by Hamidou Dia
Part of the Oracle Experiences in Enterprise Architecture article series
Published February 2012
Many organizations are considering or executing large-scale IT transformations. There are many reasons for pursuing these initiatives. In some cases the objective is to combine or integrate business units. In other cases managers wish to take advantage of a new technology paradigm, such as service-oriented architecture (SOA) or cloud computing.
Some of these projects are driven by industry-specific imperatives. For example, today's financial services companies are required to adhere to more stringent risk-management policies, motivated by ongoing upheavals in both domestic and global financial markets. Bank of America is a prime example.
Spencer and his team are helping the bank to mitigate risk and maximize efficiency through a company-wide transformation that entails new product strategy, detailed roadmaps, lifecycle management, product selection and rollout. Enterprise architecture plays a key role in this large-scale initiative. Like all U.S. banks, B of A must operate in an evolving regulatory environment. The company contends with legacy technology, mainly stemming from other financial services organizations that it has acquired. Some of these legacy issues stand in the way of profitability.
To improve efficiency and enforce greater standardization, Bank of America is implementing a private cloud based on Oracle Exadata and other Oracle technologies. The bank has a mature architecture process that serves as a great example of how to drive architecture transformation.
"We have a huge commitment to Private Cloud including virtualization, metering, and chargeback," said Spencer. "This emphasis has entailed a big investment in building private cloud architecture internally."
This example reveals another motivation for IT transformations: The technology landscape is always changing. Market leaders-both in financial services and other industries-maintain an edge by responding quickly. For example, just four years ago the first Cloud Expo conference was held. Today cloud computing is at the top of most CIO agendas. Many organizations have begun implementing private clouds and are taking advantage of public cloud services.
B of A has lots of disparate systems, which makes it difficult to identify the current state architecture. The bank also must deal with conflicting data sources, often resulting from mergers and acquisitions. Enterprise architects on Spencer's team are currently immersed in rationalizing these disparities and closing gaps in their IT capabilities.
Spencer advised enterprise architects at the Summit to proceed by thinking of these problems in terms of a series of tollgates. "When you have an idea, ask if it is worth investing and developing," he said. "Do the analysis to that point in time. How much do you need to know about your current state to decide if the idea has merit? Then develop more specific ideas and proposals as you 'earn passage' through the tollgate. How much will it cost, what specifically do we need to do, and how it will transform IT? Start with generalities and proceed towards more details."
Dell came to a similar conclusion. Dell has grown into not only a multinational hardware and infrastructure provider but also an IT services and solutions provider as well. Rapid growth led to regionally specific expansion from country to country. Dell ended up with unique manufacturing facilities, regional order management systems, and different operating processes and systems throughout the world.
In order to achieve its corporate objectives, Dell needed to rationalize its IT infrastructure. According to Rhonda Gass, Dell's Vice President of Strategy, Technology and Governance, who also spoke at the Oracle EA Summit, this transformative process involves consolidating multi-national systems to improve efficiency, reduce costs and enforce common standards. You can read more about Dell's transformative journey in the case study, IT Transformation at Dell.
Many other large companies find themselves in this same predicament. Rationalizing their information systems typically involves retiring old and low-value applications, modernizing high-value applications, eliminating redundancies, and standardizing on a common technology platform. Once the correct business architecture is in place, an organization can turn its attention to consolidation at the infrastructure, application, and information levels.
Such was the case for PHH Corporation, another innovative business that spoke at the Oracle EA Summit. PHH Corporation delivers world-class business solutions to its clients through two subsidiaries: PHH Mortgage and PHH Arval. Each of PHH Corporation's two business units has spent years innovating and expanding its information systems, resulting in separate and diverse IT infrastructures.
"We are going through transformation on multiple levels: business transformation, IT transformation, and shared services for our two major business units," explained Nathan Smith, Director of Enterprise Architecture and Chief Architect at PHH Corp. "It's not just about technology. It's about elevating individual projects, applications, and processes to an enterprise scale." You can read more about how PHH Corporation resolved these challenges in Laying a Foundation for Shared Services at PHH Corporation.
When it comes to building a business case for a private cloud or other large transformation, consider these five principles: