NBN Co to cut 160 applications under $200m IT simplification

NBN Co is expecting to realise the first savings from a near $200 million IT simplification program this financial year, starting at $5 million and growing to $41 million a year by mid-2025.

The company provided new details of the transformation in a supporting submission [pdf] to a regulatory inquiry. 

It also indicated separate impending changes to outsourced IT helpdesk arrangements.

The $200 million transformation was first revealed back in December 2020 as the “largest IT transformation” that the company had ever undertaken, though little else was known.

NBN Co has now said that the transformation will see it cut 160 “IT applications” from its environment and simplify its architecture, with a goal of saving “$41 million of opex in real terms annually from FY25”.

“The project commenced in FY21, with the ramp up later than initially planned because of the need to integrate with the network upgrade initiative and other programs,” NBN Co said.

“Benefits are expected to start to flow in FY22 with $5 million of opex savings that ramp up during FY23 and FY24 as the initiative proceeds.”

The company is forecasting to have spent $105 million on the simplification program by the end of this financial year; it has budgeted $77 million to spend in FY23 and $13 million in FY24, when the program is set to be completed.

Outside of simplification, NBN Co forecast its “business-as-usual IT capex necessary to maintain and adapt IT systems over time” would decrease over time.

This spend came in at $252 million in FY21, but is set to fall to $205 million this financial year, before declining to between $130 million and $140 million through FY25.

In addition, the company forecast reductions to its operating costs in part due to changes to its “IT helpdesk functions”. 

It said elsewhere the function is outsourced and that it would reduce “the volume of work” associated with the arrangement, though it claimed confidentiality over more specific details.