This is a really short blog on the TSB fiasco, not because I’m getting bored on the flight back from Chennai (been helping put out another fire…) but because when all said and done this is a simple classic in terms of what not to do when migrating IT systems.

What went wrong

Well not surprisingly, this was more than just a tech migration, the benefit case was outstanding:

  • £200m+ annual IT saving
  • A change in back office processing (savings)
  • A new customer support model (savings)
  • Attracting new customers with a digital retail banking 4.0 solution (Revenue Growth)
  • Enabling the bank to move firmly into the more lucrative corporate banking sector (Revenue Growth)

To make all of the above happen TSB needed to move away from the legacy IT system they shared with their previous owners Lloyds group.

The IT solution and operating model they were moving to and the method of migration were mature in the eyes of the Banks Spanish owners, as they had done this on previous occasions.
In fact this was part of their growth acquisition strategy, which is standard across the Fortune 1,000.

Why did it go so wrong?

Let’s break it down and keep it simple

  1. Institutional Over optimism – the Spanish owners had already been told that there were problems by the programme leadership team and the poor old UK CEO who ended up as the fall guy, was told JFDI. Quite simply we have done it before and it will be fine.
  2. Governance – as eluded to above, the risk was known but there was a break down in governance, any IT consultancy worth their salt would have walked away from the programme before the go live. It must have been absolute hell for the programme team knowing that they were being ignored and knowing the risk to customers and colleagues alike.
  3. Quality – The first two points are shocking enough but to then learn that the original go live 3 months earlier had been cancelled due to performance issues is staggering. On investigation IBM reported a lack of data migration testing and system performance testing especially the link back to the Spanish data centre, that’s a lot of data to lose if it all goes wrong!! You can never test enough.
  4. Operational Readiness (The Con Air moment) – I simply don’t understand this bit, so you know your programme is on fire and that your going to have to land the programme on fire and in bits right, smack bang on the Vegas strip. So surely you would try and invest in as much operational readiness across your branch network and call centre’s as possible right? You’ve guessed it they didn’t! Instead they simply swamped the staff they had, and this went on for weeks with staff no doubt taking the brunt of the carnage.

What was the impact of this?

Aside from undoubtedly impacting staff morale, the numbers speak for themselves:

  • 5.4 million customers impacted
  • A cost of £175m (still rising)
  • A loss of 24,000 customers (still rising)
  • Incalculable loss of reputation

And a feeding frenzy for the media……. It’s those nasty bankers yet again…

What a tragedy and like so many transformation programmes this could have been easily avoided but for the thirst of chasing the benefits case.

How would One Eighty Advisory have mitigated the chaos?

Our Turnaround Assessment would have rapidly identified the operational risk and helped deal with the over optimism. Our jump-start service could have helped get the programme back on track and  focused on a lower risk sustainable migration strategy.

We would have focused the leadership team on the 15 key themes that ensure successful business transformation governance, and how to avoid institutional optimism.

Organisational Governance: We would have focused the leadership team on their obligations to the FSA. If engaged and ignored we would enact our duty of care clause, we are an ethical consultancy and we would have rang the alarm bell if no responsible adult with-in the UK leadership team had been willing to do so.

Operational Readiness: Why oh why big bang, 180 would work to de-risk the go live (clusters) and put in place a robust operational readiness plan, with the customer at its centre. Would take longer and at a cost.

Quality:  Our Go-No-Go services, would have ensured a holistic quality plan was in place, linked to clear quality metrics and helping key stakeholders make informed decision.

The question is would TSB have listened???

If you would like more information on how One Eighty Advisory can help your Business Transformation Programme you can contact us here.

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