The core banking modernization project at the Commonwealth Bank Australia (CBA) costs AUD1.1billion (US$1.1 billion), according to its former CIO of International Finance, David Boyle.

The high price tag was largely a result of the complexities that CBA's IT infrastructure built up over the years to support the business, one project at a time. "They're all good projects that created revenues for the organization. But one can easily lose sight of the forest from the trees," Boyle said.

At the Finance Tech Forum 2011 held at the end of November in Hong Kong and Singapore, Boyle delivered a keynote titled "Is your IT architecture Cloud ready?" Using the following example, he illustrated how the complexities of IT infrastructure came into existence.

He said: "Let's say you're launching a new business product. You establish a project team, and look at the options. Option A might be: ‘Let's enhance some of our legacy systems that have most of the functionality.' Option B might be ‘Let's buy a new shiny system and add it into our environment.'"

Then the sponsor of the project meets with a software vendor, he is offered ‘a special reduced price' and decides to get a new shiny system for the once-only deal. Given the recent cost-cutting exercise in his company that caused some of the supporting areas under-staffed, he decides that it is cheaper to buy the new system than to leverage his IT staff to upgrade the legacy systems.

Although the enterprise architect advises the business to live with the existing systems, the project sponsor argues: "There are competitors out there who are already selling this product. Either the business gets to the market fast and gets revenue, or it will lose market share."