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Banks Become Upgrade Hot Spot
By John Moore, Ziff Davis Internet


A recent survey indicates banks around the globe are planning upgrades, and that opens opportunities to systems integrators and outsourcers.


Banks are emerging as an upgrade hot spot for systems integrators and outsourcing vendors.

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A survey commissioned by Accenture Inc. and SAP AG indicates that banks around the globe are planning to upgrade aging core banking systems. Three quarters of the bank executives polled cited lack of flexibility as the biggest problem affecting banking systems, with half the respondents describing poor integration and high maintenance costs as key troubles.

As a consequence, banks plan to replace core banking systems. Twenty percent of North American respondents said they expect to replace banking systems within the next five years. That figure is 30 percent in Europe and 35 percent in Asia Pacific. About 1,500 bankers participated in the survey.

While the survey points to future projects, large-scale bank deals have already come to the forefront. Earlier this month, Dutch banking giant ABN AMRO awarded $2.2 billion in outsourcing contracts to five vendors. Those companies include Accenture and IBM and three Indian companies: Infosys Technologies, Patni Computer Systems Ltd., and Tata Consultancy Services.

Infosys called the deal "the single largest multi million Euro contract" the company has ever won. Patni said its slice of the project represents the extension of an existing relationship. Tata, meanwhile, called its share the "largest deal won by an Indian IT services company."

The Indian company's success on ABN AMRO lends credence to the assertion of one consulting firm that outsourcers based in India will increasingly give U.S. and European firms a run for their money

Katzenbach Partners LLC believes established outsourcing players in the U.S. and Europe are struggling to control rising infrastructure costs.

The companies will bid for applications and development projects supporting ABN AMRO's operations in Europe, North America, and Brazil. ABN AMRO terms this program the Group Shared Services Information Technology initiative.

The Accenture/SAP survey suggested that vendors hoping to win favor with banks will have to address the divergent needs of both business and IT managers.

The survey also found that 40 percent of the IT-oriented respondents seek a system that reduces expenses. But 39 percent of the business executives polled cited product innovation as primary value they hoped to obtain from a core banking system.

The Accenture/SAP study defines core banking systems as those that let banks manage basic financial products and services, including deposit accounts, loans, mortgages, and credit cards.

Unisys Wins Columbian Outsourcing Deal

Unisys Corp. and Synapsis have captured a $27 million outsourcing contract from ECOPETROL, Colombia's state-owned oil company.

The 4-year deal is worth $14 million to Unisys and $13 million to Synapsis.

Unisys will maintain the oil concern's 200 servers and manage its network, security and service-desk operations. Synapsis will manage the company's 200-plus applications and provide data center management, telephony and videoconferencing services.

Synapsis is a business unit of Endesa Group, a utility that generates power in Spain, Brazil, Argentina, Chile, Colombia and Peru.

The Columbian contract represents something of a departure for Unisys in terms of market coverage. A spokesman for Unisys said the energy industry "isn't one of Unisys key global focal market sectors." He said the contract award came about because "our capabilities fit the client's requirements for IT infrastructure outsourcing."

Next page: Manhattan Associates inks deal with CSC.

     
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