Getting Down To Business

Solution providers will be closely watching the progress of this seven-year, $5 billion project for a number of reasons. Most notable is the scale and scope of the deal: With 94,000 employees in more than 50 countries and $43 billion in revenue, the transition must remain seamless to the customer and its clients. At the same time, the variable pricing model JPM Chase is striving for will be the ultimate test of IBM's on-demand computing initiative; in fact, JPM Chase will be IBM's largest beta customer of these new capabilities as they are developed.

And all eyes will be on JPM Chase for another key reason--although IGS is the primary contractor for this transformation project, there's plenty of opportunity for additional partners to provide various network and systems-integration services. That includes software implementation and maintenance, applications development and desktop support.

The net of it all: There's no shortage of projects coming out of the company's business units, says Marty Pine, an outsourcing consultant who frequently advises JPM Chase. "They are the biggest target in the world," Pine says. "Everyone and his brother is trying to get a piece of them."

Indeed, JPM Chase already utilizes solution providers and systems integrators for a wide variety of work, says Jim Moreno, the firm's managing director. "We literally have hundreds of third-party contracts in place supporting different elements of IT in the bank," he says. "They range from an individual person coming in to do particular work like break-fix on the desktops to very large contracts."

So where do those additional opportunities lie? Consider the number of business imperatives facing JPM Chase. For example, the new Check 21 law signed by President George W. Bush last fall, which will let banks handle images of checks for settlement and clearing, will require JPM Chase to develop and implement a system to support the management and exchange of images for settlement purposes. Also, a slew of new regulatory mandates--such as the Sarbanes-Oxley Act and the Patriot Act--is causing additional technology pressures on large financial-services firms such as JPM Chase. And, the retail and commercial-banking divisions of JPM Chase are in the midst of a CRM rationalization effort designed to make it possible for business units to look at customers more holistically rather than in silos.

Behind the Scenes
By far, what sets JPM Chase apart as a customer is its huge outsourcing partnership with IGS. "We've done a lot of deals before, but I don't think we've ever done a deal this large and this complex," says Patrick Sweeny, who was general manager of IBM's financial-services sector practice when the RFP was put out.

The transition began last April, when IGS began taking ownership of the data centers and related capital and physical assets. During the course of the year, 4,000 JPM Chase employees were moved over to IGS. Like any major IT transformation project, a transition of that scope can be painful to all parties involved, so it should come as no surprise that IGS and JPM Chase have had their share of disputes. Moreno insists that is to be expected.

"We're relatively early in the process," Moreno says. "We're still going through the learning curve of the implementation and the transition."

Now IGS and JPM Chase are in the early stages of consolidating data centers, upgrading hardware and providing a common global IP infrastructure based on Cisco gear, which will probably take two years to complete; a total of nearly 40 networks will also be consolidated into a common global backbone. IGS has partnered with AT&T and Cable and Wireless, among others, to provide the global wide-area network.

On the data-center side, the key focus this year will be the consolidation of thousands of servers, replacing Unix systems with Linux-based blade servers. Likewise, the mainframes, which drive much of the mission-critical processes, will be upgraded to Linux as well.

Servers running Windows are also candidates to be transitioned to Linux, Sweeny hints. IGS will also consolidate and upgrade the help desks and customer-service facilities with new tools. And systems management capabilities that were once administrator-intensive will be automated, Sweeny says.

In addition, rearchitecting the infrastructure so it supports the business is on the boards, according to Sweeny. IBM will also implement the on-demand toolset, putting in place processes around change management, production control, monitoring, security and "all of the things that are absolutely necessary to execute against an on-demand type model," Sweeny says.

Meanwhile, JPM Chase is paying for the capacity it uses based on CPU hours, gigabits of storage, number of help-desk seats and end users supported, and amount of bandwidth consumed and telecom lines used. "We pay essentially in an on-demand type of model," he says. "The mechanics behind that, how the data is collected, how the data is presented, is going to evolve over time."

For now, Moreno and Sweeny are focused on getting from here to there. That means working with a variety of partners to bring together all the disparate data centers into a common infrastructure. "This is the execution year," Sweeny says.