ThinkTank Explores How Web Services Can Cut Coding Costs

Some of the nation's best-known financial companies will meet in New York next week to explore how standards-based web services (and related open standards) can speed up projects by cutting the amount of code it takes developers to launch or modify a business process. Get an overview of the event, and some insight into how Merrill Lynch is using open standards to cut costs.

Tags: Web Services, SOA, Schmelzer, Financial Services, Business, Interfaces, Firms,

Some of the nation's best-known financial companies will meet in New York later this month to explore how standards-based web services (and related open standards) can speed up projects by cutting the amount of code it takes developers to launch or modify a business process.

"Web services isn't just an integration story. For many firms, especially those with mainframes, it's a cost-of-change story," said Ronald Schmelzer, a senior analyst with ZapThink, which is also sponsoring the ZapThink Tank 2003 event on Oct 28 at the New York Helmsley Hotel. Speakers and attendees from JP Morgan Chase, The Hartford, MetLife, Lehman Brothers, Reuters and Mass Mutual are scheduled to appear.

"The cost-of-change issue, which includes changing your data, upgrading your process, adding a new product, etc., has become huge for many financial firms," Schmelzer said, "and that's mostly because everything exists on the mainframe. Every time a company wants to expose something from their mainframe to give their branch customers or at-home users access to new features or a better experience, it's been a costly and painful process because developers have had to build a new CICS transaction for that change."

Heart of the Pain -- Heart of the Relief
Even with adding a new field to an existing web interface, the process requires a new mainframe transaction, Schmelzer said. This pain is causing a growing number of financial services execs to look for a better way to effect changes to their existing code (business and application) by using standards-based web services (notably WSDL interfaces) and other open standards, he explained.

Merrill Lynch provides a picture of just how motivated some financial services firms are to find a better solution. Merrill has some 23,000 separate CICS transactions, and that list is growing each day as the firm looks to enhance existing online products or launch new ones, such as providing certain premium customers "live" Level 2 quotes online for their trading.

Several years ago, Merrill turned to an integration broker vendor to cut this complexity, but over time found that even that approach was expensive and wouldn't scale. "They still had to write the code and put it somewhere, and that somewhere turned out to be the [proprietary broker] platform," Schmelzer said. Today, Merrill is moving more toward using web services interfaces, he added, noting that on just one project, Merrill's IT department cut their costs from $800,000 to under $30,000.

"It may take business execs minutes to decide to change a business rule, but it can take IT months -- or longer," Schmelzer said.

The key to relief from these costs and delays, Schmelzer explained, is that firms are beginning to devise modeling and business process methods that allow architects, business analysts and developers to all work together from a unified view of their assets: business rules, code, interfaces and completed applications.

"All these resources should be thought of as reusable or accessible through easy-to-create interfaces," Schmelzer said. When Schmelzer talks about reusable, he's not discussing rebuilding code or customizing components; rather, a service-oriented approach to accessing and reusing the code you've already installed. This is being done by these firms through WSDL interfaces and tools that can generate WSDL files. "So long as you understand the rules, it's pretty straightforward even today to go from a WSDL file to a Java, BizTalk or EAI implementation," he said.

The morning session of the full-day seminar focuses on understanding web services and the SOA big picture, while the afternoon dives into the brass tacks of implementing SOAs (Service-Oriented Architectures) in financial services and insurance. Since this event is aimed at providing enterprise end-users and web services/SOA vendors a way to learn from each other's experiences, networking time is built into the schedule, affording opportunities for cross-pollination of ideas, knowledge and experiences among financial services and insurance professionals and the companies that serve them.

The detailed technical topics on the ZapThinkTank 2003 agenda include how to implement and take advantage of open standards to develop SOA Best Practices. Technical solutions will provide details on:
  • The different value propositions for SOAs, and how to communicate them within an organization;
  • When a simple web services project is sufficient;
  • Key roadblocks and challenges in implementing web services and SOA projects, and ways to surmount those challenges;
  • How to build acceptance for an SOA pilot project;
  • How to assemble an SOA project team; and
  • The critical components of SOA infrastructure you'll need to get started with your SOA project.
Individuals or companies looking to attend or otherwise participate in ZapThinkTank 2003 can contact ZapThink at 781-207-0203 or online.