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

HBOS has now achieved a single view of procurement information while maintaining the local reporting structures, and without the need for operational system standardization. The recently completed risk management phase has added further innovation to the groundbreaking project, by incorporating supplier credit ratings into the system.

After the wide success of the initial phase (May 2002), HBOS extended the reach of the SRM system across the organization, rolling out the project in four further phases, each increasing in scale and sophistication. In conjunction with KALIDO software, data extract, transfer and load tools from Ascential (now an IBM company) are deployed to handle initial data preparation, and Business Objects business intelligence software is used for reporting and analysis.

The HBOS SRM solution has consistently been flexible enough to incorporate both internal and external data feeds, handle dual versions of the same data to allow retrospective reporting, and maintain consistent reporting without disruption even throughout a major business reorganization. KALIDO is designed to accept change as a constant, enabling HBOS business users to rapidly adapt to the continuing integration needs of a large post-merger organization.

The phases following the initial launch are outlined below:

Adding e-procurement data - March 2003

In order to maximize the economies of scale made possible by the merger, and drive significant savings, HBOS needed to gain a clear view of all 10,000 line-items bought across the organization, including pens, paper and personalized goods such as headed paper and business cards which were ordered via the company's e-procurment system. E-procurement data was fed into a single KALIDO enterprise data warehouse, allowing HBOS to track overall usage and address previously unanswered questions on spending patterns of purchasers.

This had never been done before, and allowed the procurement team to better manage suppliers and support the finance department responsible for recharging and allocating costs. The availability of this accurate, consistent management information has also assisted in enabling the e-procurement system to subsequently be extended to subsidiaries which run entirely different ordering processes and are located away from the main centers of Halifax and Edinburgh. KALIDO allows the local units - Birmingham Midshires, Clerical Medical and Halifax Life and Pensions - to continue with their normal reporting methods, allowing them to remain agile. However the clear view across all the areas permits consistent reporting to enable the HBOS procurement team to better manage group-wide spending per supplier.

Embracing accounts payables change - January 2003 - June 2003

Business users had begun to use KALIDO to collect and aggregate accounts payable data from Birmingham Midshires, an HBOS subsisidiary whose data warehouse was located in Birmingham. Completely independently of the SRM initiative, HBOS had changed its account payable systems and moved over to Oracle since the project began. The inherent flexibility of the KALIDO solution allowed the purchasing team to rapidly replace all the original feeds with absolutely no interruption to the business users, who remained unaware of the switch throughout. Previously, such a major IT implementation would have resulted in serious disruption to day-to-day operations.