When Peter Yarrington was recruited as CIO for Australian brokerage firm JBWere, his new employers made no bones about was expected of him: he was being hired to totally rethink the 160-year-old company's use of IT. At that time, JBWere was stuck in an IT time warp; the company's IT operations relied on an ageing IBM mainframe purchased in the early 80s that was running even older broking applications.
What JBWere needed was someone who could build an IT organisation commensurate with the company's status as one of Australia's largest investment companies. Founded in Melbourne in 1840, JBWere is the oldest privately-owned broker in the country and now maintains offices throughout Australia and New Zealand, as well as New York, Tokyo, Singapore and Frankfurt. The company's main business is providing equity markets advice and underwriting for big name clients like Telstra, Rio Tinto, National Australia Bank and BHP, and it routinely finances transactions that involve millions of dollars - or billions, as in the case of Telstra's two (thus far) privatisation offers.
Since the early 80s JBWere had enjoyed nearly two decades of relatively stable investment and growth in IT. But by the mid 90s, Yarrington says, it was clear that JBWere needed to rethink its IT investment and reassess the role technology played in the broad organisation. Despite the company's successful track record, globalisation posed enormous challenges for JBWere. "Organisations in the US want to be able to push a button in New York and place a huge transaction on the ASX, and they want to be able to execute it and have it reported back to them in five seconds. That's what today's customers expect," he says.
And while JBWere's size and stature might be impressive by Australian standards, the fact is the company competes with much larger broking organisations - the Schwabs, Merrill Lynchs and JP Morgans of the world - that spend millions on their IT budgets.
"We can't even think about competing with those sorts of spends," Yarrington says, "so we have to target our spend on key aspects of the business."
Plotting the Course
Yarrington says that at the time of his arrival JBWere was doing a fine job of serving its customers. The internal IT organisation had maintained a stable environment for over 15 years, and the corporate mainframe allowed the company to conduct transactions across the globe. There was just one problem: the heads of JBWere felt they were missing out on crucial business opportunities offered by new technologies arriving on the scene, not to mention the business challenges presented by the uptake of the Internet.
"The IT organisation was incredibly good at delivery, despite the fact that they didn't have a whole lot of processes in place. The focus was on keeping everything running," Yarrington says. "But when you talked to people from the business, they talked about innovation, they talked about new product, they talked about entering new marketplaces and doing things differently. There was a general recognition that the future of the organisation was inextricably bound up in technology." That future, and more specifically Yarrington's plans for it, is best summed up in three words: people, process and architecture. These were the three variables which Yarrington used to plot the course for JBWere's IT transformation.
"The challenge we faced was that the company itself needed to assess what a professional, modern IT organisation should be," he says. "We had to plot what the future was going to look like. What kind of financial services architecture suits a broker of this size in Australia? What are the processes used to run the IT organisation? What kind of people do you need, and what kind of skills must they have and what capabilities must they be provided with?" These were the questions that Yarrington had to answer if he was going to haul JBWere out of the mainframe era.
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