FINspeak

Google has recently entered the offshoring market. Well, kind of. Their product concept can be technically considered “offshore”, as in a few miles from the coast, but I am in no way talking about the opening of a captive center in Bangalore. Rather, Google has filed a patent for an offshore or “water-based data center” using a barge or a flat vessel equipped with containers filled with servers, storage systems, and other networking gear.

Google’s “water data center” creatively confronts a few critical issues associated with data centers. Building a data center is quite expensive and locating them properly is a challenge due to real estate costs and the inability to access to the required electrical power, high bandwidth connections, and water to cool the center.

You might ask, “Well, how does a boat, not connected to the electrical grid, packed with servers and networking hardware, solve the data center conundrum? I know where we can get water for cooling but I’m unsure how can you power the thing?”

Just look at the water around you.

Using a wave energy converter, the ocean waves, according to Google, will generate more than enough electricity to provide power to the onboard data center. Additionally, wind power could be utilized as well. So, not only will the data center be cost effective it will also be self sustaining, and, surely, the Greenest solution to date.

Although the data center is only a small component of an organization’s computing environment, a 2007 Gartner report estimated that data centers account for about 23% of worldwide IT-based CO2 emissions. When analyzing this data, standing out to me is the significant impact of focusing on just one, standalone component of IT, in this case the data center, as a means to reduce carbon emissions. By doing so alone, an organization has the potential to reduce IT based carbon emissions by one quarter—wow!

While Google’s “water-based data center” is merely a sketch filed in the US Patent Office, the potential of the concept to solve both the energy usage and cost problems of the current data center model is great. As more organizations become aware of the tremendous inefficiencies of the current data center model, the “water-based data center” will certainly emerge as a viable Green alternative.

To learn more about Google’s “water-based data center” check out this entry in Bits, New York Times technology blog.

Posted by Jitin Goyal at 09:00 PM | Permalink | Comments (2) | TrackBacks (0)

Bank of America à Merrill Lynch

BarclaysàLehman Brothers

JPMorganChaseàBear Stearns

Morgan Stanleyà?

Goldman Sachsà?

Welcome to merger mania.  Out of necessity the nation’s largest financial institutions are acquiring and being acquired.  This is not just a change in our financial system, this is a tectonic shift—a once in a lifetime event that will forever alter the banking landscape.

Merging isn’t as easy as “you have a strong balance sheet, I need a strong balance sheet, let’s get together”.  Departments need to be reorganized, redundancies eliminated, and synergies realized.  A complex affair indeed; it is no wonder that 70% of mergers fail to achieve their anticipated value.

Merging IT inevitably becomes one of the more difficult post-merger tasks.  The challenge for the acquiring CIO is to maximize synergies while minimizing customer disruption.  The ideal (idyllic?) end result is an IT system fully aligned and integrated with the business side of the bank. In short, there has never been a better opportunity for these organizations to demonstrate the value that true Business-IT alignment can bring, both in terms of operational efficiency and speed of response.

There are number of different approaches to take.  Some companies elect for the “let’s get to it” rapid integration.  This can often be a dangerous approach for banks to take, as customer-facing functionalities may experience down-time.  According to Mckinsey Quarterly, rapid integration typically drives away 8% of the customer base.  For a large bank with millions of customers, this is an unacceptable scenario. As a result, this approach is more suitable for smaller organizations (with more back-end operations) merging with larger organizations, rather than two large organizations with mission-critical customer-facing applications.

The flip-side of the speed coin is a slow integration.  This often entails running systems parallel to one another.  Though a slow approach eliminates any potential customer service problems, it also racks up high maintenance and support bills.  Redundancies are never friendly to the bottom line, and running numerous IT systems can be incredibly expensive.

Others find a middle ground and use a phased approach.  The first, or “keep the lights on”, phase integrates blatantly redundant applications, while running customer-oriented systems in parallel.  While this occurs, a team conducts a comparison of systems across the two organizations, choosing which are best suited for the newly merged organization. In the next phase, data is migrated to the application system being retained and the future roadmap for the consolidated system is determined based on the strengths/weaknesses noted in the systems in their stand-alone versions in the pre-merger days.

Any successful integration is generally predicated on strong leadership and planning.  All stakeholders need to be involved and a committee should be formed including representatives of each business unit and the IT department. Before any integration is undertaken a blueprint will need to be developed which targets desired synergies and weighs the costs of achieving these synergies. 

