What a difference a tech savvy CEO can make

Senior IT executives from the Commonwealth Bank were last week describing its $A573 million resigned outsourcing deal with EDS as "a puff of nothing".

That's right, no fireworks, no colourful media headlines. The deal's done.

But the truth is it's a far cry from the original deal inked in 1997. That was a 10-year, $A5 billion partnership.

The new deal is missing a few well-rounded zeros in the final figure and only covers the provision of mainframe and mid-range data processing services through to June 2012.

While the reduced extension was expected, IT executives at the bank point out that the financial institution has been heading in this direction for years.

"We moved to selective sourcing a long time ago," executives said, adding that there was no value in moving away from EDS completely.

The bank was able to maintain a degree of flexibility in its outsourcing arrangement with EDS and the contract was repeatedly updated.

"Outsourcing contracts evolve and change during the life of the deal anyway," they added.

As far back as the year 2000 the bank was carving up its IT operations into key areas - mainframes, telecoms, data centre operations and applications/software development.

At that time the bank inked a groundbreaking $A500 million contract with the Telecom Corporation of New Zealand. It was resigned five years later and is due for renewal in October 2007.

The bank is building a new data centre in Sydney's north-west and has been busy ramping up its in-house application capabilities for the past 18 months.

Influencing this process is one significant development that took place last year - the appointment of the bank's former CIO Ralph Norris to the role of CEO. What a difference a tech savvy CEO can make.

Ever considered outsourcing your CEO? E-mails to sandra_rossi@idg.com.au

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