In Stage 1, the pressure to move from silos to standardized platforms is easy for the CIO to identify. The business complains about escalating IT costs and longer delivery schedules as IT wrestles with the ever-increasing complexity of all the pieces it must manage and integrate. But standardizing an enterprise's platform is not as simple as it may sound. The first step is deciding what exactly should be standardized.
"It makes sense to standardize at the network level, but it doesn't make sense for a specific business area," says State Street's Saul. For example, a common storage network and e-mail system both reduce cost and improve information sharing. But traders working with stocks may need different application functions than traders working with derivatives, even if many of the underlying functions, such as client management and reporting, are the same. "Today, our enterprise architecture exists in layers, starting from things like the network, hardware and operating systems, and continuing up through middleware and databases until it reaches the applications. The differences across businesses may be quite slight and restricted to the application layer. The idea is to standardize on functions wherever possible but not to force-fit them at the business level. That way designers can concentrate on business services that give us an advantage while reusing core components," Saul says.
The next issue is figuring out how to handle the change from the existing systems to the new standards. Not only must you actually transition your technology, you also must transition your users. And, Saul notes, you're bound to come across noncompliant technologies that are doing an important job and doing it well. State Street started an architectural committee early in its standardization effort to address these issues. When resolving standardization priorities, the committee started with the business objectives, ensuring that IT didn't inadvertently standardize away a business-critical technology. The committee approach planted the seeds for business-IT cooperation that would be needed in Stage 3 a few years later.
A more subtle issue in making the shift to Stage 3 is the human factor, says John Petrey, executive VP and CIO of TD Banknorth, a banking and insurance firm. Stage 1 businesses and their employees are focused (understandably) on solving their specific, individual problems. To problem-solvers, standardizing technologies may mean a loss of control and perhaps even a loss of optimal solutions. "It takes time for people to realize that to get the benefits everyone is after, you have to share more things," Petrey notes.
Realistically, this cultural shift takes place in spurts. "You don't wake up one day and it's a different culture," he says.
Companies also need a measure of resolve to succeed. Often, a crisis makes it clear why change is necessary. Other times, company leaders have the charisma or force of personality to effect the change. At TD Banknorth, Petrey implemented a ruthless approach to standardization for acquired companies. "We do rip and replace," he says. That way, he says, platform heterogeneity can't get a toehold in the organization.
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