Partnering up for global service

When two of the world’s leading financial institutions, Merrill Lynch and HSBC, decided to become partners in a global online investment service, IT executive Eric Whaley knew that supporting the joint venture properly would require much more than the hard work of a revamped IT department. It would take an orchestrated effort involving just about everyone in the company’s Toronto-based Canadian headquarters, from the CEO on down.

Whaley, the former CIO of CT Securities (the brokerage arm of Canada Trust), came on board in July 2000. He was charged with the responsibility for creating the technology strategy, hiring the IT team and putting the technology infrastructure in place to support the new company. When Merrill Lynch HSBC Canada Inc. launched in December 2000, Whaley assumed the role of chief technology officer and chief strategist.

A key part of that strategy would be the introduction of a new client Web site – – featuring research that is completely integrated throughout the site, faster and easier navigation, and new tools that deliver more competitive online investing capabilities. The site was officially launched last month.

Putting the team together

When Whaley joined the company it had modest technology that was suitable for its needs as a subsidiary of HSBC Bank. But those needs were about to change significantly as the joint venture moved forward and put in place its new business and technology model.

“We had to build a very capable IT team that had a flare for being entrepreneurial but was also structured and focused,” explained Whaley. “We didn’t want people going off in different directions, creating a variety of systems that in the end didn’t integrate.”

Senior members of the team had to be knowledgeable in the business, strong technically, and very good at managing projects and vendors. The operational team, whose job was to design the under-lying architecture, had to have all the right technical skills and attributes. They had to be very suited to working in a team environment; they had to have experience in the brokerage industry – or at least be fast learners – and be able to work hand in hand with the business side; and they had to be highly motivated and able to deliver quickly.

Whaley kept some original staff, and looked outside for expertise that did not reside within the company, sometimes taking several months to hire an employee with the right set of skills. In fact it took until March 2001 to get the operational staff fully in place.

Some of the new IT staff came from Merrill Lynch and others were independent consultants already working with the new company, who were excited by what was happening and decided to sign on full time.

Taking a business view

With technology playing such a major role in the new company, it was important not to lose sight of the business vision. Originally referred to as the Web project, work on the new site was later described as a distribution strategy implementation.

“That helped us change the mindset,” explained Whaley. “This was not a technology delivery. It was a business delivery that had a technology component.”

An executive committee helped everyone stay focused on the business. Along with Whaley, it included Peter Hickman, president and CEO; Chantal Walker, chief marketing officer; Jacques Fleurant, chief administrative officer and CFO; Jennifer Thompson, chief of client operations; and Joanne Sewell, head of legal and compliance.

“The whole company was behind this – it wasn’t just marketing and IT. Our management team took ownership of it,” said Walker. “We might not always all agree but we’d come to a conclusion that everyone could live with.”

Evaluating the Web offering

Recognizing that the client Web site was probably its key business offering, the company had to determine where it stood with the site in terms of service to its clients, and how well it operated the site from both a technical and financial standpoint.

“We realized that there were things we needed to change about it so that we could improve the offering to our clients,” said Whaley. “Changes were also needed so that we could position ourselves to move forward much better in the future, offering improved service and at the same time making it a cost-efficient environment.”

This raised a multitude of questions. How does the site have to integrate with the whole organization? How do the business processes behind it need to change? How can the company business architect the way the environment will look? If the business architecture is built in a particular way, what kind of functions would the company be able to offer its clients? What would be the long-term opportunities or constraints of various approaches?

Five business architecture layers

After careful consideration, the business architecture was broken into five layers:

1. The Front End. A good front end was imperative. The client experience must be excellent, and there would have to be alignment with the company’s UK offering. There must also be alignment with the CEO’s and the chief marketing officer’s vision for the business.

2. The Data Model. The back end of the business wasn’t really encumbered by legacy systems. MLHSBC had more or less a green field to work with. So the question became: if we want to bring this product forward and integrate it with other channels, how would we build that data model behind the scenes? Another key consideration was what kind of data model would be desirable two years out, based on the company’s vision of its different offerings in the future.

3. The ISM Environment. The key environment MLHSBC had to work with was ISM. ISM provides back-office functions for brokerage firms across Canada. It handles all of MLHSBC’s trading information (e.g. trade entry, client account holdings, etc.), so proper integration with the ISM environment would be crucial.

4. Market Data. Being an investment firm, market data such as quotes, news, charts, research, and so on are very important to MLHSBC. So the question became how to provide market-data services and make them standard with everything the company offers (e.g. what the agent has on the desktop, what the company offers on the Web site, and what it offers on any other platform).

5. Client Communication. Finally, it was important for the company to organize the method in which clients communicated with it. How could it take its business distribution strategy and map that onto its technical distribution strategy? What would have to be done to make that distribution strategy work?

Lining up vendor support

This was obviously going to be a fairly big project and so MLHSBC decided to get the best vendor partners available for each of the areas that needed to be addressed.

