Take the fast track


22 November 2010


When it comes to addressing one’s IT infrastructure requirements, standing still is never an option. However, acknowledgment of the need for constant evolution is no guarantee of success. Matthew Wood from Lloyds Banking Group talks to Ellie Broughton about fast-track architecture, the need for vendors and project managers to engage with corporate objectives and the changing face of solution design.


Some IT projects have the same epic scale as any physical construction project, and weigh on their makers like several tons of stone and steel. But while a building's reputation develops over several decades, virtual architecture is judged much more quickly.
A report by the American IT researchers the Standish Group published in 2009 found that less than a third of IT projects were considered to have been successful and nearly a quarter failed, abandoned on delivery or cancelled in production.

Matthew Wood, business unit architect for Risk and Fraud at Lloyds Banking Group, wants businesses to take a fresh look at enterprise architecture. If a road link to an island is required, perhaps the business ought to think about a ferry system while the suspension bridge is being built. Not every project has to swell to the colossal scale of the solutions that went before; rather than planning something with a year-long implementation, chief information officers (CIOs) could create fast-track architecture (FTA) that can be delivered within months or even weeks.

Wood likens some IT projects to start-up companies: "If your start-up was doing something unproven, it would be high risk to spend tens of millions on it until you understand the market for it," he says. "A lower-risk approach would be to spend less, and get something going on a smaller scale. When you know you have a market for your service, then you go for it."

FTA has a lot in common with a pilot or proof-of-concept design. The main difference is that FTA projects could potentially run for years. FTA also differs from pilot designs because it can include several technologies, including cloud computing solutions. Just as a pilot is meant to be a cost-effective model of a working solution, so FTA tends to save money because it suggests lighter, simpler architecture.

"The pace of business has sped up over the years due to market forces such as globalisation," Wood says. "The businesses we serve have long since abandoned the ideal of artistic perfection in their day-to-day work."

As he explained earlier this year in an article for CIO, there are three key benefits to FTA: greater return on investment, greater trust in the IT department and reduced risk of failure.Its most important - and most attractive - strength is its costing. "The earlier a solution can be implemented, the faster the return on investment will start to be realised," Wood says. The money generated by the FTA project, whether cost savings or revenue, can be invested in the strategic solution."

The second key benefit of FTA is a better IT-business relationship: one with greater confidence, communication and trust. An FTA project leaves the CIO free to develop a strategic solution on the right timescales, instead of making compromises that may ultimately satisfy none of its objectives. Conceptual business requirements are hard to capture; having a working FTA solution against which to measure them will produce a more realistic snapshot of what the executives are thinking. A fast-track project will show the executives what their IT team is capable of, and creates a trust relationship that will enrich the development of strategic solutions. It is particularly popular with new executives keen to demonstrate quick wins from their leadership.

Projects of this nature also improve communication between business and IT. Delivering FTA shows that you have listened to what the customer was asking for, and dealt with the critical needs of the specification.

The third and ultimate benefit is the mitigated risk of failure. IT projects face a double risk: failure to deliver and failure to operate. FTA offers hope for both scenarios. "Traditional IT projects sometimes run on for a long time before the business opportunity is found to be unviable," Wood explains. "End users don't really know what they need until they can see what they're going to get. By then it's often too late to change."

Just like with any service industry, sometimes projects fail because the client doesn't manage to articulate their critical requirements before the product is realised.

As mentioned earlier, if a CIO manages to implement FTA quickly the project will deliver a return on investment faster. Early implementation also means that the client will be able to address unsuccessful projects much sooner and with much less financial risk. FTA also mitigates operational risk because it can stand in for end-user computing solutions. Key topics in recent years have been IT-business alignment and making sure that IT delivery responds more closely to business needs.

"The IT profession is changing," says Wood. "In the past, enterprise architects talked in concepts, such as 'city planning', rather than discussing investments that would address business requirements. We must always evolve and change, and meet the needs of the business."
Enterprise architecture already has great people who can integrate with
the business.

