1. CLOUD STRATEGY AND IMPLEMENTATION
Denis Curran
Head of Strategy & Innovation
National Australia Bank

2. AGENDA
 NAB’s Strategic Context
 NAB’s Cloud Drivers
 The Path We’ve Travelled
 Cloud Strategy
 Strategy Implementation
2

3. NAB’S STRATEGIC CONTEXT
And how we’re driving our Technology agenda
3

4. WHAT IS A BANK?
4

5. COMPETITIVE FACTORS DRIVING CHANGE
Legacy systems
 Ageing, intertwined
systems
 High cost to adapt
 Manual workarounds
 Unattractive to
workforce
Cost & risk
 Simplify E2E
processes
 Reduce rework
 High/continuous
availability
 Resilience
Innovation cycle
 Consumerisation
driving user experience
 Rapid rise (and fall) of
ICT enabled services
 Competitive threats
from new industry
models
ICT industry
development
 Rapidly falling costs of
new technologies
 Leverage massive data
 Mature service
providers
 Cloud
Enable customers and employees
Total Environment Transformation
 Help, guidance and
advice
 Collaborative
 Mobile, real-time,
24x7
 Secure
 Self-service
 Omni-channel
 Relationship
 Service/product
innovation
5

6. EXAMPLE – CUSTOMER CHANNEL PREFERENCE
0%
10%
20%
30%
40%
50%
60%
70%
Oct 08 Oct 09 Oct 10 Oct 11 Oct 12 Oct 13
% of total transactions by channel
Branch OTC Internet Banking Transactions Mobile Internet Banking Transactions ATM Telephone Banking
Trend line
6

7. EXAMPLE – CUSTOMER CHANNEL USAGE
k
2000k
4000k
6000k
8000k
10000k
12000k
14000k
16000k
18000k
20000k
Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13
Desktop vs. Mobile Logins
Internet Banking Logins Mobile Internet Banking Logins
7

8. OUR GOAL IS TO ENABLE A DIGITAL BUSINESS
Smart, secure products/services
E2E process, real-time, highly resilient
Supply chain integration
Insights on complete, accurate, timely data
Culture - innovation, agility, sustainability
Enable a digital business
Measures
Enable customers and employees
8

9. Creating sustainable enterprise outcomes
that help our colleagues win in their markets
Opening up new possibilities
for our customers and colleagues
Delivering excellent
services that our colleagues value
Standing behind what we do,
and taking accountability for our actions
OUR TECHNOLOGY ORGANISATION’S PURPOSE
Technology
enabling NAB to win
Ideas with impact
High performing and
customer focused
people
Smart, integrated, relia
ble service delivery
Technology’s strategic
intent
We need to excel at
9

10. TECHNOLOGY’S THOUGHT LEADERSHIP THEMES
Mobility ↔
Omni-channel
Consumer payments
Social &
knowledge
economy
Security & trust CloudBig data 10

11. NAB’S CLOUD DRIVERS
And why ODCA has been critical
11

12. NAB’S TECHNOLOGY DRIVERS FOR CLOUD LEADERSHIP
Business attractiveness
Security and trust
Technical and operational capability
12

13. NAB’S OBJECTIVES FOR CLOUD
Competitive
global
market
Cost effective
Choice
Innovation
Risk
Faster, lower cost
Known capability
Agility & innovation
Demand driven
Consistent user requirements promote efficient markets
13

14. WHY NAB PARTICIPATES IN ODCA
Real world industry experience
Build capability
Engagement of our people
Credibility
14

15. THE PATH WE’VE TRAVELLED
Could it have been different?
15

16. Industry context
Nascent
EVOLUTION
Technology Business users
Acquire
understanding ODCA
Opportunistic buyers
Emerging
Control
expansion Internal cloud
Viral growth
Maturing
Strategy
External cloud
Discipline
16

