Outsourcing sharks circle Westpac bungle

Outsourcing sharks circle Westpac bungle

Pressure has intensified between outsourcing juggernauts EDS and Unisys, the two left chasing an outsourcing deal with Westpac Bank after its mortgage processing system allegedly crashed for three days earlier this month.

According to one ARN source, the contract is worth between $80-100 million, with the winner replacing an existing national processing centre based in Lockley, Adelaide. The tender went out in April this year.

David Lording, media liaison officer for Westpac in Sydney, confirmed the system did crash late Friday July 6, as ARN's source revealed, but vehemently denied the system was down for three days.

Sources within Westpac subsidiary Mortgage Processing Company, claim the centre - which employs 1200 personnel - was forced to stop work from 2pm Friday until Sunday July 8. Reports suggest the disaster recovery system also failed.

Lording denies these claims stating that to the best of his knowledge the system was back up on Saturday.

"I can confirm there was a technical glitch late Friday but there was recovery mechanisms in place and [Westpac] was able to minimise customer disruption," Lording revealed to ARN.

When pressed, Lording disclosed the system crash was understood to be due to a hardware fault. It is not known how much the downtime potentially cost the 24x7-processing centre.

News of the "glitch" heightens the urgency of the current bidding war between Unisys and Electronic Data Services (EDS) after Westpac announced in April a tender for a services company to replace the existing system and manage its IT requirements.

According to ARN's source, the bank was preparing at one point to fly "hundreds" of the Adelaide mortgage processing staff to the Sydney suburb of Concord where there is reportedly a "warm" or "mirror" site.

Even if they knew of the bungle both EDS and Unisys were keeping stum. Alan Smith, Unisys marketing director, said he knew nothing more of the tender's progression other than what was said in Westpac's initial statement to the market.

"They're still making their decision," said Smith. "But I don't think it will be months."

Smith would not comment on how this system crash would affect the tender process.

Neither would EDS counterpart Jane Elliott, a spokesperson for the services company, who claimed there was little she could divulge.

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