"We don't speak another language," Wood adds. "There are some really good IT people who can build trusted relationships with the business. What architecture also needs to address is not just what technology to use, but what operating models to adopt."
Wood highlights the idea of new hybrid roles that take tech professionals deeper into the business.
"Hybrid roles are key to business intelligence, analytics and data warehousing," he explains. "It is these topics that enterprise architecture should advise on."

In the past, enterprise architecture has focused on technology. But it should also turn its attention to the people, capability, operating models, processes and implementation that go with the technology to improve the results of IT departments. Architects are not the only party who must become more business-minded: vendors are encouraged to pay more attention to the needs of the client.
"The really successful vendors I see work closely with organisations. They understand what their key drivers are, and deliver to those areas," says Wood. "Those who tailor their pitch with a strong understanding of a client's requirements get a better response than companies who fail to empathise with them."

IT vendors also understand the corporate drive to implement the right solutions in the shortest possible time, something many enterprise architects ignore when they are designing strategic solutions.

"Some architects still insist on working to standards of purity and perfection," says Wood. He adds that the enterprise architect community must reassess its priorities if it wants to keep up with its business.

The future of solution design is sure to involve cloud computing and virtualisation. Both technologies have attracted a lot of curiosity from the IT community, although cloud computing has also been somewhat overhyped."There's no doubt that virtualisation is the way of the future," says Wood. "Cloud computing fits well with FTA because they're both about doing things quickly."

The use of cloud computing in FTA will reduce the costs and risk of failure in projects. The solution takes away the need to buy hardware, raise capital investment and arrange a large-scale implementation. "When you buy a platform-as-a-service or software-as-a-service, you just start an account, establish a commercial relationship and the service is ready to use," Wood says. "It is very quick and cost-effective."

Enterprise architects will continue to build the suspension bridges of the e-banking world, but in the meantime stakeholder engagement might be better served through the temporary solutions that provide a creative means to the end. FTA safeguards both the success of a project, and the reputation of the department that installs it.

2011 trends in retail banking technology

The retail banking industry must prepare for an onslaught of IT changes in 2011 due to regulatory reforms designed to protect the fragile economy from future crises, according to independent technology analysts Ovum. In a new report, 2011 Trends to Watch: Retail Banking Technology, Ovum claims that a barrage of changes to IT systems are on the horizon in 2011 and beyond, as authorities try to prevent any future banking crises from paralysing fragile economies emerging from a sustained period of weak or negative growth.

However Alex Kwiatkowski, Ovum analyst and author of the report, believes that the banking industry has not put aside the funds and resources needed to pay for the IT changes, even though they have been mooted since the sector's near-meltdown in 2008/09.
"As yet, retail banks have not put aside the funds and resources required to undertake this extensive programme of work on IT systems, which will swallow a large portion of technology budgets, Kwiatkowski says. "They will need to take a new approach to IT planning and investment in 2011 if they are to deal with the cost of the new legislation while remaining competitive, and against a backdrop of continued cost constraints due to the downturn. The successful banks will be those who can balance the needs of the regulator with the needs of the business and its customers."

According to Kwiatkowski, retail banks are unprepared as they have been waiting for the details of new regulations, such as the global-level Basel III accord, which will have a profound effect on key capital ratios and associated reporting requirements.

"While Basel III will be phased in from 2013 to 2019, it will be in 2011 and 2012 when the foundation blocks are laid, so there is no time to put off planning," he explains. "Regulatory guidelines are also being tightened and scrutiny increased at both a regional and national level, and inevitably there will be additional legislation to comply with aside from the demands of Basel III. For example, the Dodd-Frank Act in the US or reverse stress testing for banks within the European Union will drive mandatory technologytransformation projects if institutions wish to avoid the wrath of banking authorities."

The analyst believes that further pressures will be placed on retail banks' IT departments by the need to integrate systems gained through acquisitions. "Although the sector has largely stabilised, the purse strings will not be loosened in 2011," he says. "IT executives will be expected to do more with less, but without introducing additional levels of unmitigated risk". (Source: Ovum)