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WHAT’S NEXT FOR ORACLE’S CLOUD STRATEGY?

– Richard Phillips

 

In the rapidly evolving world of cloud technology, the question of which service to adopt is generally seen as a choice between Microsoft Azure and AWS with Google Cloud computing services bringing up the rear and IBM and Oracle some way behind [1].  However, for large-scale online transaction processing, Oracle still leads the way as the world’s most popular database management system [2] and Oracle’s cloud based offering deserves serious attention.

 

Richard Phillips

If we consider a typical enterprise there is likely to be a sizable existing investment in Oracle database technology.  When moving services to the cloud, however, AWS or Azure have quickly become the go-to providers.  Substantial investment in Oracle is effectively written off in favour of spend on new capability.  To combat this rush to AWS and Azure, Oracle launched their Autonomous Database in 2018 but it’s still not seen as the first choice for many enterprises; even those with large existing Oracle investment.  The reasoning behind this may be a perception that Oracle is expensive, complicated and arduous to deal with.  Oracle’s introduction of its autonomous database on its own cloud is an attempt to address this perception and has gone quite some way to bringing a challenger to AWS and Azure.

 

The Autonomous Database quite simply  runs itself without downtime: it does all the administration, optimisation, patching, memory management and, to some extent, scaling, automatically.  This is an incredibly significant move for cloud providers. Cloud databases have evolved significantly but, for the most part, you still need technical teams to administer and keep them running at their optimal level.  Microsoft has managed some of this with their Azure SQL database but elements such as optimisation of indexes are still down to the administrator and the database is not as full featured as Redshift or Oracle.  Oracle has removed the burden completely by using AI to supplement their in-house teams keeping the system running as part of the service.  As an example of how much they have simplified things, the admin manual for standard Oracle 19c database runs to a total of 1690 pages (about the same as the first two Game of Thrones books) and that’s just the admin section – this is almost entirely taken care of in the autonomous version of the same database. With most of the admin taken away, the team of expensive Oracle DBAs are free to do something else (maybe retrain in Amazon Redshift which still has a high demand for admins).

 

The next thing to consider is pricing.  As is the case for most cloud database platforms the price is based around compute and storage with discounts based on committed usage.  Following this model the price comes out around 10% more expensive than the equivalent service using AWS.  But if we then factor in the lower administrative burden, the total cost of ownership comes out strongly in favour of Oracle.  We need to remember, however, that many enterprises have already made a strong financial commitment to their on premise Oracle licences and it is here that the biggest advantage becomes clear.  The licences are fully portable to the autonomous version and if you follow this “bring your own” licence model the cost for the service is going to be around 1/3 of the cost of an equivalent AWS.

 

As far as performance goes the database wins hands down in the published benchmark reports against AWS Redshift and even the same version of Oracle running within the AWS RDS platform.  Performance is between 4 and 14 times as fast than the equivalent workloads [3].  If however more power is needed then scaling the database is done online with the ability to auto scale up and down with zero downtime.  This extra compute can be used to deploy “just in time” extra resource when needed automatically and scale back again when not to save costs.  Unlike other platforms there is no admin overhead as the system manages scaling based on the query demand and can automatically scale up to three times the original compute levels.  Importantly you only pay when the extra compute is being used.

 

The final point to make is around availability.  We normally talk here of 99.9% or 99.95% guaranteed availability, but Oracle have gone quite a bit further here offering 99.995% availability.  The most important part of this guarantee is what it means for updates.  When standard maintenance is your responsibility, then the downtime associated with this is not included in the availability – you must take the hit yourself.  For Redshift on AWS you need to schedule in a 30 minute maintenance window every week.  With SQL Azure there is no window so your connection will drop at the time of update and you just need to make sure your code allows for this.  As the admin is included in the Oracle offering, the uptime includes all the updates and they happen automatically with no outage.  For mission critical services this may well be the most important factor.

 

The database is of course just one part of your cloud strategy and it’s quite widely accepted that the rest of Oracle’s cloud offering is still evolving.  For now an all-in approach with Oracle is probably not a sensible approach but many would argue that a multi cloud approach spanning more than one provider is a more sensible approach for many enterprises.  The risk is spread and you retain leverage over the providers when it comes to renegotiation of contracts.  As it stands, for transactional and analytical needs the Oracle Autonomous Database should almost certainly form a large part of any serious multi cloud strategy.