I’m sure much will be learned following this latest batch of mergers, and it should be interesting to see which approach each newly integrated institution elects to use. Whichever approach they choose to take will have its fair share of challenges both on the business and IT side, and only successful stakeholder management can help to overcome them.

CFO.com has an interesting write-up on post-merger IT integration.

The GRC issue of FINsights has a nice article discussing integration of compliance systems.  Check it out!

Posted by Jamuna Ravi at 08:29 PM | Permalink | Comments (3) | TrackBacks (0)

Hello readers!  I've put together a few entries discussing the credit crisis.  They are currently posted on the Think Flat blog.  Below are the links:

The Shotgun Wedding Planner on Wall Street!

Three Cheers for the Universal Bank!

Fannie Mae and Freddie Mac - Flattened by Credit Crunch?

Posted by Balaji Yellavalli at 07:46 PM | Permalink | Comments (0) | TrackBacks (0)

The “Energy Star” logo, often emblazoned on computers and monitors, has become a familiar sight for computer users since 1992 when the United States Environmental Protection Agency adopted standards to certify consumer products using the Energy Star logo.  Energy Star-worthy products are certifiable when energy consumption is reduced, on average, by 30 percent.  Reducing energy consumption has always been a priority for organizations, especially after the launch of Energy Star standards, but recent changes in utility costs have forced enterprises to more closely examine their utility usage with the prime point of focus being the pc workstation.  While all the hardware encompassing a workstation could be energy efficient—even to the point of Energy Star standards, such a set up does not mean the workstation maximizes its efficiency using the latest Green computing technologies.

With increased computing power and users utilizing only a small bit of their CPUs’ to browse the internet, edit documents, and compose emails, organizations have realized how a CPU can unnecessarily drive energy consumption.  Thus, organizations have begun to look toward thin client computing as a means to increase computing efficiency.  Thin client computing is a computing arrangement in which a thin client (computer) depends on a central server for processing power while using a virtualized desktop.  With thin client computing, the required hardware is a monitor and a terminal—both using a minimal amounts of electricity. 

While thin client computing is certainly not a new technology, the relative low costs of a standalone pc workstation whose substantial computing power can be obtained inexpensively have impeded the adoption of thin clients due to their minimal computing power. However, as utility costs increase and organization become increasingly aware of the carbon emissions associated with computing, the thin client, with low power requirements, will emerge as a lost cost, viable, and Green computing solution. 

I recently came across an article on MarketWatch.com describing the successful implementation of thin client computers at a California school district. With thin client computing, the school district was able to reduce its carbon footprint by 90% while increasing the ratio of students to computers from 9:1 to 2:1 at a cost of $70 per student.  So, as shown and like I mentioned in an early entry, Green IT has great potential to be cost driver for an organization.  I see a trend here!

The most compelling bit of information contained in the article, for me at least, was the incredible efficiency of thin clients in terms of energy usage.  The thin clients deployed at the school district mentioned in the article consume a mere 1 watt per user as compared with 115 watts for a stand-alone PC.  Extrapolate that figure across the enterprise and you can see how powerfully a thin client can impact an organization’s utility usage.

In an ideal world, a thin client, implemented across an enterprise, could drastically reduce utility usage and the carbon footprint of an organization.  However, to be realistic, the business requirements of a user must be analyzed before choosing a thin client as opposed to a standalone PC or thick client.  That way, computing resources can be properly allocated and an organization can be both efficient and Green. 

Now, if only the EPA would “Energy Star” certify companies.  I wonder if they could even find a sticker that big.

Posted by Jitin Goyal at 04:28 PM | Permalink | Comments (0) | TrackBacks (0)

I feel lonely when I visit my bank online. Agreed, there is much I can do when I am there--check my account, get rid of those pesky paper statements, and maybe even enable access on my cell phone. But, the experience offered is significantly impersonal.  Banks have transferred the formality of their businesses and their traditional aversion to risk into the online world. Call me paranoid, but, everywhere I look, I see appealing products but I’m not sure if I want junk fees and financial booby traps.

Compare this to how I spend time visiting online bookstores.  Again, with nothing specific in mind, I can look at the popular new releases, jump in and experience two pages of a book that I may want, and see what other people think of the book. Who is reading what? What are comparable books? What are my friends reading and what do they wish to buy? I can even compare prices among competing sellers. Being online, with a group of similar, like minded consumers makes me feel secure and I release the grip on my wallet where an impulsive one-click buy is always imminent.