Most contracts were to be on a fixed-cost basis, and in order to get vendors to commit, a great deal of time was spent mapping out what the site should look like, what the experience for clients should be, and how the functions should work in detail. In the end, MLHSBC was able to provide such a thorough level of detail that vendors were assured enough to sign on to the project.

“We talked to Microsoft and said we want a middle-tier piece of software that can talk to our information sources and then provide information to our front end in a standard XML format. This would remove our dependencies on different back-end data systems,” said Whaley. Microsoft came on board and the two companies worked on the specifications for what that middle tier would look like.

XML was to be used as a standard going forward, which meant that MLHSBC would have to look outside for the necessary skills to fine-tune the front-end. Therefore it contracted with Personus (now a part of Cognicase), a company that was not only strong technically, but also understood the investment business and was good at working with middle-tier partner Microsoft.

The third piece – getting everything to work with ISM – would have been very difficult if MLHSBC had tried to write it from scratch. Instead it found a vendor, that could provide what was needed more or less off the shelf. Here was another company with the right attributes for the environment – they were good at working in a team, and good at working with MLHSBC and Microsoft.

In the area of market services, MLHSBC tried to leverage what it could from its U.K. parent. The firm’s market provider globally was Bridge Information Systems; they were found to have exactly what was needed. So Bridge was contracted to customize some of the services that were offered on the site, and again, they fit well into the mix.

The final piece of the vendor puzzle was Multex. This was the company’s research provider globally, and the Canadian operations leveraged that, bringing Multex on board.

Taking the management reins

Rather than outsource the work on the new site, MLHSBC chose to take on

the job itself. By managing the entire initiative themselves, the company would be in control of how the project was delivered. At the same time it would be able to ensure that knowledge transfer happened. In the end it would have staff that understood the technology, both from an operational infrastructure level and from an application development level.

Each of the vendors would be treated as the technology deliverers behind

the pieces they were asked to do. Requirements were specified and MLHSBC assigned what the project planning would look like. It managed the vendors individually and as an integrated team, along with its own people.

“It was made clear to the vendors that we would take the risk on,” said Whaley, “because what you can run into is vendors not working together well or not

integrating together well. And then you hit a roadblock. But we said, we’ll take that risk on because we can make it work. We had confidence in our ability to manage the vendors, get decisions done, and get through problem-solving.”

Rolling up their sleeves

It was very important – at the beginning of the project and on a daily basis – that each vendor knew what its responsibility was and that there couldn’t be hard lines between vendors. The five vendors and MLHSBC staff had to be a team.

Depending on what point the project was at, meetings were held on a weekly, bi-daily or, nearing the end of the project, even daily basis. Though the meetings were only a half hour to 45 minutes long, they allowed everyone to talk about what problems and issues were occurring.

Everything was laid on the table with all vendors present. That way, problems were driven through to resolution and decisions were made quickly so that people could get on with the work.

“I think if you talked to any of the vendors they’d say the meetings were extremely beneficial because they let everyone know what the present status

was: who was working on what, what problems existed, how they were being addressed, who’s addressing them, and what the next set of actions had to be,” said Whaley.

Immediately after the meeting, the points discussed were put in written format electronically and everyone would get a copy. At the end of the day Whaley would go through his copy to see if expectations were met. Then he sent out a status report saying ‘this is what we said this morning, this is what actually happened by the end of the day, see you tomorrow morning.’

Internal resources

Key members of the in-house IT team were vice-president of application planning & development, Chris Hawman, responsible for vendor management, development of market and data research services, and assistance in business readiness; vice-president technology operations, Donna Rudnicki, who managed the infrastructure implementation and managed acceptance testing; and vice-president e-commerce technology, Chris Butler, who managed application functionality development.

These three worked together and helped manage the vendor group. Whaley worked with them as a team to make sure that everyone was doing what they needed to do, that things were on time, that decisions got made, that problems

got solved, etc.

Input from the business side was also vitally important. Assignees from different areas of the business worked closely with the development team. Every stream on the project where a business process was being affected or a data migration was being made included someone who was an owner within that business area, working hand in hand with someone from the technology side.

Chief marketing officer, Chantal Walker, was a key influence on the client side. She managed the design of navigation on the site, to ensure that it met clients’ needs, and she also played a big part in managing the migration of clients from the old site to the new site.

Up and running

Throughout the delivery of the project, the team operated full out. Instead of

the day ending at 6:00 p.m., it was not uncommon for team members to trade

e-mails well into the night, sorting out problems. Final delivery was a couple of weeks later than anticipated, but considering the scope of the project this was well within reason.

“We were delayed a little because we wanted to ensure a smooth migration for our clients,” said Whaley. “We probably underestimated a little the time it would take to migrate their data, and communicate with them about what the features are, what they are going to experience the first time they log in, and what’s going to change for them in the future.”

Whaley admits the challenges are not over yet. Client migration is still going on, and it will be important to do a good job of that. And when that job is done … well, there’s wireless on the horizon; more services to provide; more channels to integrate. The work never really ends.

David Carey is a veteran journalist specializing in information technology and IT management. Based in Toronto, he is managing editor of CIO Canada.