Alltel, Softbank snag $170 mln computer deal with PKO BP
U.S.-based software company Alltel, together with its Polish strategic partner Softbank, have won a $170 million contract to install an integrated IT system in the country's largest retail bank, Powszechna Kasa Oszczednosci (PKO BP), the Business Journal has learned.
In addition to its part of the $170 million tender, Softbank is going to cash in another $100 million with a contract to support and further develop its ZORBA banking software, introduced to the market at the end of 1995. The PKO BP project is slated for completion by 2004.
"It will take longer than expected," said Krzysztof Misinski, project manager with PKO BP. "Originally, we thought about two to three years, but now we see the implementation will take five years."
It came as little surprise to anyone that Alltel and Softbank snagged the deal, beating out competitors Unisys and Andersen Consulting. Alltel and Softbank work closely together in Poland, and Softbank has worked with PKO BP since 1993.
At the same time, Alltel is already installing its IT system in the second largest Polish retail bank, Bank Pekao.
PKO BP already uses Softbank's ZORBA software in its branches to allow them to work together to cluster 168 regional offices. So far, the bank has spent about zl. 1 billion ($243 million) on ZORBA software, primarily to use with existing technical infrastructure.
Analysts said that PKO BP made the right move in deciding to install the new system while at the same time upgrading the old one. "I'd say it's a good sign," said Jean-Pierre Lambert, a banking analyst with London-based HSBC. "Given the size of the bank, it will take a while to introduce the new system. At the same time, they can't stop operations."
The downside, he said, is that the project will ultimately take double the work and double the investment. But PKO BP's Misinski said that in the future both Softbank and Alltel's systems should integrate easily. "We expect symbiosis between the existing system and the new one," he said.
The new, centralized system will allow the bank to offer services over the internet and enable customers to access their accounts from any one of PKO BP's 1,300 branches.
At the same time, the system will facilitate the sale of banking products, Misinski said, giving the tellers full, immediate information about a particular customer.
"We want to be No. 1 in sales," Misinski said. "We want to have all 40,000 staffers working in sales. And it will only be possible with a fully automated back office."
PKO BP also wants to tap the new system's capabilities to strengthen ties with licensed agents. In addition to its 1,300 branches, PKO BP also works with 25,000 agents whose activity is limited to taking deposits and cashing checks. The new system will also allow these agents to sell other banking products, Misinski said.
PKO BP called the tender for a centrally integrated information technology system last May. The system was needed for PKO to be able to track all accounts in its branches and switch funds through one fully integrated network. As many as 19 bidders took part in the tender.
Last July PKO short listed five companies, including Alltel with Softbank, U.S.-based Unisys and Andersen Consulting.
Winning the contract should further cement Softbank's position as the key provider of banking information systems in Poland, analysts said. "The deal with PKO BP is far more important for Softbank than for Alltel," said Dariusz Turkiewicz, IT sector analyst with CDM Pekao Securities.
