HBOS plc Improves Supplier Risk Management with Kalido-Based System; Latest Phase of One of the Financial Sector's Largest and Most Successful Supplier Relationship Management Systems Helps Safeguard Bank's Interests

Business Wire, June 20, 2005

BURLINGTON, Mass. & LONDON -- Kalido, the leading adaptive enterprise data warehouse provider, announced that HBOS plc, the UK's largest mortgage and savings provider, has completed a major supplier risk management phase of its supplier relationship management (SRM) implementation. The cutting-edge initiative gives early warning indications of key suppliers at risk so that proactive business decisions can be taken accordingly to protect the group's interests.

All previous stages of the SRM project had involved the aggregation of data from HBOS operational systems, using KALIDO software to build an enterprise data warehouse with master data management functionality, Ascential data transformation tools and Business Objects reporting tools. However, in order to give an even more complete picture of supplier relationships, the procurement team extended the system to include external data feeds. Risk management specialists Dunn & Bradstreet provide HBOS with due diligence insight into its 20,000 or so suppliers, and now supply a comprehensive data file every quarter detailing risk information.

The Business Objects reporting tools in the HBOS SRM system send a file to Dunn & Bradstreet which is returned populated with supplier ratings. The KALIDO enterprise data warehouse consolidates the risk data with existing supplier information in the HBOS SRM system, enabling the team to determine the risk associated with suppliers.

The supplier risk management phase is the latest addition to the HBOS SRM system launched in 2002 to help achieve the major projected cost savings from the merger of Halifax and Bank of Scotland. The award-winning HBOS SRM system provides purchasing and supplier information from across the HBOS subsidiaries, reaching right back to 2001, for analysis by the HBOS Procurement team.

Subsequent phases since the launch of the HBOS SRM include the addition of e-procurement data to obtain for the first time a clear view of all 10,000 line items bought across the entire organization, with detailed spending and usage patterns. The next phase involved the change of the accounts payable system to Oracle with no business disruption as the SRM system was also being extended to include information from HBOS subsidiary Birmingham Midshires. This was followed by extending the reach of the HBOS SRM system to two further subsidiaries, Halifax Life and Pensions, and Clerical Medical, again with no disruption.

The information continuously provided throughout all phases since the inception of the SRM system has allowed HBOS to nimbly drive efficiencies, assist purchasing compliance and better manage supplier relationships across a complex organizational structure. All of this has been achieved in a fraction of the time it would have taken to build the SRM system using traditional methods, which unlike KALIDO software, would have required extensive and costly re-development to reflect the business changes.

Sharon Reason, procurement specialist - systems, HBOS plc, will detail the benefits of the overall HBOS SRM project in a web seminar hosted by Kalido and its strategic partner Business Objects on June 22, 2005 at 11:30 AM EST / 4:30 PM BST. Registration details are on: http://www.kalido.com/newsandevents/event.asp?event_ID=163.

Sharon Reason said: "The SRM project continues to empower our procurement decision makers, and has been invaluable in delivering the cost savings we required. Our business users needed access to superior quality management information across the group, regardless of any changes in the underlying IT infrastructure or organizational change. KALIDO has tackled everything we've thrown at it - its flexibility in reacting to business change has been extremely impressive. SRM has quite a reputation within HBOS Procurement, and we have many requests lined up for other data to be put into the system."

"The HBOS implementation has seen enterprise data warehousing come into its own," said Andy Hayler, founder and chief strategist, Kalido. "We thrive on projects of this scale. Our solutions are built on the premise that large organizations have to manage a wide variety of data from completely disparate systems throughout ongoing business change. Through the agility of our unique software KALIDO, we've been able to deliver significant tangible benefits to HBOS."

Background information

The HBOS SRM project, originally implemented by Acuma, the UK's leading provider of information management solutions, has continued to evolve against a back-drop of continual reorganization of the HBOS group structure and IT systems which support it. At the heart of the solution is KALIDO, enterprise data warehousing software from Kalido, which has enabled the procurement team to seamlessly integrate a diverse range of data from disparate IT systems of subsidiaries brought into the organization since Halifax and Bank of Scotland merged. KALIDO also enables the team to manage procurement master data, such as common descriptions about commodities and categories.