Merrill Lynch Case Study Questions
1. Merrill Lynch needed to update its IT infrastructure in order to continuing being competitive in the market. Merrill Lynch was operating on an IBM mainframe that ran about 23,000 programs in order to process 80 million daily online transactions. They were not wed based so their actual clients did not easy have access to their portfolios or tools to work with them. In order to stay competitive Merrill Lynch had to figure out how to make the most out of its mainframe but at the same time incorporate internet access to client profiles.
3. Jim Crew who is the head of database infrastructure at Merrill Lynch approached web services development in an unconventional way. At first he thought about purchasing a service-oriented architecture (SOA) which on the surface seemed much easily than building their own since they could rely on the vendor’s knowledge of the system. However Crew soon realized that the system was not compatible with the programmers at Merrill Lynch and he did not want them to have to learn new tools since it could potentially take a year and cost the company about $80 million to complete the transition. Crew then decided to copy the mainframe into Oracle, Sybase or SQL Server database which were compatible with server-based application but caused errors having to do with space issues. Crew finally decided to use XML tags which are used to describe data. XML worked and was able to effectively connect the mainframe to the internet. The programming team was challenged to cut costs more by adhering to criteria that would not allow the new mainframe/internet system to become complex. The programmers used Assembly Language which was used in the 1950’ and rarely used today to reduce errors in translation. I think this new system gave Merrill Lynch the advantage of cutting costs where they would have otherwise been spent, creating a whole new system that was more user friendly to the Merrill Lynch programming team and creating a competitive advantage and something to be desired by other companies in the same market. The disadvantages were that there were a couple of trials and errors that could have been avoided if they would have just bought an SOA to begin with. Overall I feel that the decision that was made was the correct one because it worked best with the company and had the least clashing qualities in comparison to the other options that were available.
4. I think it was both a good and bad idea for Merrill Lynch to sell off its successful technology initiatives. It was good because they were able to make a profit from the sale of the technology. On the other hand it was a bad decision because it may have hindered their competitive edge. The technology also may be selling for much more money then Merrill Lynch originally sold for in which case they should have held onto the technology, done more research on how much it was really worth, and then bargained for a larger selling cost.
1. Merrill Lynch needed to update its IT infrastructure in order to continuing being competitive in the market. Merrill Lynch was operating on an IBM mainframe that ran about 23,000 programs in order to process 80 million daily online transactions. They were not wed based so their actual clients did not easy have access to their portfolios or tools to work with them. In order to stay competitive Merrill Lynch had to figure out how to make the most out of its mainframe but at the same time incorporate internet access to client profiles.
3. Jim Crew who is the head of database infrastructure at Merrill Lynch approached web services development in an unconventional way. At first he thought about purchasing a service-oriented architecture (SOA) which on the surface seemed much easily than building their own since they could rely on the vendor’s knowledge of the system. However Crew soon realized that the system was not compatible with the programmers at Merrill Lynch and he did not want them to have to learn new tools since it could potentially take a year and cost the company about $80 million to complete the transition. Crew then decided to copy the mainframe into Oracle, Sybase or SQL Server database which were compatible with server-based application but caused errors having to do with space issues. Crew finally decided to use XML tags which are used to describe data. XML worked and was able to effectively connect the mainframe to the internet. The programming team was challenged to cut costs more by adhering to criteria that would not allow the new mainframe/internet system to become complex. The programmers used Assembly Language which was used in the 1950’ and rarely used today to reduce errors in translation. I think this new system gave Merrill Lynch the advantage of cutting costs where they would have otherwise been spent, creating a whole new system that was more user friendly to the Merrill Lynch programming team and creating a competitive advantage and something to be desired by other companies in the same market. The disadvantages were that there were a couple of trials and errors that could have been avoided if they would have just bought an SOA to begin with. Overall I feel that the decision that was made was the correct one because it worked best with the company and had the least clashing qualities in comparison to the other options that were available.
4. I think it was both a good and bad idea for Merrill Lynch to sell off its successful technology initiatives. It was good because they were able to make a profit from the sale of the technology. On the other hand it was a bad decision because it may have hindered their competitive edge. The technology also may be selling for much more money then Merrill Lynch originally sold for in which case they should have held onto the technology, done more research on how much it was really worth, and then bargained for a larger selling cost.
Don't you think, though, that information techonology is changing so fast that Merrill Lynch's system will be obsolete soon and so it is a good idea to sell now since they have a good name and their system is successful? Then they can take those profits and invest them in another system to keep up with the changing times.
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