In response to conversations with some Life and Pensions organisations recently I have been pondering the future of the data centre in that sector.
Regulatory challenges, internal operational strategy, and intellectual property all influence the future of the data centre in the Life and Pensions sector. Although the provision of information technology is not the key business of an L&P organisation, it is understandable that these influences will result in a desire for a number of these organisations to deliver at least some technology services internally.
Whilst regulatory requirements continue to be immature in comparison with the IT industry’s experience of delivering technology, those responsible for risk will be driven by caution regarding placement of customer data. Within those constraints, additional questions will continue to be asked regarding placement of homegrown, organisation-specific applications which in their way represent a company’s intellectual property.
The advantages and disadvantages can be debated and in reality, the future for some financial services institutions will be outsourcing of their entire IT estate, for others to maintain their own IT function but to use only cloud, and for others the preference will be to use a hybrid cloud model.
In all honesty, I expect the same considerations and changes will have an impact on all – or most – financial institutions, no matter the specialism, although my expertise across the Financial Services sector varies.
Systems of Engagement are a Driving Force upon the Provision of IT
IT is moving from Systems of Record, focused on transactions, to Systems of Engagement, focused on interactions. To quote Martin Gale, IBM Client Technical Architect, “Systems of Engagement support consumers and knowledge workers in the achievement of their objectives. Systems of Engagement optimise the effectiveness of the user by providing the required responsiveness and flexibility to deal with the fluidity of everyday life.” Martin explains that although Systems of Record will continue to have a key role because of their efficiency and robustness in quality of service, they have limitations as they are usually enable only a subset of the process to achieve the real outcome desired, and are constructed from a provider’s point of view rather than the consumer’s.
The Harvard Business Review describes nine traits of Systems of Engagement:
- Design for sense and response
- Address massive social scale
- Foster conversation
- Utilise a multitude of media styles for user experience
- Deliver speed in real time
- Reach to multi-channel networks
- Factor in new types of information management
- Apply a richer social orientation
- Rely on smarter intelligence
These Systems of Engagement will have new workload characteristics such as an integrated lifecycle (through DevOps); rapidly changing, bursty workloads; eventual consistency and continuous availability. They are enabled by the proliferation of mobile devices, the increasing use of social tools, analytics and big data capabilities, and cloud computing as a delivery model.
As traditional L&P organisations move to a more customer-focused model and greater embrace mobile and social technologies, the underlying platforms must be enabled as systems of engagement. New entrants to the market will have the advantage with greater flexibility in developing such systems.
Increased Industrialisation of IT
As the architecture management discipline matures further it will be possible to enable standardised and integrated application and infrastructure landscapes underpinned by automation of IT service design and delivery. A L&P business should have these demands of their IT provider, whether an outsourcer or internal organisation.
IT processes must be made efficient by running on top of an optimised application portfolio and a scalable IT infrastructure.
With increasing pressure on cost of resource the application delivery model, IT service operations, support and management model should be optimised to balance resources. Alignment of skills should be performed with respect to business requirements; cheapest skills do not always lead to cheapest models.
Although more centralised IT functions have arisen in industry to provide greater control and standardisation, the weight of influence on IT decisions is increasingly coming from lines of business, increasing the importance of alignment of business and IT strategies. Governance is ever more key to ensure effective and targeted IT service provision, especially where growth means that technology delivery moves to a global model.
Next Time… DevOps, Automation and Cloud…