The Victorian Government has revealed that Indian IT services company Infosys has opened a new datacentre in the state capital, just as other companies lay out expansion plans for the state.

“We’re investing $8 million in a datacentre to support the growing client demand for our range of cloud services across HR, procurement and other functions,” Infosys Australia chief and managing director Jackie Korhonen said in a statement from Victorian ICT Minister John Lenders’ office.

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ANZ will outsource its mortgage processing operations and move to full automation, affecting 248 jobs, mostly in Sydney, Brisbane and Perth.

The move, which was announced to staff yesterday, will result in a further expansion of the bank’s Bangalore operations in India.

About 40 jobs will be relocated to the fast-growing facility, with ANZ activating the $10 million program it jointly announced with the Finance Sector Union last month to retrain employees affected by the controversial practice of offshoring.

A further 150 workers are expected to be absorbed by the two external service providers, one of which is believed to be Perpetual, which will undertake the document processing.

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IT outsourcing firm Tata Consultancy Services Australia has retrenched 15 employees in its global banking service division as the worldwide financial sector heads south.

“Because of the situation in the global banking industry, we have had to make some adjustments in this area of our business,” a TCS spokesman said.

“Our Australian operation continues to perform very well in our core IT business areas.”

He said the move would not affect TCS customers. The company is part of a consortium performing mainframe and application services for Commonwealth Bank.

“This change in no way impacts any of our current customers in Australia and we will continue to recruit skilled professionals here according to the needs of the business.”

He said headcount in TCS’ financial services group has almost doubled over the past 12 months, growing to 250 employees.

Last year, TCS local chief Varun Kapur said it planned to grow overall headcount to 1000 by mid-2008.

TCS was overlooked by Commonwealth Bank and National Australia Bank for their lucrative core banking overhaul projects, worth hundreds of millions of dollars.

However, TCS continues to have close relationships with other high-profile customers such as Qantas and Woolworths.

The move is part of sweeping changes to Australia’s second-largest financial services group.

It is being pushed through the organisation by its board, which is led by Michael Chaney and last week appointed Cameron Clyne as chief executive from November 1.

NAB is the second bank, after the Commonwealth, to commit to replacing its 40-year legacy core banking systems, and the first phase of the project will deliver an online platform to a new business division, Star Direct.

NAB will spend about $30 million to launch a direct banking service, Star Bank, which will deliver customer services solely by internet and call centre.

Star Bank offerings will be launched later this year, with the aim of strengthening NAB in the direct banking market.

“We know there are customers more oriented to a direct branch service that is more innovative and direct,” NAB retail executive general manager Andrew Thorburn said.

“This service will help us get to those customers.”

NAB chief information officer Michelle Tredenick said the bank’s systems weren’t equipped to handle heavier workloads.

“Our platforms are able to deliver what we need right now but they’re not sufficient to underpin our future growth strategy,” Ms Tredenick said.

NAB has selected US software group Oracle to develop and deploy the infrastructure to support Star Bank over the next five years.

This is the first phase of the bank’s plan to deploy next-generation platforms across the business.

Oracle will work with NAB to design and plan the two remaining phases of the core banking overhaul.

Earlier this year NAB finance chief Mark Joiner said the bank would spend about $1 billion overhauling its core banking platforms, and this would be included in its technology budget over the next five years.

Ms Tredenick would not disclose how much Oracle was being paid for the first phase and early development work on the billion-dollar project.

Oracle was preferred over Indian outsourcer Infosys for the job, and Ms Tredenick hosed down reports that there had been internal conflict over the contract.

“We’ve had all my business colleagues, a technology sub-committee chaired by Andrew Thorburn, and the board and group executives involved,” she said yesterday.

“It has been an incredibly inclusive process and this is a unanimous decision.

“There has been no conflict in our organisation.”

The Commonwealth Bank is several months into a four-year, $580 million core banking modernisation project to speed the development of new online products and their deployment to the market.

The bank declined to say what stage the project was at.

ANZ has announced an overhaul of legacy systems in its Asian operation, and their replacement with the Infosys Finacle platform.

It is planning to expand this platform to its local operations.

Westpac has said it will not rush into any project at this stage.

The second and subsequent phases of NAB’s core banking overhaul will be rolled out in parallel. Planning for the following stages was expected to take another six months, NAB said.

