Development of a single ICT system for the merged ANZ and National Bank took 10 months longer than estimated and has come out 20 percent over its original budget.But Craig Sims, ANZ's chief operating officer, says the move will streamline the combined operations and improve customer service. The ICT rationalisation, which completed its implementation phase on the last weekend of October 2012, was known as the "simplification" project. Simplification is an overall theme running through the merger and rebranding, says Sims. "It doesn't start and stop with the project; it's just what we think is good for our customers."Now the bank has combined the two systems. "If we want to bring a new product or service or a new internet banking feature into the market quickly, we can do it for all our customers and they'll all [immediately] enjoy the benefit of that.""In the past, we had to build it twice. Some customers would get it a few months later than others," he says. "Now whatever we choose to do, all our customers get it at once."The new system is based on the Systematics applications suite used by the National Bank. The ANZ moved its entire client base onto the National Bank IT systems. "That was 2.6 million customer records, 2.2 million loan and deposit accounts, half a million security records -- and a lot of money was transferred," says Sims.Why switch ANZ customers to the National Bank system rather than vice-versa? "That was because when we looked at the systems, from a customer experience and from an overall scalability point of view, they could both do similar things, but the National Bank one was better for us in terms of what we needed for clients; it was scalable and had the sort of size and structure that we wanted," he says."The National Bank has a good record of customers rating it highly on service. The backbone of that service is the products, processes and systems that are connected to make that experience happen day-in day-out. It all starts with the customer at its heart; you come into the bank and we enter you as a customer, then we build the services around you; that's why we chose the National Bank."So in the last couple of years, we've been investing in the National Bank internet banking service, doing new features and functionalities around payments, providing customers with access to two years of bank statements, et cetera. The National Bank clients were rating it very highly, so we wanted to deliver that for all our clients."ANZ/National has one in two New Zealanders banking with them (about two million people) "and we had to make sure [the new system] could cover that base," he says. "Systematics is run by very large organisations outside New Zealand, much bigger than our marketplace, so it met our requirements in terms of being able to cover the whole client base."The ICT rationalisation fits into a much larger rebranding exercise. The decision to merge the two brands completely and extinguish the separate National Bank brand was taken only in the last two years. "The genesis of the brand merging lay in the global financial crisis," says Sims. "Back in 2003 when ANZ and National came together, the market accepted a two-brand strategy. At the back end of 2010, we were coming out of versions of the global crisis. That taught us banks need to be strong, in terms of their being well-capitalised and well run. We're part of a 32-country business in ANZ, so we want NZ to be a strong part of that -- when we looked at the [two-brand] model we found we had duplication, in the sense of two IT systems, two sets of processes, and two products. That was a complexity for us and our customers that we wanted to remove, to make it easier for customers to get to us as a bank."re bank systems."Dress rehearsalsSims acknowledges the bank underestimated the size of the task, particularly the testing phase. "This programme started at the start of 2011 and we wanted to energise and engage the organisation so we set the goal of doing the conversion in the calendar year 2011. As we got into it with our planning and checkpoints, it became obvious that the organisation needed more time to get it right for our customers. "That's when we said we'll extend it and we'll go for the October 2012 conversion. The benefit of that extra time, the planning, the preparation, the testing and everything else paid off for us, because the conversion -- considering the size of the project -- was relatively smooth."The breadth of testing needed proved unexpectedly large, he says, on the rationale behind the new timetable. The bank had to make sure the new system was tested sufficiently."Banks live and stand on their own based on trust," Sims explains. "So if we'd put our customers at risk by going too fast for the sake of meeting an early delivery date -- and not proving to ourselves that everything was working correctly -- then that's not a position we want to put ourselves in. The right thing for the customers was to do extra testing to prove to ourselves that it was all working -- to prove not only that the conversion was working but that we could convert the bank over in a 48-hour window."The practical side of that latter proof included four "dress rehearsals". The last two were "full mock rehearsals -- real time, real executives involved, role-playing, everything we could think of -- to give us that comfort of knowing we could convert in a weekend and once we converted that the full system would work end-to-end."The final "performance" went smoothly and all customers are now working on the new system. "So we're past the conversion stage and into what I'd call the fine-tuning bedding down stage," Sims says. "That's about making sure it all works; that we give customers and our staff time to get used to all the new features and functionality. "My analogy is switching from a Microsoft to an Apple computer. You've had the first for many years; you're not sure why you've got it, but it works."You go to the new one. It's well-marketed it works, but it's different. So you need a bit of time to get used to using it. Most of our customers are past that stage."In the first week or so, there were a lot of people calling our contact centre. We're pleased that all the payments and all the things we take for granted day in day out carried on working with reasonable performance."The next six months for us will be a period of fine tuning; making sure everything stays operationally working as it should and listening to our customers [as part of] the fine-tuning. We've had some feedback about payments; people would like some more flexibility about how they edit payee details on an online banking item. So around March we'll be having an update."How will he gauge the success of a major project? "There are four criteria I apply for success," he says."Upfront, does everyone know what success looks like? Is everybody inside the organisation and our partners and our 32 overseas companies at the group level aligned on what we're trying to achieve?"The second is compiling a talented team of people to meet the goals. "In our case, this included people from IBM and Fidelity Information Services (FIS)," says Sims. "IBM was brought on board because they have a global team that's done 2000 core bank conversions."We have a core banking system and a credit-card system; Fidelity were helping us on the credit-card system, but they're also the owner and provider of Systematics so they are onsite also helping us with the core bank systems."Those teams were strongly supported from inside the bank, by people who know how the bank works. One of the reasons for choosing Systematics is that it's one of our two systems we know and use today. So if you know it and operate it, you de-risk the project; that's what we believed. So we had internal people doing all that; being part of an international organisation, we had people working for us at the group level, in Melbourne and in Bangalore, all coming together with our local teams to make this a success."The third ingredient of the success recipe is "using tried and true processes". Hence, he explains, the likes of IBM, which has done this before, coming on board.The fourth is using strong project management disciplines. "With something this large and being the full change of an organisation -- systems, processes, product, customers, and staff -- you need to coordinate that tightly," says Sims."From a leadership point of view, project disciplines help you to know where you are in the journey, and also, if needed, help you to flesh out the risk in issues, so you're on top of those early." Stephen Bell (@stevebwriter) is a staff writer at CIO New Zealand.