Programming Management



Programming Management

Windemere Trust Company: Rebuilding the MIS Infrastructure

Author: Thomas J. W. Baxter

Course: POS566

Course Title: Programming Management

Course Dates: 10/12/00-11/22/00

Table of Contents

Table of Contents 2

EXECUTIVE SUMMARY 3

BACKGROUND ON THE COMPANIES 4

SAVINGS DIVISION 4

TRUST SERVICES AND MUTUAL FUNDS 4

EQUIPMENT FINANCING GROUP 4

REAL ESTATE FINANCING GROUP 4

TREASURY/INVESTMENT DIVISION 4

INFORMATION SYSTEMS GROUP 5

BUDGET 5

INTERNAL COMMUNICATIONS 5

HARDWARE ISSUES 5

SOFTWARE ISSUES 6

DOCUMENTATION 6

DESIGNS THAT DO NOT PROMOTE THE BUSINESS NEEDS 6

RESULTS AND DISCUSSION 7

STAFF AND BUDGET 7

ARCHITECTURE 7

RAPID APPLICATIONS DEVELOPMENT 8

BIBLIOGRAPHY 8

EXECUTIVE SUMMARY

Case Study 5, The Windemere Trust Company, is about an organization that decided to reinvent their IT staff and Infrastructure to save their future. It was the sixth largest trust company in Canada. In 1988, it had assets of $3.6 billion and a net profit of $24.4 million. The firm was broken up into five distinct business groups: the Savings Division, Trust Service and Mutual Funds, the Equipment Financing Division, the Real Estate Financing Division, and Treasury and Investment.

Each division was truly their own entity, except for a semi-centralized IT group of about 80 people. This group made up 10% of the entire size of the company. I say semi-centralized because many of the application developers reported directly to the business units, instead of the IT management structure. The only common thread was that they worked on the same computer systems. They had a “Dotted Line relationship to IS”. (Kemerer, 672)

There were many problems with the focus of the business groups. They had not changed their attitudes, concepts or IT infrastructure to keep up with the times. There was a mismatch of hardware, operating systems and development languages. Some business units even used parts of different systems to accomplish their jobs. The system was not even integrated within the same business unit.

Frank Scannell, the company’s new CEO, had been given the authority to pursue a dramatic new direction. He wanted to revamp the entire IT structure. One of the first items that he accomplished was to hire a new Senior Vice President of Information Systems, Alan Bartt.

Bartt immediately recognized issues with the business units as well as his own IT group. He needed to find a way to gear his group to help fix the issues with the rest of the company. He also felt that he could do this by cutting his budget in half to $5 million annually and reduce his 80 person staff down to 20. Bartt knew that it was better to have 20 super people at $100,000 a year that it was to have 80 low energy people at $50,000. He also knew that he had to get all the applications on the same type of hardware and written in the same language.

He felt that through the use of great people, equipment, and software design tools, like Case tools developed by Synon Company, he could complete his vision in 18 months.

Background on the Companies

Savings Division

This division is the largest division in Windemere. It has over 300 employees, in 36 branches, in 24 cities in Canada. This division primarily did business with older people using term deposits. They were not very competitive and did not go after the banking and trust company market, which was available to them. Their marketing was very poor and they did not cater to the modern computer age customer. This division will probably fail in the near future if they do not take a hard look at what their customer base is asking for.

Trust Services and Mutual Funds

This is a fairly small division made up of only 39 employees. They deal in primarily four functional areas: mutual fund loans and management, corporate and personal trust services and personal tax services. Customers were acquired through acquisitions of other trust businesses. They too, were not looking to where their next customer’s were coming from.

Equipment Financing Group

This group comprises 20% of Windemere’s assets and employed about 225 people. The group was growing rapidly. They knew their customer’s well and marketed to the vendors of equipment, instead of the end users.

Real Estate Financing Group

This group made up forty-one percent of Windemere’s assets and employed 199 people. This group needs to concentrate on boosting its ability to sell variable rate loans. Sixty percent of their business is in fixed rate loans. With the interest rates sky rocketing as that time, it would behoove this company to offer an attractive alternative to high priced, fixed interest loans.

Treasury/Investment Division

This division investment portfolio totaled $545 million in 1988. It managed the asset-liability matching, liquidity levels and managed the investment portfolio of bonds, preferred shares and stocks.

Information Systems Group

Budget

The budget was way too high for an organization of this size. The salary cost exceeds two million dollars a year for 80 people. That worked out to an average salary of about $25,000 a year. They had too many people, making too little money. This leads to unhappy and unproductive people. Overall, the budget was about 5.2 million a year. It was Bartt’s view that he could cut the budget in half and get more done with twenty-five percent of his staff.

