IT Playbook: Great Works

Three projects completed in 2004 provided equal parts risk and reward for these IT leaders.

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This year's Premier 100 IT honorees have varied backgrounds and strengths, but they have much in common as well. One unifying theme: In the past year, they have led projects that are impressive in scope, technology and contribution to larger business goals. Here's an inside look at three significant IT projects and the IT leaders who brought them to fruition.

A Deliberate Enterprise Storage Plan

In 2000, with its business growing rapidly, MasterCard International Inc.'s storage capacity was reaching a critical point. By adding large numbers of servers and storage individually, the company was squandering resources -- some applications had excess capacity, while others needed to be upgraded. At the time, most of MasterCard's storage was direct-attached and thus couldn't be shared across platforms. James E. Hull's group recognized the problem and took action, creating a strategic road map for enterprise storage.

The company decided to implement a large-scale storage-area network (SAN). EMC Corp. was selected for the backbone architecture, and MasterCard spent roughly 18 months migrating to the new standard. According to Hull, the benefits, even during this first stage, were "immediate and visible." The company cut time to market, eliminated inefficiencies, lowered storage costs and improved customer service.

James E. Hull, vice president of engineering services at MasterCard International Inc.
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James E. Hull, vice president of engineering services at MasterCard International Inc.
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Next, MasterCard sought to both implement better management tools and further integrate "SAN islands" into a larger SAN, Hull says. Again, the company opted for EMC, this time choosing its AutoIS suite. MasterCard's IT group uses AutoIS to determine the storage that's been allocated versus what is in use, so now storage is increased only where needed. The bottom line: more efficient purchasing of storage capacity and improved management.

During this hectic phase of the SAN project, Hull's seven-member storage team also implemented a core-and-edge switch design, simplifying the installation of both servers and storage. Hull says storage provisioning that used to take weeks is now done in minutes. (He says he's proud to have established that dedicated team, too. Hull believes that when storage tasks are segregated by operating system or line of business, inefficiencies are inevitable.)

To measure its progress, MasterCard recently hired Gartner Inc. to perform a study measuring the total cost of ownership and effectiveness of its SAN. Gartner found that the company's storage team manages nearly 50TB per full-time employee in the group -- that's 76% more than other, similar organizations. In addition, the study determined that in the metric of cost per available gigabyte, MasterCard beats the industry average by 16%.

Impressive as those laurels may be, Hull and company aren't resting on them. "OK, so now we're efficient," he says. "Time to move to the next challenge."

MasterCard is now tackling several advanced storage challenges. It's shifting a 70TB data warehouse from EMC's premium Symmetrix platform to the vendor's midrange Clariion offering. "That's going to cut our cost by a factor of six and will still meet our users' needs," Hull says. The company is also investigating information life-cycle management, which would essentially automate the migration of stored data from one medium to another.

Most intriguing, Hull says, is the growing trend toward content-addressable storage. Pressured by regulations such as the Sarbanes-Oxley Act and by high-profile court cases, U.S. businesses have taken to saving and storing virtually all digital information. That's handy when you need to produce a given e-mail message -- but it's also expensive and inefficient. Content-addressable storage promises to help businesses save merely one copy of an e-mail sent to six people -- not all six copies. "It will allow us to not overreact to every new regulation," Hull says.

A Comprehensive Web Portal Project

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Richard E. Earle, CIO of Chrysler Group and Mercedes-Benz NAFTA at DaimlerChrysler AG
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Richard E. Earle, CIO of Chrysler Group and Mercedes-Benz NAFTA at DaimlerChrysler AG
DaimlerChrysler AG's Chrysler Group includes more than 5,300 dealerships in the U.S. and Canada, as well as another 1,500 worldwide. The automaker offers those dealers about 240 applications covering everything from support and training to sales. Until 2003, there was no standardization of those applications -- most lived on servers located at individual dealerships, with little or no centralized control, while some were accessed through fragmented stand-alone Web sites.

Richard E. Earle, CIO at Chrysler Group and Mercedes-Benz NAFTA, led an ambitious Web migration, placing all the applications on a portal dubbed DealerConnect. U.S. application migration to the portal was completed in 2003, and by press time, virtually all of the division's dealerships worldwide will be using DealerConnect. The benefits of the portal are indisputable: faster updates of vital information, centralized content management, less reliance on individual dealers' IT savvy, and real-time flow of data.

The DealerConnect applications are built to J2EE specifications. DaimlerChrysler's J2EE platform covers a large enterprise network, including application components, security services, database connectivity, a naming service and messaging services in development, testing and production environments. IBM's WebSphere Application Server is the Web platform.