The difference between the two scenarios, of course, is the ability to benefit from the ‘collective wisdom’ of online communities. In his book, ‘The Wisdom of Crowds’, James Surowiecki describes how, under the right circumstances, crowds will make very good decisions and offer excellent advice, often better than those of experts. “Wise crowds”, says Surowiecki, need a diversity of opinion, independent members, decentralization, and a good method for aggregating opinions.

If collective wisdom can work so well when we buy books online, why don’t we use the same wisdom to help us meet our financial goals? Why has financial advice and planning long been the preserve of individual, discreet and often expensive advisors? And, why is online shopping for financial products meeting one's individual financial goals almost non-existent?

So, I was intrigued when, last week, Geezeo.com introduced a financial marketplace allowing users to compare, review and rate banking products–very much in the style of book reviews on an online retailer like amazon.com. Geezeo’s marketplace is obviously evolving.  Not all products are on site, the taxonomy is still being figured out and the reviews are small in number. However, the trend is unmistakable. In a few years, I would think, very few people will buy a financial product without looking at peer reviews and ratings.

Consider expense management, as another example. It is very likely that your friendly neighborhood bank allows you to manage expenses online. You can categorize expenses, split them into pleasingly colored charts and even track them over time.  But, check out www.wesabe.com and www.mint.com. See the difference? At Wesabe there is a ‘Tips’ feature that funnels advice from other members on how to save money based on an analysis of your specific spending pattern.  Tips are supplemented with information from other sources of collective wisdom like Google reviews and yelp. And you can see how much members spend on average, what stores they use and what they think of those stores. You can share goals with other members and discuss their progress. And, if you are really a geek, you can even update expense transactions via Twitter. Apart from some very cool expense management tools (like Quicken and Intuit), Mint also maintains a database of the ‘best checking, savings and credit card offers available’ and recommends the ones that will save you the most money based on your spending pattern.

So how soon will the world of mainstream online banking allow access to online communities? What are the barriers and the risks?

 

Posted by Mahesh Makhija at 04:43 PM | Permalink | Comments (0) | TrackBacks (0)

The battery life on my laptop is terrible.  Not three hours, not two hours, not even an hour; no, my laptop can generally hum along for about 35 minutes before it runs out of juice.  The obvious side effect of my battery’s lack of stamina is my continual need to be tethered to an AC outlet.  Whether at the airport, the coffee shop, or at home, I’ve developed an eagle eye when it comes to spotting the elusive wall outlet.

This dependence on stationary electricity is one reason I was so intrigued by Intel’s latest demonstration of wireless power.  At the Intel Developer Forum event in San Francisco, a team led by Intel CTO Justin Rattner unveiled two coils of copper wires.  Attached to one was a light bulb.  When activated, one of the two magnetic coils could wirelessly transmit electricity to the other, powering the light bulb.  

Visions of a battery-less world are already dancing across my mind, but the technology still has a ways to go.  Currently, the Intel device’s energy transfer efficiency hovers around 75%, and the range is only two to three feet.  Others have had better luck; researchers from MIT unveiled similar technology last year, and claimed the ability to transfer energy at 90% efficiency within a six foot range. 

The current form of the technology is also a bit unwieldy. If you look at the picture in this Scientific American blog you can see that the coils are quite large, somewhere around two feet in diameter. 

Nit-picking aside, it is easy to imagine the potential of this technology.  Power “hot-spots” could be set up in your home and public places, powering electronic devices and computers.  From a pure convenience point-of-view, the appeal of this technology is extraordinary.  The days of hauling around that cell-phone charger could soon be long gone.

Wireless Power also has the ability to redefine how our workplaces are designed.  Free of the hindrance of power cords, printers, PCs, copy machines and any other office-device could be placed anywhere.  More efficient, worker-friendly layouts could be introduced, improving employee satisfaction and productivity.

As a society we seem to be headed in a wireless direction—wireless internet, wireless power.  “Freedom from wires” seems to be a latent consumer desire.  Over the next few years it will be interesting to see how much of the potential of technologies like wireless power is actually harnessed. 

Believe it or not, a similar technology was rumored to have existed about a hundred years ago.  Check out the Tesla entry at Wikipedia.

