Digital transformation and platformification in a real-time world
Digital transformation is a material journey, one which has been enabled by exponential technology growth and the correlative rise in customer expectations. Shanker Ramamurthy, general manager for strategy and market development, industry platforms, at IBM, believes that change has occurred so rapidly that now customers’ “best last experience” will often become their minimum expectation in the future.
This change in customer experience and expectation is driving a move in the banking industry towards an infrastructure and architecture based in the cloud, rather than on premise.
“There is a transition happening from owning everything that I need to figuring out what I can get [on the cloud] as a service,” says Ramamurthy. “Increasingly in the modern day every enterprise – including every bank – is being forced to make these very hard choices in terms of ‘what do I need to own?’ The trick is in figuring out how I combine those together in a way that optimises for my business strategy for what I want to accomplish.”
Every IBM client is operating on multiple clouds, he adds. “The technology world of today is genuinely heterogeneous. A firm will have its own data centre, its own private cloud, and multiple public clouds. A typical example we see is a company operating on three or four clouds, including the IBM Cloud.”
That kind of complexity can be tough to manage, Ramamurthy admits. “How do you manage that? It’s something a lot of our customers are focusing on. This is what got us down the path of acquiring Red Hat.” IBM closed the $34 billion deal for Red Hat in July. “It was the biggest bet that we have made as a company. A $34 billion bet. We made it because we know the world of tomorrow is going to be a heterogeneous hybrid cloud world.”
Ramamurthy says that clients are going to need open modular standards-based software to enable them to work out where is best to put operate their workloads. “Red Hat was perfect because its technology is open, and it leverages a whole community’s work. It has that modularity. In the old world it would have taken seven years to integrate things. With this new world and the containerisation that comes with it, you can easily move things around – mix and match, lift and shift.”
The banking industry is ever-shifting towards platform models, adds the Big Blue GM. The cloud provides the perfect environment on which firms can base a multi-service and multi-product operation.
“The investment required on the scale required to be an infrastructure-level provider of cloud services means that there are half a dozen cloud providers that will be market leaders like IBM Cloud. What we offer is access that would otherwise require significant research and development to bring the pieces together.
“When it comes to smaller processes often someone will build a service and then the rest will use it. Why build your own HR system, for example, when solutions like Workday exist? Increasingly this is happening in banking too. We offer insurance processing for group benefits as a platform. In other industries we’ve got solutions like TradeLens which solve specific problems.
“A bank can do distribution without having to manufacture your products, you can do it without having to do all the back-office fulfilment. It’s a deconstruction of the value chain which decreases time to market, and in today’s world – the real-time world – time is the enemy.”