Barclays Bank, one of the largest financial institutions in the UK, is enjoying an astonishing 90% rate of code reuse in its recent reengineering effort. At the same time, the bank has replaced its monolithic legacy code with component-based applications that can be modified as business needs dictate.
Barclays Merchant Services, the credit-card arm of Barclays Bank, started the reengineering effort, called the Darwin Project, five years ago and spent an estimated $33m. But bank officials say the first application rolled out justified the project`s cost. The application let Barclays introduce new business processes and create new sources of revenue.
The Barclaycard system handles all transaction processing and decision-support activities associated with merchant services, from credit-card authorisations and billing, to reporting and merchant-marketing programs. The information system manages core credit- and debit-card merchant accounting, which totals 3m transactions daily from 126 000 retail outlets. These transaction volumes attest to the success of this multitier reengineering effort; most high-volume systems in banking remain on centralised host processors.
The primary motive behind the project was to deliver better customer service, and therefore be more competitive in an increasingly crowded field, says Ian Gausden, head of development at BMS and the Darwin Project`s controller. The pressure was on Barclays to develop new service offerings and to get into new markets such as e-business. Darwin gave Barclays the ability to offer merchants a wider range of payment and service options.
Barclays also wanted to share more of its credit-card information with merchants. For example, a retailer with 200 stores might want to know how many transactions occurred at each store on a daily or weekly basis, in addition to the type and size of transactions. A smaller retailer might need that information only monthly.
This flexibility was beyond the means of Barclays` mainframe UKIII system, implemented in 1977. Making even incremental changes to the system was expensive and time-consuming. However, the mainframe system was reliable and easily handled the bank`s high volume of credit-card transactions. Barclays decided to keep the mainframe and evolve the architecture to include middle-tier processing on Unix servers and PC clients.
Upgrading to meet increasing transaction demand was a major design focus of the project. The new system can summarise transactions daily to avoid processing everything at the end of the month, as had been done in the past. The bank upgraded the MVS system to a parallel host architecture and replaced its flatfile IMS database with DB2. The middle tier consists of RS/6000 Unix servers.
More than 200 users access the system with PCs running Micro Focus Cobol terminal emulation software, which acts as a window to the RS/6000 systems.Extra benefits
Creating a central database was one of the major pieces of the Darwin Project, which involved migrating from IMS/TCAM to DB2 and CICS. The application data also had to be moved, and this effort generated an unexpected bonus - a reusable framework for converting data files. Some 400 000 merchant records, 40m data fields, and 1m customer names were converted. The conversion tool and methodology was subsequently used in other client-server migrations in Barclays.
The migration process was divided into three phases - data extraction, conversion, and creation - allowing for fast data clean-up and multiple-platform development.
The tool, which took 300 days to develop, was designed only after off-the-shelf products were evaluated. Barclays decided it would be cheaper and easier to develop a tool tailored to the company`s specific needs than to retrofit a packaged application that might never address all of the requirements.
Barclays used Cayenne Software`s tools for data modelling and business process analysis and Netron`s Fusion integrated development environment and component library. Fusion let Barclays build an architecture that encapsulates platform, services, technical infrastructure details, object code, database access, and GUI code as reusable components.
Upkeep costs
Barclays conducts ongoing cost/benefit analyses of each of Darwin`s dozen or so subprojects. The Darwin Daily Settlement system, for example, processes incoming merchant transactions and performs merchant settlements. The system lets Barclays monitor individual transactions, control the timing of settlements, and assess the associated risks of fraud or nonpayment.
The application that has helped most in carrying out Darwin`s customer service goals has been the customer case management system. When a customer calls, Barclays service personnel have full access to the customer`s credit history. The old system gave only a high-level overview of account details.
This case-based system has also brought benefits in conjunction with Darwin`s debt collection application, the first part of the new system to be delivered. The management system, along with other work process improvements, such as work queuing, enable users to more effectively monitor and handle arrears cases.
This type of application functionality is readily available in commercial products, says Neil Ward-Dutton, a senior analyst with research firm Ovum. Barclays could have bought packaged applications and implemented the new system in a lot less time, with less effort and money, he says. "Big banks have always had a development culture. Increasingly, we`ll see IS departments buying more software rather than building customer applications."
While vendors of packaged applications plan to introduce component-based software that offers greater flexibility, that hasn`t happened yet. "For a business like Barclays, a 75% fit is the best you can expect with a packaged application," says Paul Bassett, a senior VP at Netron. "Why not make the most of legacy systems that have been honed to fit business needs over a number of years?"
Gausden is also unconvinced by Ovum`s argument. Barclays undertook its effort long before there were commercial components on the market. All the same, Barclays is undertaking a strategic review of its business and IS plans. One thing is clear: Darwin will evolve further, with software reuse at the core of future development.
Source: Information Week
Share
Editorial contacts