Overview

Group Technology is Nedbank Group’s centralised technology unit with responsibility for all components of the group’s technology processing, development and systems support. The group’s IT systems, databases, technology infrastructure, software development and IT project/programme management are centrally managed to provide economies of scale and facilitate a cohesive groupwide service-oriented architecture (SOA) technology strategy.

2009 in review

With the global and local recession taking full effect during 2009, Group Technology faced very different business requirements (eg flexible and stable debt collection processes and systems) and constrained innovation budgets to maintain service levels to the business clusters while servicing demand for infrastructure improvement and innovation projects. This increased the scale and complexity of the group’s IT environment.

In terms of IT Infrastructure and Operations the following volumes and services were supported by Group Technology during 2009:

• GroupTechnology processed on average 5,6 million financial transactions daily across 429 systems in its mainframe and UNIX environments. Over 33 500 online and batch programs were run daily.
  
• Efforts to arrest Microsoft server growth have been successful, resulting in the decommissioning of nearly 300 servers, leading to the first year of net negative server growth since the inception of Microsoft server technology.
  
• A total of 28 900 personal computers, 11 700 printers, 52 500 voice devices and/or ports and 75 600 data connections were supported. In the self-service environment 1 874 automated teller machines, 379 self-service terminals and 42 500 point-of-sale devices were supported.

• The operational quality of service was improved for the fourth consecutive year. Serious outages and service disruptions decreased in number by 33% and in time impact by 39% over 2008. These improvements were achieved despite deploying a significant amount of change into an increasingly complex technology landscape.
  
• No environmental issues were experienced due to power outages at our primary and secondary data centres throughout the year.
  
• Benchmarks conducted during the year in the mainframe, midrange, Wintel server, storage, end-user computing and other infrastructural areas continued to reflect Group Technology as a cost-effective service provider compared with local and international companies.
  

Compliance, risk and fraud containment remained a key focus, and it is expected that the demands for improved innovation in these areas will continue to rise. In 2009 the market experienced a continued increase in internet fraud attempts, primarily through phishing attacks. A well-defined phishing response process remained effective, ensuring that Nedbank’s losses were well-contained.

Top projects

The following projects were launched in 2009:

• The Siyakha Programme in Nedbank Retail, which is a top-priority programme to take care of the technical transition from multiple, disparate architectural frontend systems to a single, stable, flexible frontend system based on the Nedbank Channel Framework for all banking platforms.

• The Channel Convergence Programme (commonly known as NetBank Business) in Nedbank Corporate and Business Banking, which is a combined effort between these clusters and GroupTechnology to consolidate Nedbank Group’s multiple electronic banking channels and systems. This project will ensure that Nedbank Group retains its market share and grows in line with the market, while simultaneously realising investment benefits by rationalising systems and optimising operations. The project will also reduce the ongoing system implementation cost of meeting compliance and regulatory requirements.
  
• The Wallstreet Programme in Nedbank Capital focused on the development of an integrated platform to supply high-volume trade processing and volume growth by delivering high-performance straight-through processing and low transaction costs. It will help improve productivity, reduce operational risk, and facilitate client retention and new business opportunities.
  

Africa IT initiatives

Having started in 2008, the Africa Programme made significant progress in 2009. The programme consists of the following initiatives:

• Africa 1 (crisis), which sought to resolve high-client-impact issues such as month-ends, statement mismatches and balance mismatches. The majority of these have been resolved, as indicated by the reduced number of incidents and severities.
  
• Africa 2 (stabilisation), which was implemented in 2009 and dealt mostly with improvement of the infrastructure. This project was completed on time and within budget. The budget to improve the environments for each of the Africa subsidiaries further has been approved.

• Africa 3 (core banking system upgrade), which was started in the last quarter of 2009 with the aim of upgrading Zimbabwe and thereafter Namibia to Globus T24.
  

The cooperation between Nedbank Group and Ecobank IT has also been improved, facilitating a strong working relationship to the benefit of both organisations.