Internal Communications

Internal communications was a problem for everyone in the company. Everyone was still using paper and phone calls to communicate. One of the first items that Scannell insisted on was the use of electronic mail. He made use of the mail system on an IBM 4381 called Profs. He would purposely answer all correspondence with email, regardless of its original format. This forced people that needed answers, to get a terminal that could use email. In this manner, he was attempting to standardize on one communication medium.

Hardware Issues

The Information Technology infrastructure was made up of the following configuration:

[pic]

Software issues

The systems were not designed to talk well between each other. The programs were not written to be easily re-used. Because programmers all reported to different business groups, it was very hard to maintain any sense of order or structure.

Because the programmers were all tied up supported the old legacy systems, it left little room for new development. They were so use to fighting constant fires, they knew of no other way. The previous IT VP did not manage his/her people or budget very wisely.

Consultants did much of the new development. Most of them took advantage of the previous VP’s inability to see the proper solution. One consulting company said it would take between five and ten million dollars to complete a project and insisted that overages would be extra. Once Scannell asked how the numbers were derived, the consulting agency withdrew their proposal.

Documentation

Documentation was sparse to nil for most systems. Before a minor change could be made, an analyst would have to spend weeks recreating documentation. This would happen time and time again. It was discarded or not used after the change was completed.

Designs that do not promote the business needs

The main issue with the Savings department is its lack of focus on customer issues. All the systems are developed around their products rather than their customer’s. Each of their products has it’s own customer database. If a person or company used both products, there was no cross-reference that shared the same customer information. This lead to inconsistencies and not serving the customer’s to best of their abilities.

This department needs to develop a centralized customer database. It should then develop its applications around that database. The more reuse and integration you can have, the better they will be able to serve their customers.

Results and Discussion

Bartt realized that his group was in a shambles. He also realized to be successful; he could not spend time fixing old problems. He needed a new, radical change to wake up his staff and the people that they supported.

Staff and Budget

Bartt knew he needed to cut staff for two reasons, fiscal budget responsibilities and to send a clear message to his people that only high achievers were going to survive. He had a larger issue in that this was going to take at least 12-18 months to get to this point. He needed to keep his current staff to take care of the current architecture. But he could only keep 20 of them long term.

Architecture

The biggest problem with the IT infrastructure was that there was not structure to it. He had three different kinds of hardware that ran the primary business systems. In some cases one business unit would have to use all three systems to do their job. The size of the mainframes was very expensive to purchase, as well as maintain.

Bartt’s vision was to replace all the hardware with AS-400 IBM mainframes. There would be an AS-400 in each different location. They would all be tied together with a Token Ring network. This would allow for redundancy and a resilient company backbone network.

The AS/400 utilized a standard interface for all its programs, and had a fully integrated relational database bundled with it. This meant there was nothing more to buy.

The AS/400 was also able to support the Distributed Database Methodology. This would allow a database to be spread across different machines in the same network. You could split the database to put the most frequently access tables at the location that uses them the most. To the end users, it would appear that it was just one application.

It was also capable of storing the same information on different places on the network. This way, if one machine went down, the network could reroute you to a different host.

Rapid Applications Development

Bartt was forced to use the clean slate approach. It would take longer to document the old systems, than it would to rebuild a newer, better-designed integrated application. Bartt knew he did not have much time. He chooses to get out of the coding of systems as much as possible. He also knew that documentation needed to get recorded electronically. It was not good enough to just write it on paper.

He decided to use a Case Tools by Synon Inc. called Synon/2. This would allow them to rapidly develop prototypes, as well as production quality software. Synon claimed it would build any system a purchaser wished within a maximum of 90 days on a consulting basis, using the Synon/2 toolkit and Synon Staff.

Bartt thought this was a great idea, because he could use this project to get his top 20 people up to speed and learn from a profession software development team.

It seems like the current software development lifecycle use was that on a code and fix or at waterfall. Both of these methodologies lead to disaster. I would recommend that this staff develop under the Spiral Model Life Cycle (Kemerer, 259) or the Representative Software Development Life Cycle (PMBOK, 16) (See Figure -1).

This allows you to build a system in small pieces, each stage being built on the previous stage. This is effective because you do not wait to the very end to see that your project has failed.

Bibliography

PMBOK, Project Management Institute, “Project Management Body of Knowledge”. 1996.

Kemerer, Chris, F. Irwin McGraw-Hill, “Software Project Management, Readings and Cases”. 1997

[pic]

Figure 1 - Representative Software Development Life Cycle, per Muench

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