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4 Significant Benefits of Transitioning to the Cloud (Westpac Case Study)

Benefits of Transitioning to the Cloud

Cloud computing has reached every industry and educating people has made the idea of cloud storage more feasible in the minds of the general public. So much so, that even some of the most security critical industries have dared to venture into the cloud. This case study uses Westpac, a banking corporation, as an example to outline some of the benefits of a cloud transition. Over the coming years, the bank plans to move 70 percent of the its processes to a hybrid Platform as a Service (PaaS) cloud environment, through the organisation's 'Agilus' initiative. The remaining 30 percent consisting of old applications do not require change and will therefore remain on-premises. Below is a list of some of the benefits that organisations and their customers may realise as a result of their transition to the cloud:

  1. Reduction in infrastructure costs

    On-site systems take up vast amounts of physical space. They also require consistent maintenance, and security by in-house staff. Such expenses add up to a large sum. Westpac's current digitisation program is a clear example of how savings begin to accrue before a digital transition is even completed. Since the launch of Westpac's project in 2014, the bank has migrated 30 of its applications to the cloud, successfully reducing the cost of its infrastructure by approximately 70 percent. Dave Curran, Westpac's CIO said, "...what used to cost me a million now costs me $300,000." This is a significant reduction of expenses for the organisation. Fifty additional projects are reportedly in migration process to the enterprise's hybrid PaaS, continuing on Westpac's trajectory of accrued savings.

  2. Standardisation in its processes

    Standardisation is a key aspect of any organisation's CS. It allows customers to have a specific set of expectations that are consistently fulfilled. Westpac aims to achieve this in several ways. Firstly, the bank's infrastructure will be consolidated in a way that ensures there is only one customer base throughout the entire organisation. According to Curran, "It's really, really important that if you know something about a customer, the whole organisation knows it. From the customer's point of view, they only want to tell us once."

    Another way this will be accomplished is through the implementation of the CIO's approach to cloud computing. Instead of digitising Westpac's current systems, he decided to exchange most of them with standard (off-the-shelf) software applications. By implementing one consistent standard for the organisation, customers can enjoy a unified collection of systems through separate experiences across a range of different brands (Westpac manages five other bank divisions nationally, including St. George and BT. This digitisation process covers them as well).

  3. Better connection to customers

    The cloud's ease of access strengthens the customer's connection with organisations. It gathers all data under one roof, simplifying previously complex processes. An example of this is Westpac's new customer service hub. Significantly, the main purpose behind Westpac's cloud transition is the achievement of customer satisfaction. While one expects good customer service when walking into a bank, user experience (UX) is just as important. The customer service hub aims to help the organisation do well in both aspects by centralising all its data, products and systems from all of its brands. This makes providing customers with a continuous omni-channel experience possible. They can seamlessly alternate between using the Westpac application, internet banking or in house inquiries. This also means that customers will benefit from easy access to more products. Not only does this benefit bankers, but it will also increase product revenue for the organisation. Westpac's CEO Brian Hartzer said, "We can't afford to sell the same products to the same customers in the same way. We have to get even closer to the customers and think about how we use technology and customer-centred design to create experiences customers really value and are willing to pay for."

    But the customer service hub is just one of many strategies that are being implemented to develop CX. The use of PaaS is an effective way to ensure a customisable experience for every account holder. Westpac takes pride in its ability to provide personalised service for its customers, which is something that its hybrid PaaS has made easier to achieve. By deploying a more flexible cloud environment, the organisation is provided with an "operating rhythm change," something unavailable in the other cloud computing services. The customisation of services is another advantage that customers can enjoy if their vendors decide to go digital.

  4. Increases overall efficiency

    Simply put, the cloud is fast, accessible, easy to use and more convenient. This makes it a more efficient organisational system. This is undoubtedly a strong motive for organisations looking to go digital. In his Westpac Strategy presentation for 2015, Hartzer said, "Digitisation is improving service and efficiency." Since a single infrastructure will contain more than one brand, consolidating infrastructure and technology across the organisation is important to ensure that redundant duplications are eliminated. Additionally, a cloud based environment means that processes can be accelerated, becoming more agile and reliable. CIO Curran told the Financial Review, "What took months to provision now takes days and most importantly helps bring customer solutions to market quicker. With increased automation and process improvement we will see significant cost savings and efficiency gains."