The potential implications of core systems replacements are so vast that most bank CIOs opt to mitigate the risks by taking things slowly and cautiously, converting one piece of the business at a time. But when it came to replacing his company's legacy core systems, Michael Redeker, CIO of ATB Financial (CD$32 billion in assets), knew caution would impede the bank from achieving the goals of the initiative.
So when the Edmonton, Alberta-based bank began reviewing options and potential technology partners, the question was, "What was the most effective way we could go through that process, and how would we assure a viable solution at the end of the journey?" Redeker recalls. As the RFP process began in 2007, the bank decided to go with a "large footprint" -- an end-to-end solution from a single vendor. This would help ATB Financial avoid replicating the legacy "bowl of spaghetti" that had resulted from years of add-ons and updates. "We wanted a core application that ran our organization," Redeker says.
In 2008, ATB Financial selected SAP's core banking solution -- making it the first bank in North America to implement the system, according to Redeker. "They had a solution we could add on to and mature as an organization," he relates.
But it wasn't just the scope of the technology that was unique. ATB Financial implemented the new core system "with a big bang," Redeker says. "We decided to do everything at the same time. We converted all customer records, all of our financial records, a full cutover of our suite of applications … on one weekend."
Not that it was easy. In the initial months after the system went live in September 2011, Redeker acknowledges, there were challenges around system stability, data conversion and the ability of the bank's employees to use the new tools. Knowing that such an aggressive rollout inevitably would encounter glitches, Redeker and his team relied on communication to get through any rough spots. "This was a large, complex implementation, but what made it successful is the collaboration among the folks across the organization, to continuously focus on improving the stability and improving the tool for our associates and what we were delivering back to our customers," he says.
Another success factor was the "very transparent conversation," the bank had with its 700,000 customers during the migration. "We were very open and honest with them" in communicating the difficulties of implementing the new system, Redeker notes. "We said, 'We know we're going to have some challenges, but trust us, we'll be there for you.' That ... really afforded the technology team the time to fix the issues once we went into production."
Asked why the bank committed to a game plan fraught with potential risks, Redeker concedes, "I will be honest -- as the CIO, I was very nervous about going down this path." But the anxiety and hard work have more than paid off. "Having gone through this, I am actually a big fan of what we accomplished," he says. If the conversion had been approached function by function, "It would have been a seven- to 10-year journey and significantly more expensive than the big-bang approach." Instead, ATB Financial was able to reap the benefits of its "tightly integrated solution" in a relatively short period of time.
The project also involved significant infrastructure enhancements, Redeker points out, and occurred at the same time as replacement of 75 to 80 percent of the bank's application suite; an IVR upgrade; and build-out of its disaster recovery site. "We truly transformed the entire organization," he says. "I'm quite proud of the team and what they accomplished in the past three years."