Spring is here and with it so is convention season. This year in Japan, innovation is proving to be an even hotter buzzword than Abenomics.
Innovation was prominent at an Oracle convention event that took place in late April. IT experts from across industries and around the globe converged in Tokyo where they presented several instructive case studies on innovation in practice.
In kicking off the event and prior to a notable presentation by the CTO of a major financial institution, an Oracle senior director noted that reducing costs and investing strategically are eternal challenges in the systems sector. He pointed out that in recent years, the cloud has spread and emerged as a potentially powerful weapon to help solve in a balanced way these dual challenges of cost reduction and strategic investment, although there are as yet few examples of financial institutions using the cloud well. As such, the Oracle event was dedicated to introducing cases in which financial institutions have harnessed the cloud successfully in terms of IT strategies and private cloud strategies.
At this event, Celent discovered one ideal IT sourcing model initiative that epitomizes how a financial institution should migrate a global database to a private cloud.
Celent has broken down and organized the key points of this case study as follows.
1. Global financial institutions expect great things from the cloud when it comes to IT infrastructure in these four areas:
- On-demand services
- Prompt and flexible provisioning
- More quantifiable services
- Facilitating audits and security
2. The four principles that led to the achievement of these expectations:
- Cataloguing of services and self-service
- Standardization of applied technologies
- Unifying risk and security management
- Standardization of operation and maintenance
3. Seven key factors to success in this case:
- Program management
- Enterprise architecture (EA) approach and service definition
- Ecosystem-focused (life cycle management) approach
- Support model
- Inventory and data quality management
- IT demand management and communication with line of business
In addition to the scale of this case, which involved the migration of over 10,000 nodes and nearly 300 instances of provisioning profiles, the initiative also allowed the multinational company in question to achieve a follow-the-sun operation for capital markets worldwide. The firm has created an outstanding IT infrastructure in terms of mission critical robustness. However, more than anything, this case study approached the ideal in terms of IT sourcing models in that it enables self-implementation of database provisioning operations and management in addition to being able to provide vendor products and services. It is easy to imagine that it was this EA that proved the key to success. Of course, while this is a case study of advanced IT operational capacity at a top-tier financial institution, the agile nature of this initiative was clearly stimulating to the Japanese financial institutions that were in attendance.
Celent has published countless reports on innovative IT applications and initiatives including on how financial institutions can and are using the cloud to enhance their businesses. In particular, recent Celent research has focused on IT and innovation in the following three areas: digital and omnichannel, innovation and emerging technologies, and legacy and ecosystem migration. For many participants at the convention, this case study likely proffered more than a means to reduce costs, but also a chance to revisit their IT approaches to create a technology platform that fosters greater business operation value. This case is a shining example of ecosystem migration using emerging technology.
Both vendors that focus on providing solutions as well as vendors that focus on IT services are offering integrated solution services that vertically integrate hardware, software, system building, system operation and maintenance. In addition, financial institution infrastructures including many types of shared systems are available for use in their current service formats.Above and beyond the system building of SI vendors seen so far rooted in on-premise approaches, Celent expects the IT sourcing models of financial institutions to diversify at a rapid clip.
Fig: Changes in sourcing models
Celent defines innovation as introducing novel approaches that improve on what has come before and Celent calls individuals that orchestrate this innovation entrepreneurs. Celent also believes that technology offers a medium to change that can yield greater value for customers. We are in an era of intensifying competition and only the financial institutions that make technology their friend and leverage it intelligently will remain when the dust settles. And DBaaS is a prime example of this in practice.
 See Celent’s report, Cloud Computing in the Japanese Financial Services Industry, November 2011 http://www.celent.com/reports/cloud-computing-japanese-financial-services-industry
 See Celent’s report, Celent Model Bank 2014, Part 1: Digital and Omnichannel Banking, April 2014, among others http://www.celent.com/reports/celent-model-bank-2014-part-1-digital-and-omnichannel-banking