news Financial services giant Perpetual has signed off on a major IT transformation project involving the outsourcing of some key functions to Japanese IT services giant Fujitsu and the modernisation of key aspects of Perpetual’s applications and IT infrastructure.
The potential for the deal was first highlighted in late June this year, when Perpetual chief executive officer Geoff Lloyd noted the company was planning to embark on a three-year business transformation strategy that would significantly simplify the company’s corporate structure and refocus its operation. At the time, one of the aspects of the transformation mentioned was the fact that Perpetual had “issued requests for proposals for potential IT outsourcing arrangements, with vendor negotiations nearing conclusion”.
Perpetual manages investment funds of close to $23 billion, administers over $215 billion of client funds, and advises clients on $8 billion of investments as at 30 June 2012. It provides a range of services in areas such as investment and wealth management, including superannuation.
This morning, Fujitsu issued a media release noting it had signed a five year IT infrastructure and applications services outsourcing deal with perpetual, in a contract which the Japanese company said would allow Perpetual to “leverage Fujitsu’s proven best practices to modernise its IT infrastructure and applications as well as enable a number of service and capability improvements as part of its business-wide Transformation 2015 Strategy”. Perpetual was planning, according to Fujitsu, to “comprehensively transform its IT infrastructure”, including its networks, desktop PCs and applications. Fujitsu won the competitive tender to supply these services.
Delimiter received an anonymous tip last week with information relating to the deal, but representatives from Perpetual had not responded to a request for comment to confirm Fujitsu’s appointment by the time Fujitsu announced the deal this morning.
According to proposal documentation relating to the deal seen by Delimiter, Fujitsu will be providing both on-side and remote staffing resources to meet its responsibilities under the deal. The majority of Fujitsu’s support teams will be built the company’s delivery centres in Australia and New Zealand, although it may also use some offshore resources. Perpetual said in a statement to the Australian Stock Exchange this morning (see image summary at the bottom of this article that around 100 in-house staff would be affected by the move.
Throughout the second half of 2012, Fujitsu is planning to implement its TRIOLE service desk platform at Perpetual to take service requests from Perpetual’s staff. It appears as though the company is also planning to use a number of monitoring and software management tools from software vendor CA.
Perpetual has undergone a great deal of change with respect to its technology operations over the past several years. For instance, it has a new chief information officer, Jenny Levy, who according to her LinkedIn profile has been with the company for less than a year, after leaving her period role as general manager of IT at Sydney Ports Corporation. Levy was previously a long-time senior IT executive at Westpac, which she left in 2011. The company’s previous CIO was Brad Aurisch, who held the role from July 2010 through October 2011, according to his LinkedIn profile, after a period with the company stretching from November 2006.
The round of outsourcing with Fujitsu is also not the only technology outsourcing project Perpetual has undertaken in the past 12 months. In October 2011, for instance, the Financial Review reported that the company had decided it would hand a substantial amount of development work to Macquarie Investment Management. The company also recently brought in a new group executive of Operations, Richard Vahtrick, who had previously spent 33 years at IBM, making him a very senior executive with the company.
Hmm. I don’t envy Fujitsu’s task at Perpetual. It seems likely that this will be quite a large IT rejuvenation project. I haven’t heard much about Perpetual for a few years, and I suspect that Fujitsu will find the usual run-down IT infrastructure you tend to find in financial services firms which haven’t kept on top of things for a few years — legacy applications which are poorly supported, Windows XP everywhere, dated desktop PCs, network infrastructure which isn’t capable of unified communications and so on.
This looks like it’s going to be one of those “fixer upper” projects. I would be surprised if the full extent of IT upgrades needed at Perpetual were yet visible to external parties. The good news is probably that this could actually provide quite a few opportunities to skip some of the usual upgrade cycle pieces. For instance, I note in this October 2010 interview with then-Perpetual CIO Brad Aurisch that the company was at “various stages” of its virtualisation journey.
Fujitsu’s media release doesn’t mention servers, but I suspect that this journey is not yet complete, and that Fujitsu may be able to assist Perpetual in moving to a much more dynamic basis with some of these components of its IT infrastructure, given Fujitsu’s obvious strengths in Infrastructure as a Service. Given that Perpetual is already outsourcing large chunks of its IT operations, this kind of more flexible infrastructure choice could prove attractive to the company’s management. I do also wonder to what extent Perpetual depends on mainframes for some of its financial apps. Fujitsu also has an obvious competency in this area, as well as its helpdesk skills etc.
In any case, it will be interesting to see how the Perpetual journey in general plays out over the next several years. Time to add yet another name to the list of major Australian financial services firms undergoing large IT transformations.
Image credit: Opening of new Fujitsu datacentre