Westpac sees big early savings from cloud shift

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Westpac sees big early savings from cloud shift

70 percent fall in infrastructure costs.

Westpac has seen a two-thirds drop in its infrastructure costs with the first lot of application migrations to its new private cloud.

The bank kicked off its ‘Agilus’ infrastructure transformation in late 2014. The initiative involves a large-scale shift of between 60-70 percent of Westpac’s applications into private and public cloud environments.

Private cloud will be used for applications that sit close to Westpac’s core, while commodity-based services closer to the customer will be housed on public cloud.

Infrastructure costs for 30 “projects” - anything from an entire application to smaller features of one - that Westpac has already migrated to its private cloud set-up have fallen by as much as 70 percent, CIO Dave Curran told iTnews.

"I’m seeing the infrastructure delivery costs cut to a bit less than a third, for example what used to cost me a million now costs me $300,000," he said.

There are a further 50 “projects” waiting to be migrated over the next 12 months. Any new feature that is being built is to go onto either the private or public cloud environment.

Rather than rearchitect existing applications to run in a cloud environment, Curran’s strategy has been to replace as many homegrown or customised customer-facing systems as possible with off-the-shelf software.

The big product systems that sit next to the core on-premise, however, are likely to stay that way. Smaller versions of these systems will be containerised where appropriate.

Curran says this business-centric approach is focused on the outcome that a cloud migration of a particular application would have on Westpac’s customers, shareholders, staff, and the regulator.

“I’ve got a really simple view. The closer you get to your customer, the more I’m happy to be bespoke and differentiate. The further I get, the more I want efficiency, therefore I want standardisation and all the things that go with that,” Curran said.

“For product systems, I want standard - so for credit cards I’m on VisionPlus, the customer service hub I’m on Oracle, and what have you.

“Where we want to differentiate is where we are touching the customer. That should look and feel different based on what Westpac is, what St George is, what our relationship with the customer is.”

Curran has previously said he expects that once private cloud becomes the norm, there will be a "second set of conversations" around public cloud that will see Westpac's entire infrastructure moved to a public cloud set-up within ten years.

Counts down days to first go-live for customer service hub

The bank is also just months away from the first release under its customer service hub transformation.

Last December Westpac signed with Oracle to adopt its customer master as the foundation for an integration platform that will link up all the data in product and customer-facing systems to provide a single, holistic view of the customer.

It will involve an entire rebuild of Westpac’s operations from the middle out.

The first piece of work on the customer service hub is home ownership, a significant chunk of Westpac’s business and a vertical that touches at least two-thirds of Westpac’s retail and commercial bank systems.

Westpac had previously said this first release would go live before the end of the year; Curran now says it is ahead of schedule, "unusually for these [kinds of] mega programs".

“This is a massive piece of work. Under home ownership you have things like mortgages and insurance that sit on core platforms, you have to integrate with those," he said.

“We are integrating into the majority of the main systems of the bank - and we’re talking the really big systems. Integration is absolutely going to be the hardest part of this program.”

He said he had been "pleasantly surprised" by the Oracle technology after having struck the deal to deploy it.

“You have a strong expectation of what you’re going to find when you sign a contract - you do your due dilligence - but like when you buy a house, you never really know until you live in it what works and what doesn’t,” Curran said.

“We now have a really strong relationship with Oracle and we fundamentally know what’s there. We’re in a good place.

“That doesn’t mean it’s going to be easy - it’s not - it’s going to be really, really hard. But knowing what I now know of Oracle, it’s going to be less hard than I thought.”

The delivery of the home ownership module of the customer service hub program will serve as a framework for how integration of other verticals will be tackled.

Curran has tentatively scheduled deposits and transaction accounts as the next pieces to be delivered.

This article has been updated to clarify the percentage drop in cloud costs.

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