Fidelity makes big XML conversion

This month, Fidelity Investments expects to complete a retrofit of its corporate data to an XML format in an effort that has already allowed it to gut a significant amount of hardware, proprietary databases and Web and transactional protocols. Analysts say the project is the largest of its kind and estimate that it could cost the investment firm tens of millions of dollars.

“When looking at the multitude of data required to be made XML-compatible within an institution the size of Fidelity, it’s mind-boggling,” said Sarah Ablett, a research analyst at Meridien Research Inc. in Newton, Mass.

Two years ago, Fidelity started looking for a way to simplify communications between consumer Web applications and back-end systems. During the past decade, the Boston-based mutual funds giant had installed a plethora of proprietary messaging formats, remote procedure calls, interfaces and commercial middleware applications, such as Sybase EnterpriseConnect.

By using XML as its core communications connection to translate data among its Web site, its Unix and Windows NT servers and its back-office mainframes, Fidelity was able to eliminate a glut of translation protocols and message buffers and 75 of its 85 midtier servers.

Bill Stangel, XML team leader and an enterprise architect at Fidelity, said a common language has also allowed the company’s IT managers to redeploy programmers, who were tied up writing interfaces, to work on more important business functions. The conversion should also improve time to market for applications, he said.

“It’s simplified our environment significantly,” Stangel said. “Instead of us having to invent our own messaging, we can now use XML as the common language. We can buy a book on it and give it to our programmers and say, ‘You can use this instead of inventing a new interface.’ ”

Getting the project off the ground was difficult, said Stangel, “but once the culture kicked in, we didn’t have to explain why XML is a good thing.

“People picked up on it and realized if we can reduce the complexity of our systems, we can have a real [competitive] advantage,” he said.

While it’s not unusual for financial services firms to develop XML formats for future or even current information, it’s somewhat rare for a company to spend the amount of money Fidelity is believed to have invested to retrofit all of its internal information, said Neal Goldman, an analyst at The Yankee Group Inc. in Boston.

Fidelity officials declined to comment on the specific costs or savings associated with the project.

Several XML standards compete in the financial services industry, including Financial Information Exchange (FIX), a protocol used by a group of asset management and brokerage firms for the real-time exchange of securities transactions. Currently, FIX developers must write application-level code to validate the structure of FIX messages.

Instead of going with one of several proposed XML standards, Fidelity settled on its own proprietary version of XML because of the early adoption of the technology and the fit with its investment business.

As Fidelity looks to convert its external systems to XML, Stangel said, the firm will consider evolving standards such as FIXML for FIX messages or RIXML, which makes it easier for investors to share information about companies.

“Our work upfront has put us in a good position to now take advantage of these next-generation [XML standards] as we move forward,” Stangel said. “We probably won’t move to one of the tag standards, like ebXML. That doesn’t fit our business. But we will take advantage of the next part of that protocol, schema structures and those types of things, instead of us having to invent those components.”