The bank was using Indian outsourcer Infosys to introduce business process outsourcing as part of its sustainable outperformance strategy, Ms Tredenick said.

“One of our key sustainable outperformance strategies is to make sure we’re very well buttoned up on our quality of service initiatives.

“As part of that we’ve been doing processing work with a number of companies, including infosys, and some of that has been business process outsourcing,” she said.

The programme, launched on July 3, by Senator the Hon. Kim Carr, Minister for Innovation, Industry, Science and Research, will bring together the best technology minds from industry, six Australian universities and Government to develop an ambitious R and D programme aimed at creating intellectual property (IP) of value to Australia’s services market – with initial demonstrators planned for the finance, media and government sectors.

Over the course of the programme, this IP will be engineered and commercialised by CRC participants resulting in new technology products and services that will increase the competitiveness of Australia’s IT industry and make the services market more innovative, Infosys said in a release here today.

As the only global IT services company involved with the programme, Infosys is spearheading the Smart Service CRC from a technology perspective alongside SAP, with industry heavyweights including Telstra, Fairfax Digital and Suncorp-Metway actively involved in setting the research agenda. World-class researchers from around the country will also contribute to the R and D and IP creation.

“Innovation is imperative for growth and with Australia an emerging market on the global IT stage, we are pleased to be contributing to the development of the industry in such a significant way,” said Gary Ebeyan, Chief Executive Officer of Infosys Australia.

But she did state that Westpac would continue outsourcing and offshoring operations.

In a statement responding to the reports, FSU called on the federal government to “review all bank licensing arrangements to ensure that Australia’s major banks maintain back office jobs in the country”.

Leon Carter, national secretary, FSU, says the offshoring would “hollow out the Australian finance industry, leaving a nation of bank shop fronts”.

“Back office workers are the backbone the Australian’s major banks performing hundreds of important task such as handling customers’ sensitive banking information,” says Carter. “What’s needed now is for the Federal Government to take this opportunity to rein in the Banks and protect bank jobs from being sent offshore.”

In 2006 Westpac was forced to shelve plans to shift over 400 loans processing jobs from Sydney to an offshore centre in Bangalore after New South Wales Premier Morris Iemma warned that any move would be taken into account when a lucrative contract the bank had with the government expired.

Mohit Soapbox:
The product business is a relative smaller component of Infosys overall revenue stream and has grown YoY but still contributes minimally to the business. I don’t see Infosys turning into a product company for revenues and will primarily continue to be a services company unlike it’s competitors like iflex which is primarily a product based company.

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IT bellwether Infosys Technologies on Wednesday said it has bought advanced technology module from an Australian company to enhance the features of its banking software product Finacle.

“We have acquired IP (Intellectual Property) from an Australian company this month to add more functionality to Finacle. The IP, which provides a comprehensive set of financial tools to our existing product line, is suitable for large banks in European countries who use advance technology,” Infosys Technologies banking division (Finacle) Head Haragopal M said .

He said Finacle with the IP module would be priced separately, which would add to the company’s topline and bottomline in the current financial.

“We do see this as adding momentum to Finacle. A good traction is already there,” Hargopal said.

When asked about the deal size, Hargopal said, “As per our understanding we cannot name the company from which we have acquired the technology and at what price.”

Finacle is used by 109 banks spread across 60 countries in the world. Finacle clocked a turnover of $150.8 million, registering a growth of 31.7 per cent year-on-year.

Finacle, the universal banking solution from Infosys, empowers banks to transform their business leveraging technology. The solution addresses the core banking, e-banking, Islamic banking, treasury, and wealth management and CRM requirements of retail, corporate and universal banks worldwide.

The company faces competition from TCS, Oracle’s Flexcube, Temenos and Misys.

Speaking at the future site of the development at Deakin University’s Geelong campus on Monday, Satyam founder and chairman Ramalinga Raju said: “We are delighted to be able to announce Geelong as the location of the new Satyam Technology and Learning Centre and we look forward to cultivating new friendships with Victoria and Australia.”

Geelong is located 70 km southwest of Melbourne, the capital of the state of Victoria.

State of Victoria’s Premier John Brumby said the centre was expected to boost the state’s economy by around Australian $175 million ($161 million) annually within a decade.

Brumby said: “Satyam’s decision showcases what Victoria and regional centres like Geelong have to offer big business. This is great news for the people of Geelong and Victorians generally. This new project will more than double the current number of Satyam jobs in Australia.”