[1] Source RightScale 2019 State of the cloud report from Flexera

[2] Source Gartner June 2019

[3] Source Oracle OpenWorld tests October 2018

 

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WITHOUT C-SUITE COLLABORATION DIGITAL TRANSFORMATION IS UNLIKELY TO BE SUCCESSFUL WITHIN FINANCIAL SERVICES

By Nick Gold, founder and Chief Executive of Speaker’s Corner

 

A path to digital transformation

Mapping a clear path is essential for companies undergoing digital transformation. Responsibility for driving digital transformation across the enterprise lies with the C-suite. The CEO, chief marketing officer (CMO), chief human resources officer (CHRO) and chief operations officer (COO), among others, must work together to make the transformation happen. However, this can be difficult to achieve as certain members of the C-Suite are more proficient with technology than others. This article will look at how to overcome resistance/challenges at a senior level to any digital transformation strategy.

 

Working and evolving alongside the digital revolution

The fourth industrial revolution, where technology meets disruption via the Internet of Things, robotics, virtual reality and artificial intelligence, are fundamentally changing the way we live and work.  This journey is taking us further into a world which we are only starting to understand.

We can see this most clearly in the finance sector, where at every stage of this revolution an area of this industry has been targeted and disrupted.   As leading thinkers and exponents from the finance sector have shared their stories through their speeches, explaining the current impact and forecasting what will happen next,  it is clear that for both the most established companies alongside the new wave of digitally lead fintech companies, change is part of the regular business cycle.

But having the processes and procedure in place to encourage change and be at the forefront of the digital revolution will be critical to the continued survival, let alone success, of companies within this sector.

As such, companies have realised that their processes, their products and even the reason for their entire existence needs to change in order to survive this revolution. However, the C-suite are struggling to adapt because this isn’t a clearly defined problem and there isn’t a historical precedent to follow.

 

How the finance sector deals with change

In days of old, a business problem would have been identified and a decision would be made to implement a technological solution.  With the recommendation approved, the C suite, usually the Chief Technology Officer, would be tasked to deliver the project.  This suited all the C suite members as it meant that the expertise of each member of the executive was clear and there was a clear delineation between their roles and responsibilities.

What fascinates me, especially in the finance sector, is for those established companies who historically have dealt with change (especially in the digital or technology space) by acquiring companies to utilise their technological systems and processes, this ‘traditional’ process for dealing with a changing marketplace is no longer as straight forward as it used to be.

Why is this?  As I’m sure the reader is aware, the new fintech companies which disrupted the market, with their digital led strategy and processes, need to retain their cultural DNA to keep innovating and growing revenue.

But this doesn’t sit comfortable with the traditional model of acquiring a company and then integrating them into the processes of the buying company.  The strengths of the new fintech company are being put at risk by this absorption and integration such that the company is potentially putting at risk the positive benefits for the acquisition.

The question is then posed for the acquirer, how do you integrate the new processes with all their benefits into the existing processes in an environment where the incumbents will be treating both the new company, new processes and new technological with a  level of disdain and certainly a high level of suspicion, they are after all companies that have been leading the finance sector for many years

 

Building a strategic direction lies with the C-Suite

That mission sits squarely at the feet of the C Suite.  Their role is to provide strategic direction for the company, understand the opportunities for the business and shape the vision and direction in order for the wonderful people who work for that company to deliver in their specific areas and for these people to see the challenge of change as an opportunity to develop and grow.

This moves the discussion at a C Suite level away from a technological based discussion, away from a place where there might be reticence due to an individual’s relationship with technology to either be part of the discussion or even worse, not commit to their viewpoints as they defer to other who they view as experts.  It moves the transformation away from digital to strategic.

But digital transformation is nothing to do with the build and delivery of the systems, it is nothing to do with the evolution of the business processes to work with the new transformed business, but it is everything to do with the strategic path that the company needs to take in this new era.

The fourth industrial revolution, where change is happening at an ever increasing pace, requires the C Suite to have a clear understanding of critical milestones from a business perspective, with diversity of business views based on expertise and experience, to ensure large scale digital transformation programs stay on track to deliver the requirements for the survival, growth and success of their business.

 

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DRIVING DIGITAL: HOW BUILDING SOCIETIES CAN THRIVE IN A NEW DECADE

Simon Healy, Industry Director Financial Services EMEA, Unisys

Building societies have been a feature of the UK’s financial landscape since the late 18th century, and these well-trusted institutions have played a key role in their local communities ever since – particularly when it comes to savings and mortgages. But recent years have presented serious challenges, and not just because of increased competition.

