Read part one.
It's absolutely possible to go from zero architecture. We have customers where they are just beginning to decide on an architecture. Part of the frameworks and part of the value of what we do with the frameworks is there is a methodology that goes along with it. So if you're working with a customer, who is already down the SOA path, we might go one way. The customer who is not doing SOA, or is just starting it, we can handle all of them. The guidance that we give customers is you get greater bang for your buck if you are moving on the SOA journey. This is an easy way to get started with SOA because we've built the platform for you that helps you get a head start. That seems to be comforting to the customer who doesn't know where to start. How does a business usually start with SOA?
The typical conversation I have with a customer goes like this. They say: "I love what you're telling me. I see the value. Where do I get started? I got this sea of stuff. Where do I begin?" I say begin at the beginning. Give me one pain point and let's start there. Over time, we'll get you there. So is SOA adoption for those customers a matter of just putting one foot in front of the other?
It's funny. I was talking to one of the analysts today and he said: "You've got to leap forward." And I said, no, you've got to start with pain points. Most of them are not ready to take big leaps. Some of them are, but most of them want to be sure they are taking as little risk as possible. They're betting their businesses on this and we have to make it relevant. Over the last few years, are customers perceiving less risk in SOA adoption?
I think customers are recognizing that the issue really isn't the technology. That's not where the risk is. The technology is there. The issue is with corporate culture, but that's one of the risks I think companies are willing to take, changing the culture. Because of the global economy they are seeing increased competition. So they are willing to jump in, but they don't want to jump in with just anybody. They want to be with somebody they know isn't going to run away, has made an investment in technology to help them make the journey, and somebody with technology that is in line with where they want to go. They also find it less risky because the alternative is worse. The alternative is to not be competitive. Is that worth the risk? I don't think so. IBM has announced this new SOA framework for banks, but that is a challenged industry right now, so what is the business value you're offering in that troubled industry?
I'm going to give you my answer in two parts because there are two major value propositions. Before I took this role my area of expertise was business intelligence and data warehousing, so this one is near and dear to my heart. It is when customers are struggling that they will go back to the basics of what they have to do fundamentally to change their business.
What the financial institutions have realized is that one of their fundamental problems is they have lost their customer loyalty. They have lost their intimacy with their customers. They do not know who their customers are. They don't have long standing relationships with their customers, which are families if you're talking about a retail bank, and corporations if you are talking about a wholesale bank. That is a major issue for them. So we find that in times of crisis that is often when financial institutions will invest in something like "customer care and insight." So they want to find out: "Who are the people we are servicing? Who are our most profitable customers? Who are our most loyal customers? How can we service them better? What are the services that we should be offering to them that we're not offering today?" That's a huge value proposition for them because it not only allows them to keep their customer, but it also allows them to increase the amount of revenue that they could obtain from that customer. That customer is still buying, but he may be buying elsewhere because they are not seeing the connection between their bank and the services they are looking for.
The second major value proposition is around fraud and compliance. These banks have been fraught with issues around fraud for credit cards, all different kinds of payments fraud. Then there are the issues around compliance for credit risk management. Customer care and compliance framework doesn't specifically speak to the issue of fraud because you have a tendency to look at the positive side of customer loyalty. But you also have to address the fact that we can see patterns of behavior that may not necessarily be the behavior we want to see our customers experiencing with our banks because it may be fraudulent. This framework is able to do all of those types of things because we can help a bank understand the source of their data, whether it's structured or unstructured and be able to trace it back to the source for compliance reasons. And we're able to determine trends for misuse of information that may relate to fraudulent activity.
So I think there's both a profitable reason from a customer loyalty part and a profitable reason from the fraud detection part.
Dig Deeper on Holistic governance, risk and compliance (GRC)