Other initiatives

Group Technology remains convinced that the combination of the adoption of best-of-breed solutions and reuse of existing legacy applications represents the right and most cost-effective competitive strategy for Nedbank Group. To this end the following progress was made:

• The SOA Centre of Excellence was established. Patterns, processes and guidelines were defined, resulting in the first phase of common and reusable services being developed, deployed and reused. The Group Technology IT vision is based on SOA, which promotes business agility and flexibility.
  
• Initial hardware and software were procured, implemented and configured for the Home Loans Grants Pilot Project.
• The Retail self-service internet channels were comprehensively refreshed to enhance delivery.
• An upgrade of the client information system (including service enablement) was implemented to provide an enhanced view of client information in Nedbank’s move towards client centricity.
  
• The strategy and technology choice for the replacement of staff-assisted channels was ratified. Phase 1 and Phase II are on schedule and budget.
  
• A reporting portal was created for the automation of various manually produced reports as well as various new reports.
  
• Various automated finance and economic BA returns were submitted to the SA Reserve Bank (SARB) to replace the previously manually produced returns.
  
• Nedbank will meet the SARB deadline of June 2010 for reporting on the ‘correct days in arrears’ methodology.
  
• The previously manual process of home loans policy product conversions was automated, saving the business more than 100 hours a month and eliminating capture errors.
  
• The Wholesale Banking Technology Division managed 56 project releases and implementations in 2009.
  

Group Technology fully supports and contributes to Nedbank Group’s vision of being a responsible corporate citizen. Green IT projects have significantly reduced paper and electricity consumption in data and office campus centres, and travel has been limited through innovative use of multimedia technology. A coordinated strategy has been shaped to build on successes throughout the next three years.

In 2009 Group Technology established a Vendor Management Office (VMO) under best-practice guidelines. This has been extremely successful in its first year of operation, yielding more than R70 million in direct and indirect savings by tightening up on vendor management. Equally pleasing has been the positive feedback from Group Technology and the vendors themselves in the more structured and professional approach that the VMO has introduced, and we expect this positive trend in savings and relationships with our strategic vendors to continue.

More than 50 significant projects were successfully delivered in 2009, with the number implemented on time and budget well within the industry benchmark of top-quartile performance. Productivity benchmarks in the innovation business continue to reflect improvements in cost and time delivery of function points. The capacity buildup over the past three years, as well as productivity improvements, has ensured that all the innovation requirements of the group were serviced during the year.

Nedbank Group continued successfully to deliver on its Swisscard contractual obligations in 2009. The execution of operational deliverables against contracted service levels remains at the highest standard, with all critical service levels consistently being met and the financial performance for the year being very good and exceeding forecast profitability.

Nedbank Group’s contract with Swisscard expires at the end of 2010. Both parties are working constructively together to ensure a smooth migration to Swisscard’s future processing platform.

Finally, a client satisfaction survey conducted with the help of over 5 000 employees in Nedbank Group showed a positive increase in the overall satisfaction rating from 71% to 72%. Strategies have been put in place not only to focus on areas of underperformance in clients’ perception, but also to build on areas where Group Technology has become strong in delivering good service.

Prospects for 2010

Group Technology will continue on its path to become the business clusters’ preferred technology partner and outperforming relevant industry benchmarks. The Group Technology business strategy for 2010 through to 2012 has been shaped to drive significant improvements in:

• Closer alignment with business divisions and clusters to ensure greater end-to-end accountability by functions in Group Technology and improved agility in delivering services and innovation projects.
  
• Project prioritisation directly to reflect not only positive business cases, but also meeting group strategic targets in the longer term and ensuring advancement of the technology architecture.
  
• Group Technology’s performance in 10 key areas through a Strategic Improvement Programme (SIP). SIP will consist of around 30 subprojects aimed at measurably and significantly improving Group Technology’s performance in areas that further its mandate and group needs.
  

At the same time Group Technology will continue to build Nedbank Group’s future IT landscape, guiding three-year technology and business-aligned roadmaps. This will assist Group Technology in its continuous quest to provide flexible and cost-effective IT solutions that evolve quickly and easily to suit the requirements of Nedbank Group’s business clusters.