Financial services corporation, Absa, has announced an alliance with the world`s largest IT vendor, IBM, which will impact the bank`s intranet, e-business infrastructure and data warehousing machinery, among other projects.
The strategic technology alliance further commits both companies to the sharing of strategic information and know-how, which the companies believe will yield "first-of-a-kind" solutions in the financial services market.
"If you look at a business such as ours, you are always trying to protect your competitive advantage," says Bert Griesel, Absa Group executive director. "We are opening up our way of thinking to offer a strategic [advantage] on a long-term basis." Griesel expects the alliance to deliver a first-mover advantage, as well as the ability to offer a total solution at competitive costs.
According to Larry Hirst, IBM`s financial services sector VP (who rates Absa in the top five banks technology-wise in the world), the alliance allows IBM to "combine banking knowledge with technology".
Absa plans to use IBM`s WebSphere suite of products as the building blocks of its e-business infrastructure, interfacing Absa`s traditional banking systems with the Web. IBM intends to develop a component trade market for WebSphere components, which could see Absa-developed middleware components being used in other institutions wishing to combine information trapped in old-school architecture with the Internet.
Absa`s data warehouse machinery is already standardised on IBM equipment, and is currently undergoing an upgrade to the latest IBM technology. "Our operational model is built entirely around customer needs, and a shared services infrastructure," says Griesel. "A single customer view is of critical importance to all of our businesses going forward."
Lotus Domino will be used for Absa`s corporate enterprise messaging, which will convert its intranet into an integrated communications network, according to the company. The first pilot sites using Domino as integration software together with other third-party products will be launched in mid-2001.
An enterprise licensing agreement signed recently by Absa allows for considerable savings for software acquisitions and support, says the banking group.
Absa says it chose IBM because of its international reputation in the financial services industry, as well as its significant investments in research and development.
"IBM has helped build Absa`s current infrastructure and is therefore the natural choice for this alliance," says Griesel. IBM`s presence in countries where Absa conducts offshore operations is another driver.
"Key benefits resulting from these initiatives include operational efficiencies, effective technology positioning, improved services and cost advantages stemming from economies of scale and scope - all of which can be passed on to Absa`s customer base," says Hirst.
"In the new relationship, IBM will be able to gain a deeper level of understanding of Absa`s distinctive needs in the e-business and information technology arena and be in a position to advise on appropriate technology solutions for these needs," he adds.
The deal with IBM follows the major IT joint venture between the AST Group and Absa announced in July for desktop management, although the company notes that AST is not involved in the IBM/Absa alliance. The company notes that the alliance is non-exclusive, although Absa is the only banking group in the country with such an alliance with IBM.
The move forms part of Absa`s new IT model, which was implemented during the second half of last year. The new model, jointly designed by international consultants AT Kearney and Absa, is in line with global best practice in the financial services arena.
Absa is also considering a number of additional strategic alliances. "Watch this space," comments the company.
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