Early on, Earle's team made some interesting decisions about tackling such a vast project. The automaker would be migrating a huge number of applications to the Web for the first time. Rather than turning to a systems integrator, "we decided we wanted to own the development and maintenance" of the initiative, says project lead Bill Whedon.

According to Earle, there were two primary reasons for tackling the project in-house. First, staffers had deep knowledge of the company's business rules and the often complex relationships between automakers and their dealership networks. Second, "we wanted to reskill our people" on the Web-based applications, Earle says, to both ensure employees' career paths and continued in-house maintenance and development of DealerConnect.

With 300 to 500 IT employees working on the project at any given time, Earle set up a project management team dubbed the Web Program Office. Led by Whedon, the team played two vital roles. First, it made sure that staffers were deployed where they were most needed -- no small feat when you're attacking 240 applications simultaneously. Second, the Web Program Office served as a liaison in the tricky three-sided relationship among application development teams, overall IT management and business people. According to Gartner analyst Ray Valdez, such liaisons can mean the difference between a successful portal project and one that merely Web-enables a few applications.

DealerConnect was an immediate hit with DaimlerChrysler dealers. The portal, available in 10 languages, is employed by more than 300,000 users and serves 8 million page views per day. Earle says the project succeeded because his IT team did its spade work ahead of time.

"With a project like this, people tend to focus on the applications," he says. "But you need to take a hard look at the infrastructure, too. You need to develop a lot of metrics so there are no surprises." Other than pleasant ones for users, that is.

An Intricate Electronic Trading System

Steven J. Randich, executive vice president and CIO of operations and technology at Nasdaq Stock Market Inc.
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Steven J. Randich, executive vice president and CIO of operations and technology at Nasdaq Stock Market Inc.
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In 2002 and 2003, a longstanding shortcoming threatened to pull business away from Nasdaq Stock Market Inc. Unlike its primary competitor, the New York Stock Exchange, Nasdaq is a decentralized electronic stock market with hundreds of broker-dealers creating individual markets. As such, it lacked a definitive way to set closing prices for listed stocks. Rather than providing a bona fide closing price that reflected true supply and demand of shares, Nasdaq simply listed the price of the last transaction of the trading day.

"That final trade may have been for 100 shares or 1 million shares," says Steven J. Randich, executive vice president and CIO of operations and technology.

These unusual trades, called outliers, presented a misleading picture of a stock's performance to mutual funds and other institutions. "Nobody likes uncertainty," says Gartner analyst David Schehr. The shortcoming came to a head late in 2003, when Standard & Poor's and Dow Jones & Co. indicated that they would investigate alternatives to Nasdaq for use in pricing their indexes.

To combat the threat, in October 2003 Randich and his IT organization launched a project called Closing Cross, an electronic transactions auction. Closing Cross, which kicks in during the final 10 minutes of each trading day, broadcasts to all Nasdaq traders vital data on Buy and Sell interest.

"Everyone can see the amount of stock we expect to execute, the amount expected to be bought and sold, any imbalance, the expected price" and other information, Randich says. Moreover, that data is continuously updated. At the moment the market closes, all of this data from the final 10 minutes is computed to set a closing price that's very accurate because it takes into account the high volumes.

Developed in-house, Closing Cross demands massive processing power; it runs on 11 16-processor Hewlett-Packard Co. NonStop servers. Software was written in-house by Nasdaq developers. Price changes occur up to 200 times per second, Randich says.

Closing Cross entered production in April, ahead of schedule. Opting for a gradual ramp-up, Nasdaq started with a limited number of stocks and added to the closing auction until June 25, when the full palette of 1,650 stocks was included. (Nasdaq lists about 3,200 stocks, but Randich says only the 1,650 have sufficient liquidity to be part of Closing Cross.)

June 25 also happened to be the Russell index's annual reconstitution day, the highest-volume market close of the year. "Closing Cross performed perfectly with all of Wall Street's eyes on it," Randich says with clear pride. "In one instant, over 333 million shares were automatically executed in the auction, with the system processing greater than 16,000 trades per second."

It's been all systems go ever since. Closing Cross has had 100% uptime since its launch. According to Gartner's Schehr, the success of the initiative is a major reason why the Dow Jones, Standard & Poor's and Russell indexes continue to base their calculations on Nasdaq's closing prices.

Under heavy pressure, Randich's IT team rapidly developed a complex system that solidified the exchange's competitive position and even spurred renewed commitment from vital partners. Now that's a Premier 100 performance.

Ulfelder is a Computerworld contributing writer in Southboro, Mass. He can be reached at sulfelder@charter.net.

Copyright © 2005 IDG Communications, Inc.

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