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Some companies take a different tack, capitalizing relentlessly on an IT strategy that can't help but deliver business value. Such has been the approach of Avis Budget Group (formerly Cendant Car Rental Group), which operates the Avis and Budget car rental brands as well as Budget Truck Rental. The company relies on a culture of technological opportunism that longtime vice president of technology John Turato has been busily leveraging to further aid the business.
Chief among its IT legacies was a strategic commitment to building a robust service-oriented architecture that would let Avis Budget create a library of business functionalities to be used over and again. That, in turn, is extending the life of its legacy mainframe architecture by allowing functionality to be added on the fly rather than requiring time-consuming coding.
Turato believes Avis Budget's SOA represents the essence of IT optimization-- it lets the company extract the most value from its IT assets with the least investment. But what separates a company's SOA from the pack, Turato says, is that it flows from the business processes that will benefit from it. "Businesses are starting to realize they have to work not only on service architecture and technical architecture, but also business architecture," Turato says.
In the case of Avis Budget, this means that when evolving business needs demand a new service, Turato's team builds that service with the knowledge that if one business process needs it, others will follow, or even add to it. Think of it as a Lego set--a standardized toolkit of pieces that can be put together in countless ways.
Avis Budget, for instance, uses a customer service called e-receipts, which lets customers receive rental car receipts via e-mail--no fumbling with paper receipts while they're on the run. To make this possible, Turato's staff built a notification service that triggers the creation of an e-mail when a given process occurs. Other apps, such as the company's fleet management and insurance replacement systems, now use this notification service as well, and when one application needed to generate automated faxes, the IT staff rolled that capability into the service, making it generally available. Things worked similarly when another app needed to send automatic text messages to mobile phones.
IT's service architecture group has established a services governance team to decide on additions to the SOA, with the director of service architecture overseeing the process and members of the application development team participating in decision-making. (Eventually, Turato plans to bring business leaders into the process.)
The team scrutinizes each proposed service before approving or disapproving it. The last thing Turato wants is a library filled with services that won't be used. "A Swiss Army Knife is not a good solution," he says. The governance team also determines whether a proposed service should stand on its own or be added to an existing service, as was the case with the fax and text message notification services.
Granted, Turato and his staff have focused on low-hanging fruit thus far, serviceenabling relatively simple business functions. Things figure to get a lot more complex when the company reevaluates its core mainframe reservation system, Wizard. The system is tightly wound, so determining how to partition it into services will pose a huge challenge.
Likewise, when it comes to re-architecting reservation and rental processing, rate shopping, fleet operations and the like, the application development and architecture teams will face some tough choices.
In the end, the factors that will determine when and where services make sense will be the same--such as a service's expected degree of re-use, or whether it's too granular to deliver sufficient business value. "It's like Goldilocks," Turato says. "This is too hot, and this is just right."
IT execs agree that the key to effective IT optimization is that it meets business requirements rather than forcing the business to adapt to it.
In almost any large company, there's a long history of impressive IT projects that were completed in a vacuum. They may have originated as smart, innovative and potentially valuable. But if they don't solve an actual business problem, they're little more than novelties.
"You have to start with business process optimization," says Alaska Airlines' Reeder. "If you just look at it as IT optimization, you'll end up with nothing more than automation."
And that, as any CIO will tell you, is a one-way ticket to business obscurity. Not to mention the unemployment line.