Driving eTransformation Australia and New Zealand Banking Group Limited David Boyles Chief Operations Officer

Page 2 Todays Agenda ANZs eTransformation Strategy Laying the foundations for successful eTransformation –Focus on People, Customers, Process & Infrastructure –Examples: Infrastructure Rationalisation –Examples: Leadership in web-based technologies ANZs approach to internal eTransformation The PeopleSoft Partnership Key Learnings

Page 3 Continuous Productivity Improvement - ANZs way of life Rationalise & standardise our infrastructure Implement web- based technologies across a vast range of platforms & processes eTransform our internal processes Cost leadership CTI % Provides the opportunity to: Target Mid 40s

Page 4 ANZs Strategy Specialise eTransform Perform Grow Breakout Building a portfolio of stand-out businesses with distinctive business leadership and a sustainable top 3 position that work as one ANZ Embracing technology to drive radical change, boost productivity, accelerate innovation and dramatically improve service and value Ensuring best in class performance for shareholders, customers, staff and the community Demonstrating strong growth momentum in core businesses and positioning ourselves in attractive new high growth categories Being bold and different, a high performance culture with a human face, technological leadership and a strong domestic and regional strategic position

Page 5 Laying the Foundations for Successful eTransformation Starting in 1998 we made some key commitments involving People, Customers, Process and Infrastructure People: Alignment, collaboration & team work. Environment where individuals can excel. Retain critical individuals. Customers: Customer feedback processes & accountability, meaningful service levels, align with BU, implement TQM. Process: Consistent project management standards, strict criteria for new investment in applications, rationalise & standardise operational processes. Infrastructure: reduce costs, rationalise, consolidate & automate networks & platforms. Position for the future. Reposition backend product functions behind integrated service frontend.

Page 6 We rationalised and standardised our infrastructure 1998: 6 major systems CBS Hogan MVS UNIX W2K : 8+ major platforms Core Systems Platforms Provide all staff with best tools possible -Low cost of ownership through standard solution OS/2 Win 3.1 Win NT DOS Servers & Desktops 1998 Multiple data networks 2000 Internet Protocol (IP) network -Single IP Network provides universal connectivity -Greater ability to leverage new technologies -Lower hardware, software licence fees & support costs -Simpler systems & platforms reduce cycle times

Page 7 Leadership in Web-based Technologies PAYplus – Global Payments Platform Standardised processes for enhanced product development Reduced operating and technology costs Improved operational risk management VIPS - Visual Image Processing System Improved customer service through faster retrieval Enables eTransformation to customer self service via Internet Eliminates geographic dependency on paper allowing stream lining of processes Lowest unit costs from one pass data & image capture

Page 8 Web-based Technologies for a Range of Platforms Tandem Replacement Project New lower cost base platform for EFTPOS & ATM switching Achieving high availability & high transaction performance Microsoft Windows 2000 Platform for Branches Server & work stations deployed to 1000 branches across Australia & New Zealand to support new sales & service application Deployment also provided all branch staff with enterprise standard & intranet Proof of Concept of MS SQL 2000 for new data warehouse

Page 9 Positioning for Internal eTransformation Online self service is not new to our people eTransformation from the top down - Board and CEO eTransformed using Directors online Introduced a common intranet (Max) Key people functions moved online - business process maps, Manage My Leave, Manage My Pay offer taken up by 13,000 of our people

Page 10 Our Approach to the eTransformation of Internal Processes Set Clear Objective To move to online, standardised, real time processing, with Internet capability and wherever possible, self service environments. Prioritise Strategic Opportunities Identify and reengineer key business processes

Page 11 PeopleSoft One area identified early on was the need for a common, standardised administration system or ERP – we chose PeopleSoft PeopleSoft met all our mandatory selection criteria HR functionality was tailored to Australian regulatory environment General ledger structure is a good fit to our operations Technology fits well with our architectural standards Relationships were effective and at the appropriate level

Page 12 Building on Microsoft Windows to Deploy PeopleSoft 8 In the midst of deploying PeopleSoft 8 on MS Windows 2000 and MS SQL 2000 MS Windows 2000 is our standard desktop operating environment MS Windows 2000 is also our standard for application servers running MS Windows 2000 has the lowest projected Total Cost of Ownership in comparison to other options we examined ANZs PeopleSoft implementation is one of the largest on this platform in the world

Page 13 Scope of our PeopleSoft Implementation Vanilla implementation Processes changed to fit the software Focus on people impact – change management & training Major modules: - Procurement - Human Resources / Payroll - Fixed Assets - Accounts Payable -Finance (General Ledger) Will cover 22,000 staff in Australia & New Zealand in 5 releases over 12 months – 5 th release in September 2002 Pushing the time / cost boundaries

Page 14 Organisational Impact Changing the way we work, rather than the core system = low customisation Degree of package customisation Low Customisation + Major change to processes and jobs = significant business change Degree of package customisation High stakeholder impact zone Low stakeholder impact zone LowHigh Change to ANZs existing processes and job structure

Page 15 Internal eTransformation Benefits People Empowerment and satisfaction Transformation of culture – real time high velocity execution, delivery of web-based information anytime, anywhere, any place, straight-through automation Productivity Faster, easier and more cost effective ways of working Easier capture and use of business information Consistent business platform across ANZ Reduction in operational risk Costs Reduction in HR, finance administration and procurement spend & greater control of fixed assets

Page 16 Internal eTransformation Key Learnings Need strong sponsorship/leadership from the CEO down Strategic & architectural framework established early Project leaders must make key decisions – with broad impacts not always time to consult Full resource commitment – right quantity, right skills Vanilla discipline: vigorous scope control at all levels Hard decisions taken up front –in the PeopleSoft implementation: - restructure of chart of accounts for the general ledger -Significant reduction of vendor base from more than 18,000 to approximately 5,000 Be ruthless on inefficiencies – take the opportunity to re-engineer your processes