Infrastructure

11:00 AM
David Chapman, SunGard Global Services
David Chapman, SunGard Global Services
Commentary
50%
50%

The Shift from 'Big Bang' Software Releases to Small Changes

To keep pace with regulatory changes, capital markets should adopt the B2C industry's DevOp approach where organizations make numerous production releases per day, writes Sungard Global Services' David Chapman.

2012 has been an eventful year in capital markets. Amongst many other things, it’s been marked by some spectacular blow ups resulting from poorly released software. In fact, Wall Street firms don’t have a good track record when it comes to this, with releases frequently destabilizing systems, introducing new bugs and upsetting business operations. But this needn’t be the case. Taking a lead from the business to consumer (B2C) industry, and the development of DevOps in particular, can help overcome some longstanding issues.

At the heart of the problem in capital markets is the clash between IT Development and IT Operations, the teams charged with making and implementing new releases. The IT Operations team has a tough job. Its primary goals include software release, system stability, reliability, scalability, availability and support. It’s often a thankless task, but critically important. By definition, this team does not like change. The fewer software changes it needs to deploy, the happier it is.

On the other hand, one of the IT Development team’s primary goals is writing code to facilitate change and enable new business activities: developers are paid to make changes. So there’s a fundamental conflict here where team goals are not aligned. These problems are nothing new, but as capital markets infrastructure becomes more and more dependent on technology to become agile and maintain competitive edge, they are becoming magnified. This is where a look at the B2C industry can help.

In a B2C environment, instead of one-off, ‘big bang’ releases, organizations make numerous production releases per day. Each release has a smaller impact due to the smaller number of changes, meaning a release is not a big deal. Development and operations teams together respond rapidly to the needs of the business – and they need to: these industries are highly competitive, with lower margins and increasing volumes. DevOps is a new term that’s emerged from the B2C industry to describe this collaboration between development and operations. It allows operations to spend less time troubleshooting problems and more time designing how applications should be configured and managed.

As in the B2C industry, businesses operating in capital markets are experiencing declining margins, increasing volumes and have a critical need for efficiency and technology innovation. As a result, software developers need to build software that visualizes new business concepts quickly and efficiently. Once built, the same agility is required to bring the software to market, and to evolve it so that a firm keeps up with the latest industry developments.

The regulatory and compliance demands on capital markets firms are a good example of how DevOps can help here. New regulations keep coming into force; deadlines for compliance are forever looming. For a firm to respond effectively, business requirements need to be understood and the software to address them developed, deployed and released to production rapidly.

Regulations are often modified, however, and so formats need to be tweaked, new reporting tools created and corrections made. What should firms do – set off on another six month project to fix everything? Rather, it would be better if firms’ IT organizations followed a DevOps model, continuously evolving software and making small, incremental changes that are easy to develop, test and deploy.

DevOps has until recently been a grassroots initiative. But it should now be viewed seriously by IT management in capital markets firms as an effective approach to tackling the challenges facing their IT organizations. Just like in the B2C environment, capital markets software releases should be more frequent with smaller changes. This should result in less risk and more confidence that the blow ups that have been a feature of 2012 will be avoided.

—David Chapman, partner, Sungard Global Services

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Nathan Golia
50%
50%
Nathan Golia,
User Rank: Author
1/7/2013 | 4:20:19 PM
re: The Shift from 'Big Bang' Software Releases to Small Changes
Very interesting, David. I wonder if we'll see a similar strategy in insurance.

Nathan Golia
Insurance & Technology
More Commentary
M&A Activity Will Continue to Grow in 2015
Data shows that the M&A market continues to improve, and forecasts indicate deal making will be healthy in 2015.
Chief Data Officers: Organization Strategy & Cultural Change
Chief data officers are new to the financial services C-suite, but they are facing a number of challenges, including the need for new data governance and execution strategies, staffing, and new organizational structures to enable cultural change.
New York FinTech Innovation Lab Calls for New Entrepreneurial Applicants
Wells Fargo joins 14 other major financial institutions providing mentoring and guidance to the six chosen startups.
Micro Data Challenges in an Era of Macroprudential Regulation
Research and statistical analysis experts at central banks are tasked with developing sophisticated forecasts and models to identify systemic risk. Yet they are spending most of their time acting as data entry clerks, rather than developing these models.
The Perks of 'SmartSourcing' Shared Services in Financial Industry
A breadth of vital but undifferentiated business processes are still being replicated across the industry. They are all candidates for centralization.
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - Elite 8, October 2014
The in-depth profiles of this year's Elite 8 honorees focus on leadership, talent recruitment, big data, analytics, mobile, and more.
Video
7 Unusual Behaviors That Indicate Security Breaches
7 Unusual Behaviors That Indicate Security Breaches
Breaches create outliers. Identifying anomalous activity can help keep firms in compliance and out of the headlines.