RAMS and Solace approach $150m outsource deal

Mortgage provider RAMS is negotiating an outsourcing deal with Solace, potentially handing its core banking systems management to Solace to the tune of $150 million.

The 10-year assignment is valued at $10 million to $15 million a year, with the main portion of the project expected to go live by mid-year, RAMS chief information officer David Scanes told Computerworld.

Under the deal Solace, a local application services provider and financial software developer, will configure a banking system for the mortgage lender known as the RAMS Enterprise Business Systems Solution (EBSS). Solace is expected to deploy, host and manage the solution from a central facility, RAMS officials said.

EBSS is based on Solace technology partners Global Technologies and Temenos' Globus integrated banking system solution, components of which are also used by the NRMA, GIO, Shell Australia and Colonial Bank.

The EBSS model integrates RAMS' business banking system, customer relationship management, workflow management and Web systems, and will support 500 internal users, Scanes said.

According to Scanes, the deal is not only a win for RAMs in terms of the cost and infrastructure efficiencies expected, but because he believes it will bring the ASP model "back to life".

RAMS expects EBSS to generate a 20 to 30 per cent return on investment by the end of the year. Scanes added that the service-level mentality inherent in any ASP agreement "could not be underestimated".

While 50 in-house IT specialists have been assigned to the EBSS project, most of them will end their contracts with RAMS after the project is complete.

Scanes maintained that RAMS' focus was not on cost savings, but on up-skilling project staff before the organisation let them go. "Going back two years, the ASP model was pretty raw and all the focus was on how to save on costs. [RAMS] will feel some skinning in letting some of its core people go, but with this model, we're going to find new customers and clients. Also, [the deal] is going to reignite the ASP model particularly in the banking and financial services sector, as the banking solution itself will sell the ASP model," he said.

For Scanes, the arrangement poses a headache in so far as the need to retain only key people in business and IS when outsourcing RAMS' core systems, and in turn, ensuring redundant staff don't feel disadvantaged by the prospect of moving on. "We've been upfront with staff about our outsourcing plans from the start," he maintained. "The project will be a plus for us in terms of better staff succession planning. I want to ensure my staff have career longevity and direction. My staff have been unquestionably behind me - they're looking forward to moving from the corporate world to the commercial world."

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