Financial services companies have had a tough ride over the past year, so anything that can be done to better take advantage of their information technology assets to streamline operations and increase the situational awareness and agility of the business is a good thing. That's where SOA and business process management (BPM) come in.
JPMorgan Chase, of course, is right at the epicenter of the financial storm that has been ravaging the industry, and the company's dominance and stability is due in no small part to its ability to smartly leverage SOA and BPM.
At ebizQ's recent Financial Services Live Panel, Ron Ambuter, CTO of the BPM Workstream Group at JPMorgan Chase, described how his company has been able to adapt and adopt technology and methodologies to help reduce costs, improve customer experiences, and maintain a competitive edge. Ronan Bradley, analyst with Lustratus Research and former CEO of PolarLake, led the discussion, and was joined by Keith Swenson, chief architect at Fujitsu Computer Systems, and Hub Vandervoort, CTO of Progress Software. (Archived recordings and transcript available here.)
Ambuter described how JPMorgan Chase was interested in the concept of reusability, which would help the organization "get better leverage out of the efforts that we were making to build and buy applications by reusing components instead of rebuilding and rebuying them over and over again."
With the troubles the industry has been having around subprime mortgages, writedowns, and tighter credit, it's likely
regulation and oversight will only increase, particularly in regards to risk management. Bradley questioned whether the prevalence of regulation holds back or encourages SOA adoption. Ambuter said regulatory mandates have accelerated his company's drive to SOA, noting that "the concept of SOA allows us to react probably quicker, and more expeditiously, more cost effectively."
The panel also discussed the challenges around extending managing services and infrastructure across multiple groups within organizations. Financial services organizations, of course, typically have multiple lines of business, from securities to brokerages to mortgages. Ambuster explained that organizational issues were his greatest challenge as well in implementing a cohesive SOA and BPM strategy at JPMorgan Chase. "We have rules and responsibilities that are compartmentalized by groups of folks, and we realize that as you go into this stuff, education and cross-pollination of information is critically important. It's not just the technology folks that need to understand this stuff, it's the risk folks, and it's the governance folks and it's the finance folks, and it's the business side folks."
Vandervoort agreed that "it's easy to get bogged down in trying to get alignment on a lot of different points across all the groups." He recommended three approaches to the problem, including "getting your transports aligned between business entities so that you can use eventing-oriented mechanisms to communicate across domains"; establishing SLA and security policies that ensure visibility; and establishing a common enterprise data model.
"You have to get your semantics aligned among the members," he said. "And that doesn't have to be a common vocabulary in its entirety, but certainly what we regard as the data in flight, those things that fly between domains and different working groups have to be highly normative."
Aligning SOA and BPM is also important. "While SOA is basically a technology trend, BPM is essentially a management trend," said Swenson. "A lot of people look at BPM and they get confused between the management trend and the technology trend. A lot of technology product companies have looked at BPM and looked only at the technology and come up with a kind of a programming language that they claim to solve the problem, which is great for the IT side of the house, but it leaves the business side out of this. As far as the adoption of BPM goes, one of the biggest barriers to adoption of the real business process is essentially the fear that the manager will lose control of the process."
Complex event processing is also a key initiative financial services companies need to undertake. As Vandervoort observes, "financial services is moving kind of in a logarithmic increase in velocity... things are ten times faster than they were a decade ago. When you go from three days order to settlement or trade to settlement to now under two hours trade to settlement, if I'm doing nightly reporting, I'm way out of alignment. Whereas ten years ago, that was three times faster than the speed of the pipeline. Today, you the ability to run awry in risk, terms, and exposure terms has been seen multiple times in the industry in recent years."
For companies seeking to increase agility and be more responsive to these highly competitive markets -- not just in financial services -- the combination of SOA and BPM can break down the constrictive silos that cut off essential data and processing resources.
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