Suncorp consolidates on IT Building Blocks

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Suncorp consolidates on IT Building Blocks

New four-year simplification program takes off.

Suncorp is ramping up work on a second modernisation program after bedding down its three-year Building Blocks program ahead of schedule.

Building Blocks aimed to simplify Suncorp’s banking and insurance businesses by removing duplicate CRM, HR, finance, claims, and pricing systems with an annual savings target of $235 million from 2013.

Suncorp last week said it had completed its Building Blocks infrastructure projects in the 2011-12 financial year, crediting the program for saving more than $200 million in the 12 months to 30 June.

For the final stages of Building Blocks, Suncorp consolidated 245 "corporate centre applications" into 78, while deploying a hosted Oracle CRM OnDemand platform for its banking business.

“It’s been a busy year,” Suncorp’s head of business applications Matt Pancino told iTnews.

“Building Blocks was the first half of modernisation. ‘Simplification’ is the final step in removing all of the legacy complexity from what was a heterogeneous group quite a few years ago.”

In its FY12 results announcement last week, Suncorp told investors that the $275 million simplification program aimed to invest in modern platforms and systems, and reduce the cost of operating and maintaining legacy infrastructure.

The group planned to further streamline legal structures and its cost base, with Pancino noting that technology was “just one aspect of the group’s Simplification agenda”.

In the coming 12 months, Suncorp planned to decommission legacy general insurance policy systems, improve its core banking platform and undertake an ‘operational excellence program’ with global partners.

Pancino said the company planned to consolidate 14 insurance policy mainframe systems into one, while re-engineering platforms to support a 2.5-year-old push to drive more life insurance sales through direct channels.

“By decommissioning duplicate or dated systems, Suncorp aims to reduce operating costs and reinvest those savings in new digital channels,” he said.

In the past 12 months, Pancino said the group had delivered 14 new websites and seven mobile applications, noting that mobile devices accounted for a third of its online banking logins in 2011-12, up from 18 percent the year prior.

The group looked to leverage Agile development, open source technologies, its three-year-old ‘SunCloud’ private cloud infrastructure as well as externally hosted products to improve its flexibility and speed to market.

Pancino said it was also building automated testing frameworks for developing, configuring, maintaining and upgrading systems quickly.

When Suncorp chief executive officer Patrick Snowball unveiled the Simplification Program in May, he said it would deliver annual benefits in the region of $200 million from the 2016 financial year.

Pancino said the technology team was working to a much more aggressive timeframe but did not disclose details.

Suncorp last week recorded a profit of $724 million, up from $453 million the year prior, when the group experienced “the worst period of natural disasters in the region’s history”.

The group reported a $780 million profit during the 2009-10 financial year.

Chairman Ziggy Switkowski said this year’s results demonstrated “Suncorp’s ability to successfully balance a major transformation program and numerous external challenges while also rebuilding shareholder value”.

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