Commonwealth Bank of Australia (CBA) has completed its multi-year roll-out of SAP for Banking, according to its end of year financial results. The core banking modernisation project, which kicked off in 2008, is two years behind the original schedule and over double the budget, with the final bill totalling more than AU$1 billion.

Commonwealth Bank of Australia (CBA) has completed its deployment of the SAP for Banking platform, according to its end of year financial results. The project has spanned the best part of six years, with CBA having selected the system in mid-2008 to replace its long-standing legacy platform, CSC’s Hogan (IBS, May 2008, SAP gains two high-end deals).

Commonwealth Bank Australia

CBA branch

At the time, the implementation was allocated a provisional four year timeframe, although delays and spiralling costs have seen the total spend surpass the AU$1 billion mark, and an overrun of nearly two years. This is mainly attributed to the extension of the project to CBA’s subsidiaries, ASB Bank and Bankwest, as well as rising expenses on software development, and an initial lack of adequate personnel on the project (IBS, August 2011, CBA’s financial results reveal escalating costs of core transformation).

The bank’s CEO, Ian Narev, told investors that the 1500 CBA staff working on the project are ‘now back to doing other things’, and that ‘we are now shifting our focus on leveraging the system and innovating on the back of that core’. CBA, with over 1000 branches and 20 million customer accounts, posted an overall profit of AU$7.8 billion, whilst spending AU$200 million during this financial year on the SAP project, down from the AU$368 million it committed to the initiative in 2012.

CBA has undergone an extensive overhaul of all of its IT systems in the past decade, including several new multichannel systems, as well as deploying Wall Street Systems’ Wallstreet FX system in 2010 for front-to-back FX, money markets and risk management operations.

Whilst CBA has finally completed its major transformation, its neighbour, National Australia Bank (NAB), is still embroiled in its lengthy implementation of Oracle FSS’s Flexcube. This project also started in 2008, and has been hit by hikes in the cost and delays (IBS, November 2011, Delays hit core systems overhaul at NAB). Meanwhile, another Australian bank, Westpac, is stalling over its deployment of CSC’s Celeriti system, the vendor’s proposed upgrade route for Hogan customers. The bank underwent a major IT overhaul in 2010, but deferred the Celeriti implementation, with no signs of this yet resuming.

CBA’s cutover to the SAP platform follows signs of progress at two other major projects, the UK’s Nationwide (IBS, December 2012, Interview: Tony Prestedge, Nationwide Building Society) and Standard Bank in South Africa (IBS, July 2013, Standard Bank sets schedule for remainder of SAP roll-out).


by IBS Intelligence