By Jon Milward, director of integrated solutions at Northdoor, looks at whether financial services firms can now rely on Microsoft to meet most of their business IT needs.
Microsoft is largely known for its consumer products and Office software. How has the firm been increasing its credibility as an enterprise IT provider?
Microsoft is still not being given enough credit for being a serious enterprise IT player. Traditionally the default provider for consumers and small and medium sized businesses (SMBs) for products like Office, the software giant in fact sits in the middle of the spectrum, between consumer-focussed vendors such as Apple and Google, and established providers in the larger enterprise IT space – the likes of SAP, Oracle, IBM and Cisco.
Microsoft reportedly spent over US$9.6 billion on R&D in 2011, which is significantly more than most IT and software companies. This ramping up of investment, particularly in the enterprise space, is hard evidence of the firm’s credibility for IT solutions aimed at larger corporates, as well as SMBs.
With efforts to address enterprise customers’ need for high-performance, resilient and scalable IT, Microsoft has released a series of products. The products launched this year alone included SQL 2012, Windows 8, Office 2013 and the Surface tablet, which all aim to address key current demands from enterprises.
How does this relate to the financial services sector?
This high level of performance and resilience is crucial for financial services firms in particular. As we have observed in the press recently, technical failings of critical business systems can be detrimental to firms both financially and in terms of reputation.
Furthermore, Microsoft is gaining traction not only in enterprise infrastructure but also with its portals and collaboration offerings. For example, many insurance firms have been using SharePoint as a document repository, reporting and workflow management tool as part of the requirement for Solvency II compliance. What makes SharePoint a success is its versatility so firms can tackle multiple business requirements with just one solution.
Many firms have begun to realise the value of managing and utilising data effectively. Regulatory requirements make this an additional priority for those in the financial services industry. Which IT solutions have been changing the data centre and business intelligence landscape recently?
There are number of challenges when it comes to storing, managing and utilising data. Firstly, the volume, velocity, and variety of data demands much more powerful processing capabilities. That poses a challenge to today’s data centres. Secondly, fundamental to any business intelligence is the quality, accuracy and accessibility of data. Thirdly, with ‘trusted’ data, business users also need to have the flexibility to generate analytics and reports according to their functional requirements.
Microsoft has considered these factors with SQL 2012, which features master data management, data quality services and self-service BI. Combined with SharePoint, users will also receive stunning and interactive visual representation.
These Microsoft solutions are relevant to banking and financial sector given tightening regulatory compliance. For instance, many new guidelines, such as those surrounding capital requirements – Basel III and Solvency II for banking and insurance respectively – demand rigorous discipline in terms of the accuracy and lineage of data from which the calculations are based on. There are also strict reporting requirements which require a lot of manual processes if the right tools are not in place.
The ability to tap into business intelligence also means that business leaders can spot trends to help them secure a competitive advantage, such as giving retail banks greater customer insight to meet demands.
This wealth in solutions available as well as the flexibility offered by portable devices such as tablets presents firms with a need to ensure all of their IT is linked up. How has Microsoft been putting significant investments in realising the vision of ‘unified communications’?
The ability to integrate functions across numerous devices is the jewel in Microsoft’s crown, with no other vendor able to offer as much flexibility. Microsoft has developed Windows 8 to give the same user interaction whether it’s used on a PC, laptop, phone or tablet. The new Microsoft Surface tablet equipped with Windows 8 will give business users all the convenience of a tablet and the same level of integration with their business systems as a PC. This increases the tablet’s attractiveness for enterprise as greater integration with existing IT will be easier to address. This is further testified with the new collaboration features in Office 2013 and the linking with Skype and Lync. Lync allows seamless work at home or in the office, with desktop and document sharing functions as well as instant messaging and video calling. A more integrated solution, such as the one Microsoft aims to offer, makes it easier for firms to control their IT and thus reduces security risks posed by using personal portable devices for work, a key concern for financial services organisations.
The economic uncertainty over the last few years has put cost reduction back on the board agenda. As one of a firm’s largest spend areas, IT is under the spotlight. What is your advice to CTOs and CIOs in financial services organisations in coping with the need to reduce costs while providing a greater level of services?
Today’s financial services environment is characterised by its volatility, with business fortunes changing on an almost daily basis. Firms are constantly having to adapt their plans to new conditions and keeping up with the raft of new regulations. Although it may seem hard to keep up with the new technology and often it’s seen as a cost, when utilised properly, technology can help to reduce costs, increase efficiency and enable growth.
Nonetheless, today’s business environment no longer accommodates monolithic, large scale IT solutions that require huge investment, time and effort to implement. Businesses need to unblock inefficiencies caused by disparate systems and processes with discrete and incremental changes. As a consequence, technologies must be more modular, interoperable and adaptable whilst being more cost effective.
What is next on the horizon for Microsoft?
By establishing itself a credible enterprise-class player, Microsoft claims to be “moving beyond the foundations of the past”. Its rapid move into the enterprise IT space not only aims to make business processes easier and more efficient, but looks to completely change the way workforces operate.
Microsoft is placing IT at the centre of a drive to make employees, partners, suppliers and clients work more closely together in a more integrated and connected manner. We therefore feel that future launches will be designed to further address this vision.
From a business perspective, with Microsoft establishing itself in enterprise IT, companies today can benefit from more options and competitive pricing from a more dynamic enterprise IT market.
Northdoor provides integrated information technology solutions. Its services encompass consultancy, application development, enterprise infrastructure and IT support and managed services.