Radically Simple IT Case Study

1-Review:

David Upton and Bradely Staats wrote business review about a radically new approach to develop IT systems known as “Path-based approach”. This review is a case study of Japan’s Shinsei Bank IT department and how they revolutionized retail banking in Japan city. Masamaoto Yashiro is the former of Citibank at japan and was brought in as a new CEO in 2000 then he hired someone known as Jay Dvivedi who used to run all the IT operations for Citibank Japan as his CIO. All the two persons were planned to develop a new enterprise system to the Japan’s Shinsei Bank. For building this new system, they have three choices which are big bang approach, incremental approach and path-based approach. The big-bang approach means replacing the current system and processes all at once while the incremental approach path focuses on improving the existing system one piece at a time. But Shinsei didn’t want the risk of the big-bang approach and also didn’t have the time to implement the incremental method. So, they chose the third approach which known as path-based approach which focuses on providing a path for the system to be developed over time. Some of the principles of this approach are variations on old themes while the other principles are totally non-traditional. Shinsei succeeded in implementing and deploying a new enterprise system by using the path-based approach in one year with only cost 55$ Million. This approach was appropriate for Japan’s Shinsei Bank due three reasons; cost saving, great efficiency and reinvented retail banking in Japan.

2-Don’t Align Business and IT Strategies:

General Managers need to be sure that the IT staff understands the business in the organization and this can be done by having the head of IT report to the CEO. Business managers also need to have an understanding of what IT can do by focusing on the foreseeable business objectives, not the existing environment. Managers must build an IT strategy that fits them. The way to do this is to have constant interaction between the business and IT groups about business goals and IT decisions and constraints.

3-Strive for Extreme Simplicity:

Shinsei succeeded by employing the simplest possible technologies. There were three keys to their simpler approach:

Limit the number of standards:

• Standardization of small set of components is critical to a path-based approach.

• Standardizing components allows organizations to devote less time to maintaining quality and more to building new functionality.

• Business managers must have an understanding of technology to appreciate the trade-offs and help avoid the exceptions that can balkanize IT system.

• One of most radical decisions was to eliminate shinsei's mainframe system; the traditional backbone of a bank’s IT and replaces them with Intel-based server.

• Along with selecting a single server platform, Dvivedi and his team chose other standards, such as Dell PCs, Microsoft Windows, the internet, IP phones and standard messaging.

Create simple re-usable solutions:

Dvivedi and his team create an architecture that would allow shinsei to address business issues then break it down into its constituent pieces and would then determine a technology solution for each one.

The solutions are:

• Instilling two internet connections from two different providers that uptime from the network connection.

• Staggered reboot at frequent intervals to solve memory leaks.

• Developed reusable module that able to use from other projects in shinsei.

Apply modularity to clearly specify user interfaces:

• By applied modular architecture that accelerating the speed of development and make it easier to upgrade the technology.

• Modular structure simply replaces one part without affecting the rest.

• Also allowed to change its IT without having to risk upsetting customers.

4-Give Some Power To the People:

Many project fail because of employees resistance to the new system. Shinsei introduced the new system by represent an interface that is similar to the old system, Shinsei was also started a system for feedback and applying requests from customers, employees and business users. Shinsei continually improve systems and processes by having averaged comments around 100 requests per day.

As a conclusion, business MUST focus on building IT systems that can be improved by the time. Adopting “Path-based approach” will provide flexible systems that can change as business demands changed and can shift IT from being a simple platform for existing processes to adopt new complex business opportunities.

Prepared by:(Asma Al-Saikhan -Hailah Al-Majhad-Lamia Al-Horaibi-Sara Al-Qahtani)

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