Israel Discount Bank (TASE: DSCT) today announced the completion of the upgrade of its Ofek computer system. “Completion of this project enables the Discount group long-term use of an advanced computer system that the group will use for modern customer-oriented banking applications, while providing business and operational flexibility,” said Discount Bank CEO Giora Ofer. “Sooner or later, all the competing banks will have to replace their computer systems.”
The computer upgrade is expected to save the bank substantial amounts, although Ofer could not cite a figure. The bank said the system will enable it to classify customers according to their overall activity, and tailor products and services accordingly. For example, the bank will be able to build new financial products without the need to develop software, and in a short time-to-market, while including segmented marketing banners in mail to customers.
Discount Bank launched the Ofek project in 2001, after it was unable to convert its legacy software to IBM. The computer project was originally scheduled to be completed in late 2005, but numerous problems and failures caused a delay. The bank failed to meet deadlines and budgets at each stage of the project.
The Ofek’s projects original budget was $115 million, not including VAT. At the end of 2005, the bank estimated that the project would cost $178 million, and it now estimates the cost at $185 million - a $60 million overrun. The bank invested $152.6 million as of September.
Commenting on delays and cost overrun in the Ofek project, Ofer said, “We paid for a learning curve. In retrospect, we could have foregone some stages and saved money.”
Published by Globes [online], Israel business news - www.globes.co.il - on December 24, 2006
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