Monday, May 18, 2009

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Westpac backflip on India jobs shift

Source: TheAustralianBusiness
WESTPAC has dispatched a strike team to India as part of an offshoring reconnaissance mission a week after the bank's chief, Gail Kelly, drew widespread praise for suspending the practice of sending jobs overseas.

The Australian understands the bank's top technology executives have travelled around India over the past two weeks to meet with about eight outsourcing companies.

Two outsourcers will be selected to perform a range of work and are set to benefit as Westpac spends hundreds of millions of dollars over the next couple of years to update core banking systems and integrate complex technology functions as part of the $12 billion acquisition of St George bank.

Several sources confirmed the Westpac contingent met with technology firms Accenture, IBM, EDS, Wipro Technologies, Tata Consultancy Services and Infosys, as well as one or two others.

A fortnight ago Ms Kelly announced she had put the brakes on Westpac's offshoring of Australian-based jobs, a decision prompted by the recession and expectations that unemployment could rise next year to 8.5 per cent.

"I've decided to suspend further offshoring until conditions improve," she said.

Westpac declined to comment on the visit to India or the bank's future offshoring plans.

Ms Kelly's commitment to keep jobs in Australia followed a three-year undertaking by Commonwealth Bank chief executive Ralph Norris not to send jobs offshore.

Westpac's stance also drew praise from Finance Sector Union national secretary Leon Carter who said the bank had sent 460 back-office jobs overseas, mainly to India, and was probably considering a similar fate for "1000 or more" other positions.

"This is an excellent outcome because maintaining jobs in Australia is of paramount importance," Mr Carter said at the time.

It is believed Westpac plans to set up a two-vendor panel which can be called on when necessary to perform a range of work.

The prospective outsourcing vendors were not provided a specific brief by Westpac but were asked to pitch for where they could offer technology services to the bank.

It is not clear whether there are plans to set up a "captive" outsourcing centre similar to ANZ's Bangalore facility which houses more than 3000 staff.

The winners will benefit from the merger of St George and Westpac, which is slated to cost $700 million when completed, with half of the spend expected to cover the integration of the banks' technology systems.

It is believed the outsourcers panel could be drawn on to complete the lion's share of this work as well as lucrative work to update Westpac and St George's core banking systems.

St George has already outsourced the support and maintenance of key legacy systems to Indian firm Infosys.

There has been a surge in local technology work over the past year, spurred by several legacy system overhauls and consolidation across the financial services industry.

An industry source said banks had been forced to look for resources overseas because of the limited technology talent pool in Australia.

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