IBM bags bank's £34m ‘Rainbow’ contract
Big Blue to build core systems and security for savings bank.
Savings bank NS&I has appointed IBM as the first major supplier for its “Rainbow” transformation programme, which will see NS&I ditch its decade-old partnership with Atos.
The deal will see IBM deliver “digital integration and service operations” for the government-owned bank as part of the NS&I transformation programme, with a contract running from March 2022 until 2028, with a potential two-year extension. NS&I didn’t immediately confirm the value of the contract, but a tender issued last year for the same work placed the value at £39.5 million over six years.
Update 1 July 2022: NS&I has told The Stack the value of IBM's six-year contract is £34.2 million.
More contracts under the £2 billion Rainbow programme will follow, with a total of £700+ million in tenders currently in the works for this phase of the project.
See: Savings bank NS&I launches £700m+ in IT tenders
The bank’s annual report said funding for the NS&I transformation programme was ring-fenced, with £53.3 million allocated for resource spending in 2022-3, and £3.3 million for capital expenditure. The ring-fenced amount for future years is currently £178 million.
“I am delighted to achieve our first major milestone in our Rainbow programme and to welcome IBM as one of our new partners in delivering NS&I’s future operating model. IBM demonstrated a strong understanding of NS&I’s requirements and proposed a high quality solution, whilst also delivering for our customers and taxpayers. IBM have a long history of delivering in this field and we are looking forward to working with such a high quality partner,” said NS&I COO Matthew Smith in a press release.
The NS&I annual report said IBM would be working on “the technical and operational centre of NS&I’s future operating model” and will be designing the integration platform, its services and interfaces, and a central security monitoring service for the whole of NS&I’s tech stack. Other NS&I transformation programme contracts, covering Digital Experience and Digital Enablement; Customer Contact and Operations; and Core Banking, Payments and Reporting, should be signed by April 2023, according to the report.
Atos’s contract comes to an end in March 2024, and NS&I regards the shift from a single-supplier managed services model to a multi-vendor self-managed setup as a big deal.
In his foreword to the annual report, NS&I chief exec Ian Ackerley said the last two years of his half-decade at the helm have been the most challenging, not just due to Covid, but “because of the transformation of the business we are delivering through Rainbow – the biggest change to the operating model in over 20 years”.
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Discussing the NS&I transformation programme, the annual report said: “The new model requires NS&I to take responsibility for integrating the different suppliers, and we are strengthening our capacity for this. We are also reviewing ways of working and identifying opportunities to further streamline processes ahead of the new contracts. One of our goals is to enable better digital journeys for customers, enabling further self- service. This is crucial to increasing our operating efficiency as the business grows.”
The report also made much of NS&I’s commitment to “social value”, with requirements for suppliers to pay staff a Living Wage, reduce gender pay gaps, and detailed social value appraisals for each procurement package, including economic, environmental and social outcomes.
The NS&I transformation programme is also the only HM Treasury project included in the Government Major Projects Portfolio (GMPP), the report notes. According to the Office for National Statistics’ 2020-1 report on the GMPP there were 184 ongoing major projects, with a total lifetime cost of £542 billion, with 62 government transformation projects spending £125 billion – which puts the £2 billion Rainbow programme right on the average.
