[LINK] Bug leaves NetBank customers in the dark

Bernard Robertson-Dunn brd at iimetro.com.au
Sat Jul 4 16:15:12 AEST 2009

A bit of history.

In 1997 the Commonwealth Bank outsourced all its IT to EDS with a ten 
year contract life. It sold its IT gear and IT staff to EDS. The 
decision to outsource had nothing to do with better IT but was to 
generate some cash and avoid making a financial loss that year.

Not a noble reason to outsource but at least they got one thing right. 
The whole lot, infrastructure (apart from comms, which went to Gen-i) 
and applications went to one vendor. Unfortunately most, if not all the 
corporate IT knowledge was gone from the bank and is impossible to replace.

Then the single vendor outsource deal gradually broke apart - the bank 
decided to take application maintenance away from EDS and give it to 
three organisations, HCL, IBM and Tata Consultancy. More loss of 
corporate knowledge.

It then decided to replace Gen-i with Telstra. Even more loss of 
corporate knowledge.

After many years, the bank realised that it couldn't actually do without 
some IT people - those who specified the requirements and who dealt with 
the IT providers. It discovered that the business groups had quietly 
hired upwards of 500 IT people. So it decided it should start to rebuild 
an IT department, starting with the 500 buried in the business.

It now finds itself with a multi-sourcing strategy. The bank says "As 
part of its multi-sourcing strategy, the Bank will be moving towards a 
multi-vendor panel approach to the delivery of applications services to 
achieve greater contestability, flexibility and enhanced delivery 
capability across the applications portfolio. Multi-sourcing is regarded 
as global best practice, particularly on application development and 

Best Practice my left foot! IMHO the term Best Practice is most often 
used to justify what's going to be done anyway.

My view is that the bank's IT development and support is fragmented. 
It's being done by people with little or no knowledge of what the bank 
is all about. A lot of camels will get developed and I suspect that 
NetBank is one.

The lesson I take from this sort of mess is that dividing up Information 
Systems into chunks and getting the lowest price for the services in 
each chunk will encourage two things: 1) gaps between the chunks and 2) 
a difficulty in managing the chunks that leads to a less than optimal 

In the case of the bank's current troubles, the problem is probably an 
interface issue between the mid-range NetBank applications and those 
running on their mainframes. Unfortunately the bank sold all its 
mainframe programmers to EDS years ago.

IT is hard enough without introducing unnecessary barriers to success in 
the name of competition. It might give those with a bean counter 
mentality a warm glow of satisfaction, but it makes life difficult for 
the rest.

I don't bank with the Commonwealth. If I did, I'd be thinking carefully 
about maybe moving.

Bug leaves NetBank customers in the dark
Chris Zappone
July 3, 2009

ONGOING problems with the Commonwealth Bank's internet banking system, 
NetBank, which prevented customers from seeing their transaction 
histories this week, have raised questions about the stability of the 
bank's IT infrastructure.

A spokesman said the bank "was working as hard as it can to get the 
issue resolved as quickly as it can", but offered no time frame for the 
faults to be repaired.

The problem emerged on Monday morning amid what the bank said was a 
possible cyber attack. It said it had since restored service to NetBank 
customers, although the ability to view past transactions is frequently 

"It's ridiculous," said the architect and small business-owner Scott 
Weston, who went to his Sydney branch seeking assistance on Monday only 
to be told he would be charged for the staff-assisted transactions. "The 
people in the call centre are being polite, but they don't really know 
what's going on," he said. "If I charged on an hourly rate, I'd be out 
of a day's work for all the effort this week."

A Sydney IT veteran with experience working at the bank and IT services 
company EDS said: "I would be very concerned that [the bank has] an 
issue like this that lasts so long.

"Either [the bank's] IT department wasn't prepared for the issue it's 
facing, or their disaster recovery plan hasn't worked," the IT expert, 
who asked not to be named, said.

"They should have highly detailed disaster recovery plans and that 
should spell out how long it would take to recover from anything," he said.

The criticism of the bank's technology comes 14 months after it launched 
its $580million core banking modernisation upgrade, announced after two 
years of research and development. The program, expected to last four 
years, has coincided with a number of glitches.

In October, a problem at the bank delayed Centrelink payments to 
thousands of people. Then in December, NetBank was crippled, making the 
site temporarily unavailable to customers.

The bank would not comment on the internal issues causing the problems.

However, technically minded customers have linked the NetBank 
disconnection to a rise in bank traffic earlier in the week and the 
inability to see transaction histories.

A spokesman for the consumer group Choice, Christopher Zinn, said: "It 
doesn't matter if you're an airline or bank - when things go wrong, you 
can't cover up any more.

"This is a connected world and everyone hears about it. It's far better 
they hear from you, the correct story of what's wrong, rather than the 
buzz on the internet."

Source: The Sydney Morning Herald


Bernard Robertson-Dunn
Canberra Australia
brd at iimetro.com.au

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