During the 2008 financial crisis, the sector ran into difficulties – often as the result of what proved to be ill-advised business diversification, like venturing into the sub-prime mortgage market, or corporate lending. In 2019, only 43 building societies remained active – and those who have survived have rightfully focused on consolidation, ensuring continuity of service for their valued customers.

Yet, as we enter a new decade, change is in the air. Most building societies are now in a much stronger position, contributing to a general sense that the time is right to start investing in the future. And – as you might imagine, given customer expectations and the focus of modern challenger banks – that future demands a highly digital, personalised approach.

Unfortunately, many building societies still have a reliance on manual processes, and have inherent constraints that limit their ability to innovate. This means that developing and distributing new digital capabilities can be challenging, with many feeling unsure of where to start.

So, what sort of digital offering should building societies spend their time developing – and how should they approach the process?

 

Belief in building societies: understanding the desire for digital

You only have to look at the rapid uptake of app-based banks like Monzo to understand that digital is desirable. But people aren’t seeking cutting-edge innovation in and of itself, which is good news for building societies. Instead, as Unisys’ recent research shows, customers are primarily motivated by fairly straightforward capabilities.

Our respondents claimed that convenience is one of the key drivers for choosing an account. So, in today’s digital world, it is perhaps no surprise that half say that online opening is important when they’re thinking about a new savings account, and 43% want online account management. A third would like access to a mobile app, and 34% are seeking omni-channel service, so that the service they receive in branch or on the phone is seamlessly integrated with their mobile, tablet or computer experience.

Nearly two in three customers feel that building societies should leverage the opportunities presented by the new Open Banking framework, with a third believing this would positively impact their personal finance management. And although not a traditional market for building societies, 86% of under 35s would be interested in a simple, intuitive digital current account from them.

Interestingly, and perhaps counter-intuitively, Unisys’ research shows that consumers are nearly seven times more likely to open a digital account with a building society than a digital bank, showing there is plenty of appetite – if only building societies are ready to take advantage.

Knowing this is one thing, of course, and building these capabilities in an environment that has traditionally relied on manual processes is quite another. Because while customer appetite for digital is high, delivering on it requires careful planning, not to mention a fundamental shift in mind-set.

 

Delivering digital

Building societies should start by forensically understanding and assessing the actual wants and needs of their target customers. As we’ve already seen, the requirements of most are quite straightforward at a high level – so by taking the time to thoroughly understand digital drivers, building societies can segment customers more effectively, and gain a focused understanding of the features and services most valuable to them.

Once this has been established, they should be prepared to move in small, incremental steps. This might seem counterintuitive for a digital transformation project, especially since innovation teams are usually under pressure to show the ROI of their efforts. But moving too quickly can lead organisations to build capabilities that customers don’t actually want, squandering capital and resources.

A few years ago, after all, it was widely expected that tablets would be the primary method of accessing online banking. Now, it’s generally accepted that mobile-first is the strategy to focus on – and those who invested heavily in an experience optimised for tablet may feel they’ve wasted their resources somewhat. By moving incrementally, building societies will have the freedom to flex and pivot as market shifts like this occur.

 

A top-down change

This phased approach will also allow building societies to drive innovation across the entire organisation, rather than focusing on one particular area – like customer experience. Given the choice, most would prioritise a customer-facing app over investing in the employee experience. But while this works as a means of getting to market quickly, any digital innovation focused solely on the customer experience will soon fall down if it’s relying on paper-based, clunky or manual processes behind the scenes.

This is also tied to the need for a wider cultural mind-set shift, which necessitates buy-in from the top down. Senior stakeholders play an important role in influencing cultural change and moving transformation forward. And just as importantly, they can also overcome financial objections. The reality is, traditional revenue models aren’t particularly helpful for analysing the value of digital investment. An engaged stakeholder can ensure that the project isn’t derailed by objections on this front.

Innovation is by no means an easy process for building societies. But as we head into a new decade, the need for developing digital capabilities is clear. Consumers are keen to continue supporting their local building societies – but to build on this sentiment, organisations must take the time and the resource to build out their digital offering. If they can do so successfully, they’ll be well placed to thrive on the UK high street for many years to come.

 

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