Architecting Business Solutions for the Enterprise

1. Architecting Business Solutions for the Enterprise Presented by: JIM CALDARELLA Senior Solutions Architect – i-flex solutions For more information contact: jim.caldarella@iflexsolutions.com

2. The CEO Song • Our technology is “bankrupt” • Our core systems are stretched too thin • They are overly complicated • We struggle to make mandatory changes • Improvements are expensive and slow • One-off upgrades are band-aids • On the whole, it gives us too little and costs too much! • How do we attack the problem?

3. The CTO Refrain • We must re-automate the back office • Ensuring that it supports today’s and tomorrow’s business needs • The changes must be cost-effective, high-performance, modern… • We need to do it “soon” • We won’t make a dent in earnings • It will conform to an enterprise-wide “Architecture”

4. Second Chorus • Our legacy systems are… • Insular…applications are not integrated • Out of touch with our marketing / sales initiatives • Complicated…some with 35+ years of tweaking • Expensive…the same IT ”capability” costs less every year • Untouchable…big changes to meet market needs—forget about it! • Loved…Tradition!…after 35 years, who doesn’t love their system? • We face real business risks… • Customer “trust” erodes…not quick, fast, agile, or strong enough • A huge disaster strikes…no one has a total view • Opportunities escape…they all don’t just fall on your head • Costs escalate…eroding earnings and creating a bunker mentality • Defensive spending rises…costs a lot, does little to help • Ill prepared for the unknown…

5. The Big Question • What is an architecture? • How do we get one that fits our business?

6. The Entire Space The Back Office Comprehensive, but not very useful

7. The Back Office Breaking It Down Your products and services Business What you offer to your customers

8. The Back Office Breaking It Down The work you do to deliver products/services Business Function Organized into business processes

9. The Back Office Breaking It Down The information you process Business Function Data Represented as data entities

10. The Back Office Breaking It Down The physical environment Business Function Data Infrastructure Buildings, computers, networks, people…

11. The Back Office What Drives What? Requirements Business Function Data Infrastructure [Degree of Abstraction]

12. Revealing the Essentials The components of each layer and their arrangement (the architecture) needs to be clear The components of each layer need to be presented in understandable ways (taxonomies / hierarchies) The relationships between the components of different layers shows how needs will be fulfilled (mapping)

13. Components - Business Teller Services ATM Services Internet Access Business Deposits Loans Payments FX L/C … Function Data Infrastructure

14. Components - Function Teller Services ATM Services Internet Access Business Deposits Loans Payments FX L/C … Getting Stuff In and Out Deposit Processing Loan Processing Payment Processing FX Proc. L/C Proc. … Function Posting, Reports, Risk Mgmt… Data Infrastructure

15. Components - Data Teller Services ATM Services Internet Access Business Deposits Loans Payments FX L/C … Getting Stuff In and Out Deposit Processing Loan Processing Payment Processing FX Proc. L/C Proc. … Function Posting, Reports, Risk Mgmt… Customers Accounts Relationships Data … Infrastructure

16. Components - Infrastructure Teller Services ATM Services Internet Access Business Deposits Loans Payments FX L/C … Getting Stuff In and Out Deposit Processing Loan Processing Payment Processing FX Proc. L/C Proc. … Function Posting, Reports, Risk Mgmt… Customers Accounts Relationships Data … Infrastructure

17. Architectures & Hierarchies Data (an example) Customers Accounts Relationships … A hierarchy presents complex organizations in an understandable way Legal Entities Account Holders … Prospects DDA … Loan An Architecture illustrates how things work by revealing the nature of component relationships Customers Accounts Legal Entities Account Holders … Prospects … DDA … Loan Own

18. Inter-layer Mapping Teller Services ATM Services Internet Access Business Deposits Loans Payments FX L/C … Getting Stuff In and Out Deposit Processing Loan Processing Payment Processing FX Proc. L/C Proc. Function … Posting, Reports, Risk Mgmt… Customers Accounts Legal Entities Account Holders Prospects DDA Loan Data … … … “Own” Infrastructure

19. Business Teller Services ATM Services Internet Access Deposits Loans Payments FX L/C … Function Getting Stuff In and Out Deposit Proc Loan Proc Payment Proc FX Proc. L/C Proc. … Posting, Reports, Risk Mgmt… Data Customers Accounts LE Acct Hldr Prosp DDA Loan … … … “Own” Infrastructure Applications Current Software Applications Acc Consistent and understand-able reference points LN FT Mother of all Mainframes FT DP LN Post GL Rep

20. Reasons for Change! • Minimize… • Redundant functions • Number of stops End-to-End • Parsing, editing, mapping, validating… • Technology limitations… • Maximize • Shared functions • Shared data • Standardization… • Know your data (your competition certainly does)!

21. Business Teller Services ATM Services Internet Access Deposits Loans Payments FX L/C … Function Getting Stuff In and Out Deposit Proc Loan Proc Payment Proc FX Proc. L/C Proc. … Posting, Reports, Risk Mgmt… Data Customers Accounts LE Acct Hldr Prosp DDA Loan … … … “Own” Infrastructure Connecting Old and New Current Software Applications Nirvana Acc Internet Access Payment Gateways … LN FT LN FT DP … Mother of all Mainframes Core Banking FT DP LN Post GL Rep Business Intelligence

22. Getting There Current Software Applications Nirvana Internet Access Payment Gateways … Acc LN FT DP … LN FT Plan Core Banking Mother of all Mainframes FT DP LN Business Intelligence Post GL Rep

23. Options • Remodel… • Cheaper, easier, less risk, requires a lot less thinking • New paint, new room…same old house • Build… • Very expensive in today’s world, very difficult, huge risk of failure, requires a ton of very expensive thinking • A new, custom-built processing environment • Buy • Cost effective, easiest, no risk, focuses thinking in the right areas • A new, off-the-shelf processing environment • Configurable…how much? • Better technology? Most are going to choose the “buy” option; Loss of competitive advantage is an issue!

24. Internet Gateway Branch Operations • Payments • Straight Through Processing • FT Liquidity management • Regulatory Compliance • Anti Money Laundering • Message Format • Queue management & Routing Loans Loan Syndic- ation FX Securities Custody Deposit Core Banking… Customer Information Risk Management DDA processing GL and Sub-Ledger Middle Office (e.g. confirms) Regulatory Reporting Account Analysis, Billing Data Warehousing / Business Intelligence The i-flex Model Fed…CHIPS…SWIFT…CHAPS … … Marts

25. FC… Internet Gateway FC… Teller Operations HPO (high-performance) or AutoFT…Payments FC… Loans FC… Loan Syndic- ation FC… FX FC… Securities Custody FC… Deposit FLEXCUBE…Core Banking Reveleus… Data Warehousing / Business Intelligence Our Products Fed…CHIPS…SWIFT…CHAPS … … Marts

26. Benefits • Cost Reduction • Savings in S/W maintenance / enhancements, D/C operations… • Savings in operations with improved productivity • Payback periods of 5 to 8 years on average • Risk Mitigation • An integrated view closes many of today’s largest holes • Improved operating control means faster response to issues • Better Compliance • Keeping up with regulatory controls is easier / less expensive • Improved compliance allows regulators to step back • Improved Responsiveness • New products and features are easier / less costly to introduce • User configurable software allows low cost market differentiation • Positive Customer Experience…

27. Thank You www.iflexsolutions.com