17. CLOUD STRATEGY
Formation and foundations
17

18. STRATEGY FORMATION
 Objectives:
• Articulate NAB’s approach to Cloud adoption
• Inform (and educate) stakeholders on the evolving Cloud-
scape
 Components:
• Regulatory Context
• Technology Operating Model
• Risk Appetite Statement
• (Cloud) Sourcing Principles
• Cloud Adoption Framework
• Governance Arrangements
• Practices and Tools
18

19. TARGET STATE
19
Based on ODCA materials
Target State
10% 90%
HYBRID
FEDERATED Foundation services
Risk Appetite; Readiness Assessment; Architecture & Design;
Implementation & Transition; Security; Service Management

20. REGULATORY & LEGAL CONTEXT
 Banking regulation
• Applies to “Material” activities for any Outsourcing
• Assumes there is a loss of control and therefore risks increase
• Requires:
• Policy setting and Board expectations
• Diligent selection approach
• Formal contract with defined clauses
• Regulator access
• Consultation or notification
• Monitoring and audit requirements
• Other impacting regulations
 Privacy Act
• Disclosure of personally identifiable information
• Mitigation
• Emerging mandatory disclosure of breaches 20

21. TECHNOLOGY OPERATING MODEL
21
Leadership
Capabilities
Engagement, Strategy,
Architecture, Innovation
Service
Planning, Optimisation &
Governance
Service & Relationship
Management
External Managed
Services
Internal Managed
Services
Security Services
Standardised Infrastructure
Commercial Platforms Bespoke Systems
Multi-Supplier Integration

22. RISK APPETITE STATEMENT
 Regulatory requirement
 Board endorsed
 Establishes the level of risk the organisation is
prepared to take to achieve benefits
 Set for outsourcing, of which Cloud is one element
 Cloud Risk Appetite considerations:
• Recognises (external) Cloud is an emerging capability
• Sets risk acceptance and control requirements
22

23. SOURCING PRINCIPLES
 Consistent with Outsourcing principles plus:
 Cloud decisions – good governance using ODCA to drive
efficient, consistent, risk balanced benefits based decisions
 Cloud service providers – approved suppliers complying with
minimum requirements
 Ownership and accountability – Technology Service Owner +
Relationship Manager if multiple services delivered
23

24. STRATEGY IMPLEMENTATION
Approaches, practices, and tools
24

25. CLOUD ADOPTION FRAMEWORK
Low Medium High
Information Classification
Regulatory/Materiality
Compliance
Low
Medium
High
BCP Rating
Service Criticality
Informs level of risk assessment, controls and governance
25

26. GOVERNANCE – PLAN
Outsourcing regulation
Supplier Council
Risk Appetite Statement
Outsourcing strategy
Board
Technical
Architecture Forum
Strategic
Architecture Forum
Cloud strategy
Proponents
26

27. GOVERNANCE – RUN
Operations
Relationship
Executive
• Strategy
• Relationship
• Opportunity
• Escalation
• Performance overview
• Risks
• Relationship
• Innovation
• Contract
• Escalation
• Performance detail
• Issues
• Priorities
• Improvement
• Administration
Supplier Council
27

28. ADAPTING PRACTICES TO EXPLOIT CLOUD
Service Planning and Management
Software Development Lifecycle
Infrastructure Management
Security and Trust
28

29. TOOLS


Segregation of duties
Orchestration
Data residency
Monitoring
Source code management
VPN
API
ScalingResilience
Verification
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30. SUMMARY/CALL TO ACTION
 Customer, employee, legacy and industry drivers
creating conditions to pursue Cloud services
 Engaging with industry, via ODCA, is compelling
 Cloud strategy is a necessary precursor to systemic
adoption
 The strategy is multi-faceted, requiring organisational
change, and investment in tools and practices to be
sustainable
 ODCA Usage Models provide insight and materials we
are leveraging in strategy and implementation
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31. © 2013 Open Data Center Alliance, Inc. ALL RIGHTS RESERVED.