The new centre will mirror the company’s campus-like facilities at the head office in Hyderabad and feature facilities for training, research and development, a convention centre and housing.

Satyam will source around 70 percent of all recruits for the new Geelong centre from Victorian and Australian universities. The company has laid major emphasis on local employment generation and today over 42 percent of associates in Australia are local nationals.

It will train and employ local ICT professionals to develop and provide end-to-end IT solutions for Satyam’s 570 customers including Coles Myer, Medibank, National Australia Bank (NAB), Nestlé, Optus, Qantas, Queensland Rail, Suncorp, Telstra, Unilever, Vodaphone and Westpac.

The state’s Information and Communication Technology Minister Theo Theophanous said: “Victoria is the largest source of ICT university graduates in Australia so it is fantastic to see global companies recognising the value of our highly-skilled workforce.”

Victoria’s ICT sector generates annual revenue of $24.4 billion, exports of over $1 billion and employs around 85,000 people, over a third of the national ICT workforce.

Deakin University has recently signed a Memorandum of Understanding (MOU) with India’s major biotechnology company, Biocon. Biocon is helping Deakin in establishing a mammalian cell bioprocessing facility at the Geelong Technology Precinct (GTP) at the university’s Geelong Campus.

Some of the other top Indian ICT companies already located in Victoria include Birlasoft, iGate, Infosys, NIIT, Patni, TCS and Wipro.

Earlier in March, India-based global integrated technology and operations company, iGATE Global Solutions Ltd announced that it would be investing $2 million and creating up to 40 new jobs in the picturesque and affluent historic gold mining city of Ballarat in Victoria.

Wipro Australia manager Manoj Nagpaul said contractual delays with the lease led to the delay.

“We selected the place but negotiations didn’t go through because of some hiccups concerning contracting, so we had to start searching for another property,” Mr Nagpaul said.

“It will still be in Sydney’s west and we will start with 50 employees, as indicated before,” he said.

The centre will handle consulting, development and testing services for Wipro’s customers.

Local customers include Telstra, ANZ Bank, Axa, Cadbury’s, and Hutchison.

Meanwhile, Wipro Infotech president Suresh Vaswani said the company was working on a large-scale SAP human resources project to keep track of its engineers worldwide.

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THE Australian Federal Police says it is prepared to allow software development work for an overhaul of its core policing system to be sent offshore.

A spokeswoman said the application development work, which will touch databases containing highly sensitive operational information, could be sent to contractors located offshore provided they met the agencies’ security requirements.
“The AFP’s preference for the development of these applications is that they be performed in Australia, but on request, on a case by case basis, the AFP may permit the services to be undertaken at sites other than Australia.

“It must be demonstrated that there is a benefit to the AFP in sending the work offshore and there are no sensitivity or security issues with that company accessing that database,” the spokeswoman said.
The organisation would not allow any of its systems or data to be hosted offshore as part of the project, she said.
The AFP released a tender in December calling for software companies to join a panel of suppliers to replace its current Police Realtime Online Management Information System (PROMIS) with a new system codenamed Project Spectrum.
The tender documents reveal that the system will be replaced gradually over the next four years.
They also show that the AFP expects to spend about $84 million on application development over the same period. Last year the Australian Taxation Office refused to allow work on a $724 million overhaul of its tax processing systems to be taken out of Australia after its main technology supplier for the program Accenture proposed it send some of the development work offshore.
The Australian Customs Service also flirted with offshoring under a recent $70 million a year IT outsourcing program.
Indian firm Hexaware was asked to bid for Customs’ software development panel but did not make the final shortlist.
A spokesman for Finance Minister Lindsay Tanner said the AFP was required to make the tender open to comply with trade agreements to which Australia is a signatory.
However, the Commonwealth procurement rules also allowed the agency to impose security rules on tender applicants, he said.
Tender applicants will have to ensure that their subcontractors and employees can meet the requirements of the Commonwealth Protective Security Manual, the Privacy Act and the AFP Act.
The AFP may also require contractors to undergo drug testing and other security clearance tests.
It has told bidders that it may need to “engage” their employees as AFP appointees in cases where they’re required to access sensitive information or work on the agency’s premises.
The AFP is scheduled to announce the successful bidders for the panel next month.