Keep IT Simple, Stupid

As new software and IT services increase in complexity, the need for a unifying strategy is more important than ever.

Jake Statham is a freelance writer based in Hong Kong.

The New Standard Bearer?

End-to-end solutions versus best-of-breed? For an increasing number of companies, this perennial IT dilemma may soon fade. The emergence of open-standard web services promises to make sharing data between applications so much easier that both traditional systems integration and end-to-end solutions will become less necessary.

One company that is pinning its hopes on this vision of the future is Hong Kong-based Tai Fook Securities. Tai Fook is overhauling its IT infrastructure to prepare for expansion into new product offerings — including forex, bullion, derivatives, and insurance — and new geographic markets, particularly China.

Refusing to tie itself to one technology, the company instead is following a strategy chief technology officer Nelson Ying labels the “three Os”: open source, open architecture, and open platform. At one level, Tai Fook’s new system will be conspicuously non-uniform, combining applications from US-based Sun Microsystems, Oracle, and BEA Systems. But, says Ying, every component will be replaceable and the system will make extensive use of J2EE, Sun’s answer to Microsoft’s .NET web services platform. This will provide the adaptability to roll out new products quickly as business dictates. It will also make it easier to integrate different trading channels, previously isolated “dynasties” that had little interconnection, says Ying.

As part of the plan, Tai Fook is also streamlining IT infrastructure. The company plans to consolidate some 100 servers onto fewer than 50 more powerful Sun machines that switch dynamically between tasks, a move expected to reduce substantially annual IT operating costs and capital expenditure.

Improved capacity and flexibility without increasing one of the company’s key cost drivers — headcount — are among the reasons for the change, according to CFO Peter YH Wong. The plan makes financial sense, he explains. Using a single vendor enables Tai Fook to obtain attractive terms. Also, the company is acquiring the new servers on a three-year operating lease. This allows it to pay only for the capacity it uses, “switch on” extra processing power as traffic dictates, and improve return on capital investment by booking the cost as revenue expenditure instead of a capital item. —J.S.

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