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Customer Snapshot

Real-Time Value from Australia’s Largest and Safest Bank

Top 10

Recently named one of
the world's top banks

 

 

With Australia’s largest banking customer base (13 million customers), Commonwealth Bank of Australia leads in both household deposits and home lending. To become an even greater customer-centric bank, Commonwealth is transforming their transactional banking system and supply chain management processes with solutions from SAP.

 

Company

Commonwealth Bank of Australia (CBA)

Headquarters

Sydney, Australia

Revenue

AU$700 billion (Assets)

Number of Employees

52,000

Implementation Partners

Accenture, SAP Consulting

Line of Business

Service, Sales, Finance, Procurement, Information Technology

Industry

Banking

Featured Products

Ariba Network, Ariba Supplier Management

History

Serving customers for over 100 years

 

  • 1912The Commonwealth Bank opened for business. Savings bank facilities were offered from a solitary branch in Melbourne and 489 agencies located in post offices throughout Victoria.
  • 1930Commonwealth Bank enlarged considerably following amalgamations with the State Bank of Western Australia (1931) and State Bank of New South Wales (1931).
  • 1960The Commonwealth Banking Corporation was formed when the Australian government separates trading/savings bank activities from central banking, which was assumed by the newly formed Reserve Bank of Australia.
  • 1974Operations expanded into the fields of home insurance and travel (1974) and the finance company, Commonwealth Bank Finance Corporation Ltd (CBFC), was formed.
  • 1988Entered the managed investment and life insurance arena with the establishment of wholly owned subsidiaries Commonwealth Life Ltd and Commonwealth Management Services Ltd.
  • 1990 Institutional Banking was established and combines the Commonwealth Bank’s various ‘wholesale’ activities under one unit.
  • 1994Customer Relationship Model (CRM) was introduced into branches, featuring uniform branch interior design and new ways of interacting with customers.
  • 1995The Commonwealth Bank’s internet site was launched, and Commonwealth Securities Limited (CommSec), a new stockbroking company, was established.
  • 1997NetBank is launched and was a total online service, offering 24-hour Internet transaction banking services.
  • 2002International Financial Services was established to unite numerous offshore operations within one division and to leverage existing expertise into target global markets.
  • 2007The Group’s first merger in Asia was completed with the acquisition of the Bank Arta Niaga Kencana (Bank ANK).
  • 2010Opening of branches in Shanghai, China, and Mumbai, India.
  • 2012The Core Banking Modernization (CBM) program begins, modernizing core banking systems and processes.

The Challenge

Addressing core processing limitations

With transactions processed on large-capacity mainframe applications – some unchanged since the 1960s – and clusters of heterogeneous supporting systems added over time, the bank’s technology and operations had become unmanageably complex. That’s why CBA sought a flexible, scalable, and efficient IT platform to drive simplicity, customer-centricity, and profitable growth.

 

Furthermore, the bank’s increasing global expansion was challenging its ability to effectively manage relationships with suppliers, customers, and financial partners. Procurement faced several challenges, including indirect sourcing, disparate guidelines, limited reporting, and high numbers of low-value suppliers.

Enter SAP

Many reasons point to SAP

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Why Ariba was the right choice for CommBank

On the procurement side, the software CommBank had been using was reaching its end of life, prompting the bank to investigate new solutions. Because of CommBank’s global growth and need for international suppliers, the bank selected Ariba On-Demand and the Ariba Supplier Network for its global sourcing and its ability to extend the bank’s processes to vendors and suppliers with cloud-based efficiency.

The SAP Experience

The best of all worlds

A team from SAP Consulting and Accenture implemented a combination of the best of CommBank’s, SAP’s, and Accenture’s methodologies. The project specified each of the deliverable types to be produced by each work stream for each phase of the program. And SAP Max Attention was involved from the start for scalability, performance, and reliability.

 

The Ariba solution and its customizable modules represented multiple opportunities for improvement. Besides giving CommBank the ability to manage purchasing outside its own firewall, the bank now has the ability to take advantage of real-time pricing. With help from SAP, CommBank is learning how to drill down into the new data it’s gathering to gain even greater business insight.


Running Better

The side-by-side test

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More user-friendly and intuitive than the competition

Benefits

Quicker to market. Better results.

The SAP Banking Services implementation has helped CommBank bring new products to market 75% faster. The streamlined system has helped reduce customer queries by 15%, and branch network processing errors by 30%. Accordingly, customer satisfaction since the implementation has increased by 10%. CommBank has also gained the flexibility to test-launch new banking products on a limited scale, modify features based on consumer responses, and then perform a complete launch of a customer-tested offer in just weeks.

 

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Getting a much clearer picture

On the procurement side, the Ariba implementation has given CommBank greater visibility into their supply chain. Previously, fewer than 10% of the bank’s supplier contracts were centrally stored. Today, all contracts are centrally stored for the top 90% of suppliers. CommBank has also rationalized their supplier base, reducing the number of suppliers by 70%.

 

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Exceeding our goal

In the first three years of the Ariba implementation, CommBank has saved $205 million of a 5-year, $250 million goal.

 

Today

First-mover advantage

CommBank has fundamentally changed their customer interactions. The SAP Banking Services platform enables immediate account opening and servicing fulfillment, with greater transparency on transactions as they occur. A 360-degree view of customers increases efficiency, and enhanced customer analytics are driving more focused marketing campaigns.

 

“This program is all about the customer…. about positioning ourselves to deliver to the customer what he/she wants, anytime, anywhere.”

Procurement has changed fundamentally, too. A key driver of CommBank’s implementation was ease of use. Easy integration enabled rapid internal adoption of the Ariba solutions and it extends the bank’s systems to suppliers, allowing CommBank to share processes and collaborate with trading partners more easily. Additionally, executive dashboards and infographics supplied by the Ariba solution provide high-level information about performance and compliance. Drill-down capabilities enable vendor-level spending insight.

 

Journey Ahead

The next steps

While CommBank’s Core Banking Platform services are now available to Australian customers, rollout to offshore regions and Asia Pacific is next. The bank also plans to deliver business and retail lending via SAP Loans Management, taking product innovation to the next level with bundling, customer-centric pricing, sweeping and pooling facilities.

 

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We’ve got more work to do…

With Ariba solutions, CommBank plans to continue refining procurement by integrating savings estimates into budget forecasts and by leveraging their increased buying power. The procurement department is also continuing to build bridges that connect it to the business units, further integrating procurement as a strategic business function.

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