Medibank moves on from difficult SAP overhaul

Medibank Private has closed the books on the challenging $150 million overhaul of its core policy and customer relationship management systems having bedded down the platform, and is charging ahead in a new IT renewal program.

The SAP-based platform, managed by IBM, replaced a four-decade-old mainframe. The new platform spent much of the last year in hyper-care after data migration issues arose last July and delayed annual tax statements for the health insurer's customers.

The company was still struggling to get the single software suite for customer, policy, premium and product management systems fully operational as recently as its half-year results in February.

At its full-year results today, however, Medibank revealed the platform was now bedded down and had successfully taken the insurer through one of the busiest times of its year.

The benefits of the so-called Project DelPHI were "now starting to come through", Medibank said.

It cited "more personalised and proactive customer communications", "easier integration and faster product development", and "improved customer segmentation".

The platform will "allow Medibank to better match customers to the right level of cover, recognise and reward membership and improve customers' experience", it said.

It is now amortising the platform.

With the system now operating as business-as-usual, the insurer is moving forward in another significant IT transformation - to its finance, procurement and payroll functions under Project Springboard.

SAP products similarly form the foundation for the ERP transformation - specifically S4/HANA for finance, Ariba for procurement and SuccessFactors for HR/payroll [pdf].

Medibank indicated late last year that it would spent $40 million on the project.

Chief financial officer Mark Rogers today said $28 million of that investment had been spent in the FY17 year.