Ameriprise Invests in SOA for the Long Term

Ameriprise Financial Inc. faced a classic integration problem. The nation’s fourth-largest financial advisory firm, with $7.5 billion in 2005 revenues—until recently a unit of American Express Co.—grew out of a series of acquisitions dating back to 1984 and had evolved a collection of IT systems supporting various financial products. What’s more, the firm had begun selling products, such as mutual funds, created by other companies.

This lack of cohesion complicated activities such as account administration, where the systems worked well in isolation but made it difficult for customers to move funds between accounts. With unified systems, the company could potentially get customers to buy into numerous financial products such as annuities, mutual funds and certificates of deposit. This need for integration started Ameriprise along the path to a service-oriented architecture—but it didn’t rush in. Ameriprise took its first step toward SOA in 1999, and the process is ongoing.

In fact, says David Nichols, SOA practice leader at Accenture, lots of companies are lured to SOA by the promise lower software development cost and faster application deployment, only to be disappointed.

SOA is a computing architecture that let companies make applications and computing resources, such as databases, available as “services” which can be called upon when necessary. SOA leverages standard mechanisms, such as eXtensible markup language (XML), to simplify the process of exchanging data. It’s not, Nichols says, a software solution you buy off the shelf, but rather a multiyear, organizational shift that requires discipline on the part of both the business and information technology organizations. “People need to be pragmatic about this,” he says.

Ameriprise was. “We began with the problem of data integration,” recalls Tracy LeGrand, chief architect and vice president of technology, strategy and architecture at Ameriprise. The company started off with IBM Corp.’s MQSeries Integrator, a middleware product, to provide the basis for a “hub-and-spoke” implementation, where different applications, the spokes, attach to a central hub. When an application requests data from another application, the hub transforms the data into a format the requesting application understands.

LeGrand describes the set-up as an early version of an enterprise service bus, or ESB, which some IT executives now view as a foundation for SOA. It provides much the same functionality as the hub-and-spoke architecture, but uses open Web services protocols as the integration mechanism instead of proprietary technology. In Web services, Simple Object Access Protocol (SOAP), based on XML, lets applications communicate over the protocol that Web servers use.

While the hub-and-spoke method helped Ameriprise integrate its business lines, the company sought to move more fully toward the services approach. In 2000, after considering several companies, Ameriprise enlisted IBM for the push from its data-integration focus to services. MQSeries Integrator, now recast by IBM as WebSphere MQ and WebSphere Business Integration, provide the foundation for a standards-based enterprise service bus. The rebranded WebSphere products support SOAP.

With the standards-supporting bus in place, Ameriprise turned its attention to identifying key business services. The company’s aim: to improve the customer experience, support its financial advisors, and promote reusable services. Using IBM’s Rational software development product line, which provides tools for building services, Ameriprise has developed multiple services for three areas: customer management, asset management, and money movement, which involves the movement of funds between financial products, funds and accounts.

Over time, Ameriprise has come to organize its services into three categories: enterprise reuse, shared reuse, and specialized. When developers plan a new project, they consult a registry of services available for reuse. Enterprise reuse services, such as the customer management service, are used across the company. Shared reuse services operate at the line-of-business level, such as a service shared throughout Ameriprise’s brokerage business. Specialized services are not shared, but are still built using the SOA approach.

LeGrand’s key takeaway from his experience? SOA represents a long-term, strategic commitment. “For us and for most companies it’s a journey,” he says. “Few can afford to take a scorched-earth approach: starting over and service-orienting their architecture from scratch.”

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