Posted by Mohit Joshi at 05:45 AM | Permalink | Comments (0) | TrackBacks (0)

There was a buzz last month amongst the media attending the Democratic National Convention (DNC) in Denver.  With thousands of excited delegates, politicians, and journalists converging in one area there was so much to talk about—Obama, Hillary, Biden… contactless payment-pins.  Okay, maybe contactless payments didn’t stir up quite the excitement of a nomination acceptance speech.  But underneath the undercurrents of political intrigue a prime example of payments innovation was on full display.

The technology unveiled was First Data’s Go-Tag Solution, a contactless payments device which was packaged as a commemorative DNC pin.  The pin (with $10 of purchasing power) was distributed to members of the media during the first two days of the convention.  Those who were lucky enough to receive the pin were able to make contactless payments at participating Pepsi concession stands. 

Contactless payments, though still somewhat new, have been around for awhile now.  In fact, there is a good chance that you already have a contactless debit or credit card.  The problem that proponents of contactless payments are encountering is the lack of excitement surrounding contactless cards or fobs.  Most consumers (myself included) feel there isn’t much difference between swiping and tapping.    

The appeal of First Data’s Go-Tag Solution isn’t its contactless capabilities, the appeal is its packaging—a sticker.  An account (phone, bank, you name it) connected sticker that you can put on the back of your mobile phone, eliminating the need to carry cash, card or wallet.  For those that have lost a wallet on a crazy night out, at the theme park, or anywhere else, this is a chance to leave the leather at home. 

First Data isn’t the first to enter the alternative-contactless market.  Earlier this year Garanti Bank in Turkey was recognized for its implementation of On Track Innovation’s smart sticker.  Other players in the United States and Europe continue to roll out similar products.

For these initiatives to succeed a consumer preference induced critical mass will need to be achieved, pushing retailers to install contactless payments devices.  As of May 2008, only 109,000 merchants worldwide had installed MasterCard’s PayPass device.  Obviously, this is a tiny percentage of the market.  It will be interesting to see how much effect (if any) these new innovations will have on merchant acceptance of contactless payments.  

Smstextnews.com has an interesting post about the Go-Tag.

The press release from First Data provides more information about its DNC debut.

Posted by Balaji Yellavalli at 05:42 AM | Permalink | Comments (1) | TrackBacks (0)

The world has changed a lot since 2001.  The stock market has crashed, rebounded, and dropped again.  The cell phone has become ubiquitous, and will likely become the center of technology innovation over the next decade.  In fact, consumer electronics as a whole have completely transformed in the last few years.  Consumers have found ways to better their lives through technology and businesses have responded with ever better and more desirable products.

It seems easy, technology as a driver to streamline and enrich.  Consumers seem to get it, yet still, businesses struggle with the proper application of technology, specifically information technology.  In the first sentence I benchmarked this post with the year 2001, and though it is somewhat arbitrary, I have a reason.  In 2001, CIO magazine published a wonderful article detailing IT transformation at FedEx.

At the time FedEx had recently restructured, and out of the restructuring came a new mantra:  use IT to power solutions for the customer.  The leadership of FedEx recognized that IT can be more than a utility to be turned on and off.  They recognized that IT can be transformed into a competitive advantage—or in the case of FedEx, THE competitive advantage.  Since 2001, FedEx’s stock price has nearly doubled and the company has established a reputation built on trust, efficiency and dependability.

The blueprint was laid out for other businesses to follow.  Some did, but today many still struggle to align IT with their business strategy.  A recent article in the Wall Street Journal detailed the challenges (and opportunities) that IT presents a company’s leadership.  The central theme of the article is to break the “glass wall” between IT and the rest of the organization.

Breaking this glass wall isn’t easy, and it requires a plan, and the dedication to stick to the plan.  Leadership, processes, and company culture all require adjustment, but IT transformation has become an imperative.  Those who fail to turn IT into a strength often find that their competitive advantage diminished, especially if they are in verticals which reach out to consumers constantly expecting new innovations in products/services.

The goal of this blog is to help provide information on IT trends, strategies and success stories. It also aims to help you to better align IT to business goals and to quantify that alignment. I hope to be able to provide insights on how to integrate and strengthen your IT department, turning a perceived burden into a powerful tool.   Feel free to leave comments, suggestions and your own stories of IT transformation successes and failures.  Your feedback is greatly appreciated.

For articles, white papers and commentary on the subject of Business Intelligence please check out my Business Intelligence Network channel.

 

Posted by Jamuna Ravi at 05:40 AM | Permalink | Comments (1) | TrackBacks (0)