EDS to handle largest Aussie corporate merger

Building on an existing long-term relationship, EDS has been selected to work with the Commonwealth Bank of Australia to help manage the integration of most of the technology services and e-business capabilities resulting from Australia`s largest-ever merger - between the Commonwealth Bank of Australia and Colonial Limited.

The existing IT outsourcing contract between the Commonwealth Bank and EDS was signed in September 1997. The original agreement, which was already the largest IT outsourcing agreement in the banking industry, was valued at about US$3.0 billion over 10 years and has been credited with reducing the Bank`s annual IT expenditures by about 20 percent, while also improving service levels.

According to the Bank, the new agreement, including the Colonial IT expenditure, is anticipated to add up to US$700 million to the Bank`s IT outlays over the next seven years.

The Commonwealth Bank now has more than 10 million customers in 16 countries. "A key factor in the success of our merger will be the integration of both organization`s systems," says Russell Scrimshaw, Head of Technology, Operations and Property for the Commonwealth Bank. "When it comes to this integration, we have confidence in EDS to deliver in the same manner as they have over the last two and a half years."

This opportunity is substantial for both parties, with the Bank seeking a successful transition of IT services, continued E-business innovations and a significant reduction in the incremental IT operating costs. EDS, for its part, has the opportunity to increase an already significant contract.

While EDS has the opportunity to transition the majority of Colonial services, some existing agreements between Colonial and third-party IT providers are expected to be outside such an arrangement. Commonwealth Bank and EDS will work together over the next few months to finalize the details of the integration process.

"Our technology partnership with EDS allows us to maintain traditional and E-services for customers while moving quickly to integrate technology systems and deliver cost efficiencies," Scrimshaw says. "EDS knows the Commonwealth well and shares our understanding of the organization`s vision and goals. That approach will assist us to deliver on the merger goals of an enhanced product range and enhanced services as well as the shareholder returns associated with the growth of a larger, more efficient and more internationally competitive organization."

"Our focus has always been on delivering service excellence to our clients," says Jeff Heller, EDS President and Chief Operating Officer. "We are pleased that the proven quality of our service and innovative thinking is playing such a definitive role in our relationship with the Commonwealth Bank."

The merger between the Commonwealth Bank of Australia and Colonial Limited has brought together two highly successful and innovative organizations to create Australia`s largest, most diversified and most accessible financial services group. The Commonwealth Bank now has Australia`s largest financial distribution network, consisting of its branches, its business and corporate customer service organizations, independent financial advisors, its on-line network, EzyBanking in Woolworths and its nationwide agency arrangements with Australia Post.

The merger creates a financial services company that holds the No.1 position for domestic assets in banking in Australia and the No.1 position in retail funds under management. In addition, the merger enhances the Bank`s international representation, providing a platform for future international expansion and diversification, and maximizes the complementary strengths of the Commonwealth Bank and Colonial brands.