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Incorporating Colonial

Incorporating Colonial

As if Australia's vast distances were not challenge enough, the Commonwealth Bank of Australia's Colonial Retail Bank amalgamation program was also threatened by a lack of capacity and looming industrial action within third parties.

When the Commonwealth Bank and Colonial State Bank merged, an integration nightmare loomed. Under pressure, the banks put a new project management philosophy into action - and turned a potential disaster into an award-winning success.

The year 2000 merger between the Commonwealth Bank of Australia (CBA) and Colonial State Bank created the country's biggest bank and financial services group, with a nine million-strong customer base. The merger allowed genuine cost savings and efficiencies, and gave the CBA greater exposure to the rapidly growing funds management market. But it also had the potential to become a logistical and technological nightmare: significant mismatches between the two banks' IT systems, outsourcing arrangements, business models and culture; vast distances between branches to be amalgamated or re-badged; and an extremely tight deadline for resolving the difficulties - all presented major hurdles to be leapt.

In the system incompatibilities and the sheer number of accounts affected lay all the seeds of calamity. Instead, the Commonwealth Bank of Australia/Colonial Retail Bank amalgamation of physical network system and conversion of accounts was a triumph - so successful it was awarded the 2002 NSW Project of the Year in the Project Management Achievement Awards (PMAA) presented by the Australian Institute of Project Management (AIPM). The award recognised the complexity and sheer scale of the project and the tightness of the time frame involved. The project also won the award for the best project in the field of business change and IT management and went on to take the number two spot in the PMAA's national awards.

Complex the work undoubtedly was. Ultimately the integration project, completed within just three months, saw the CBA: reconfigure 290 branches and re-badge 89; train 4500 staff on CBA/Colonial products and systems; install 5100 pieces of new IT equipment; and relocate more than 600 ATMs. It involved the upgrading of 499 branch communication infrastructures, the mailing of 390,000 pieces of correspondence to customers and the termination of more than 260 leases, including 131 restrictive "Required to Trade" leases, within 100 days and over the Christmas period, no less. And it meant having some 150 vendor/contract staff active on any weekend completing amalgamations and re-badges, since all work had to be completed out of business hours.

Moreover, with the two banks' IT handled by two different outsourcers, two organisations had to decommission equipment and install new equipment. Managing both vendors in a very tight time frame presented a very real challenge.

General manager change and program management Michael Skyllas says the merger's successful completion has proved a watershed for the bank, transforming its thinking on its governance structures, senior management support and the focus required to ensure project management success. "We trained a lot of people on the project management methodology we were trying to put in place; we got a lot of support about applying that rigorous process consistently across the bank. And I think the bank has made large strides in managing all its projects, no matter what the size," he says.

Before the integration program the CBA had neither divisional program offices nor a formal program office. In an indication of the lasting effect the successful project has had on the bank, program manager Rohan George says the program office set up within the infrastructure services business unit to carry the merger lives on, staffed by fundamentally the same senior team that ran the distribution network integration program and branch network amalgamation program. The longevity of the office is testimony to their success, he says.

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