background to come to grips with
ANZ's critical underlying platforms.
There is little evidence that ANZ is really investing in its technology and preparing for the next wave of services in the five- to 10-year time frame.
Though one can't help but feel that at the moment it's the
operations and "shared services" side of his job that is dominating
his thinking. There is little evidence that ANZ is really investing in its
technology and preparing for the next wave of services in the five-
to 10-year time frame. But there is a fair degree of evidence of
cost-avoidance and cost-cutting going on at the bank.
This sort of cost-minimisation approach to an organisation's IT
department is often the one taken by chief operating officers, as
opposed to the typical chief information officer approach which is
typically far more expansionary and developmental.
And Cartwright is in essentially a chief operating officer
Let's be clear — I'm not arguing that ANZ is likely to run into
many (if any) short-term problems from the lack of a permanent
chief information officer in the company. Unlike the Commonwealth
Bank, for example, it hasn't suffered any major outages recently,
and it has even gone to the extent of re-negotiating a major $500
million contract with Optus for telecommunications services.
But it is in the long term that the bank — which declined to comment on the issue for this article — will suffer without a
strong, technology-oriented CIO to deliver it a strategic IT vision.
We've seen this sort of problem play out many times, in many
different organisations, when the chief information officer has
been marginalised or been absent altogether. The modern chief
information officer role evolved from the old "IT manager" or "IT
director" position of the 1990's for a reason.
In 2009, CIOs are
there to provide a bridge between business management and the
technology division, in an environment in which technology is
critical to the operation of almost every large company.
Forgetting that lesson has the potential to cost any business