Commonweath Bank CIO talks cloud computing

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Well, it’s an economic reality that our customers demand more and more convenience, more and more accessibility, and more and more richness in the services they consume. So we have to invest in that, not invest in the heavy backend infrastructure.

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Could you talk through your reasoning in wanting to become involved the Enterprise Cloud Leadership Council as a user organisation?

I personally prefer just the buyers to be there to define the standards and to create the innovation. But if those providers are happy to accelerate our move into the cloud then they are very welcome. If they genuinely want to help us move out of infrastructure and into value, then they are very welcome.

Was your role a formative one?

There are many people in this space. There are drug companies, there are logistics companies, there are manufacturing and distribution companies in lots of industries — whether it’s entertainment or food and beverage. We would be arrogant if we thought we were the only ones in the vanguard.

If they look at more and more of these cloud technologies — because people are solving the security problem — they can make some major cost savings and major product breakthroughs in their business

We stand to gain more form learning from them in the establishment of standards. We will gain a huge amount by sharing what we know and collaborating in terms of gaining reciprocal innovation from them. And then, together, looking at new investments we can make together, both jointly and severally; to go and adopt new infrastructure capabilities, new application capabilities and moving up the learning curve much faster than we would do on our own. While my team’s been pushing really hard in Australia, there are many more advanced in many parts of Europe, Asia and America. We can only stand to learn from them and we only stand to help them race up the curve faster.

If you were to design the IT infrastructure for a bank from scratch, what you would come up with is probably nothing like what you currently have. But it sounds like you perhaps have an opportunity here to bring that vision closer to reality?

Yes. But you are always inevitably hampered in some way by your legacy. We invented systems 30-40 years ago that were based on accounts and transactions and an organisation that was open at nine or 10 in the morning and closes at four or five in the afternoon and did everything overnight or over the weekend. We now know our customers want 24/7 accessibility, 24/7 convenience, 24/7 value and they don’t only want to do transactions, they want to do analysis, they want advice, they want all sorts of assistance and we have to be there for them. In order to provide that richness and be relevant in their life, we have an onus of responsibility to provide a completely different computing style. We’ve invested heavily in the core banking modernisation and being the finest online. We stand by those investments and we’re prepared to be either the first mover or the fast follower and that’s all around delivering what the customer is demanding.

Is there anything more we should look towards the bank doing, say over the course of the next 12 months, on this movement?

We’ll be working on publishing APIs so that we can get more and more development done. We’ll be working more and more on mobile applications and mobility. We’ll look at creating more and more services on demand. We’ll be looking at putting more and more pressure on our incumbent providers to standards, open reusable components that are service oriented.

Is there any advice that you would give to other CIOs out there who might be wanting to follow this path, but have been hesitant to date?

Consider faster adoption! Consider active participation in standards formation! Consider experimentation! There are some safe experiments that they can do and there are some small scale bets that they can make that won’t put their infrastructure at risk. So, if they look at open APIs [for example]. If they look at service based orientation and standards based work. If they look at more and more of these cloud technologies — because people are solving the security problem — they can make some major cost savings and major product breakthroughs in their business. And they shouldn’t look at being followers, they should look at being leaders.

Was this a particularly difficult direction to present to the board?

Not really, because we are risk-adverse and we are considered risk managers and we specialise in formulating and pricing risk positions. We’ve looked across the globe at best practice and we’ve decided that there are some things you can be a first mover in and there are some things that you can be a fast follower in, where there is risk, work with standards groups and work with collaborating corporations to mitigate risk and be fast moving in terms of creating value. We are doing it for our customers and as our customers demand it, we can free up and realise value. We don’t want to stay in the capital bind of running unnecessary infrastructure or carrying unnecessary overheads, when we can pass on the value and create wonderful products and services for our customers and create value for our shareholders. So it wasn’t that hard to make. It really was a rational set of decisions.

Look out for the feature, Clouds Gathering, in the July/August 2010 issue of CIO magazine. Subscribe now.

Copyright © 2010 IDG Communications, Inc.

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