Nationwide Building Society is investing £300m over the next four years in an IT-enabled business transformation plan, with up to 80 per cent of the spending to cover technology projects.

The restructuring is mainly based on a long-term contract with SAP and a group of suppliers including IBM and Capgemini, which aims to streamline business processes and improve turnaround and processing of applications and transactions.

The system will replace an unstable and ageing platform that is nearing the end of its life in terms of support and the ability to perform as a blueprint for the building society’s IT agenda, Nationwide director of business systems transformation Darin Brumby told Computing.

“Our previous system was a known legacy infrastructure that was restrictive to Nationwide’s future growth plans,” he said.

“The new platform will enable us to respond to future changes in the industry, as well as provide faster product development and innovation processes that will translate to increased benefits to our customers.”

The business transformation plan does not have cost savings as its main goal, but the firm is forecasting “significantly lower” IT maintenance costs and increased efficiency once the SAP system is up and running.

The phased implementation of the software package will focus initially on core banking products such as current accounts, which will go live at the end of 2009. Subsequent phases supporting savings, mortgages and branch systems will follow.

Nationwide is the first financial services institution in the UK to adopt the latest service-oriented architecture version of SAP’s banking suite, which could pose some challenges, said Brumby.

“We are working with SAP to enforce a rigorous risk-management plan to ensure the software is fit for purpose,” he said.

“And working with our strategic partners will mean that we will be able to source the specific knowledge base that may not be readily available in the UK.”

The plan also covers other IT initiatives to improve customer satisfaction, which will be introduced alongside the main project.

Nationwide started its customer-focused revamp in 2004, which included branch refurbishment and improvement of web and telephone banking services.