We publish another attack on the BoS estimates of IT related cost savings. How can the unproven BankWest system handle the scale and products of the new combined business? But much of it is getting very technical from a banking and IT view; issues around the algorithms used to generate account numbers and subdivisions beneath account numbers. I'm not sure whether we are expecting investors to really get to grips with this, or whether it is just to get the overall message across that this is bloody complicated and integration will not be done in five minutes.
Bank of Scotland immediately respond, although it looks a bit half-hearted. They pick up on one sentence in our announcement, saying they are pleased to see that NW has acknowledged the possibility of account numbers remaining unaffected after the acquisition under the BoS plans. We come straight back with another press release, headed,
"IS THAT IT FROM THE BANK OF SCOTLAND?"
We claim that they have not given detailed answers to our questions, that they do not understand large scale IT integration, and that replacing a core IT system will tie up resources which should be going in to customer-facing activities.
This all looks a bit esoteric to me, but to be fair I think we are at least getting the message across about the complexity of doing this, even if (as I suspect) there are only a few hundred people in the country who truly understand all the detail.
I pop along for a couple of hours to a Conference Board sponsored purchasing conference at the Royal Lancaster Hotel. At lunch, I sit next to one of the main speakers, Tim Laseter of Boston Consulting Group. He's written a book called "Balanced Sourcing", which is treading a very sensible middle way between the "partnership purchasing is great" faction and the "beat up your suppliers at every opportunity" camp. He argues that collaboration AND tough negotiation can run in parallel, which is spot on. It's one of those simple yet powerful concepts that makes you wonder why you didn't think of it yourself, write a book, become a high-powered consultant, make a fortune, drive a fast car, attract beautiful yet intelligent young models.....I could be jealous but Tim seems a very pleasant, friendly and normal chap, as well as being very bright.
I rush back mid-afternoon for a meeting with Bernard Horn and his other direct reports. Bernard keeps being pulled out to go to the Boardroom and discuss the next defence document. Achi Racov tells us while Bernard's gone how much he's making from his non-NW related investments in the IT and "e" worlds. NatWest has never worked out how to get the most out of Achi. Sometimes his ideas and input on NW IT issues are just ignored or get caught up in the internal politics. (Achi is not exactly your normal corporate executive, and he and Tim Jones don't see eye to eye, which doesn't help.)
In terms of his many entrepreneurial ideas, one or two which NW have backed have not quite worked out, then of course people get nervous and won't support others, which turn out to be beauties. I suspect we should have just set him up financially with NW taking a large stake in his business, and let him get on with it independently. I believe Achi and Bernard are now discussing that solution as a mutually acceptable way of giving both parties what they want.
Stephen Byers, the business minister, announces that the BoS bid will not be referred to the competition authorities, which is a marginally surprising decision, although the pundits were divided on the likely outcome. He apparently thinks there's quite enough competition around, which with the entry of the e-banks like Egg and companies like Tesco and Virgin into the financial services market is probably true. Bernard is surprised by this decision - our Directors thought there was a better than even chance it would be referred. Clearly, that removes one possible escape route for NatWest. It looks like we will have to rely on our own efforts.