When Pradip Sitaram became CIO of US-based non-profit social housing concern Enterprise Community Partners last year, he inherited an IT estate that needed to be entirely modernised – from the desktop to the data centre.
The organisation’s application stack was in an especially bad way, Sitaram recalls. “One of the first things I did was an assessment of all the applications we had,” he says. “We discovered over 80 applications and databases, which is a lot for a company with 550 employees.
“Some of the systems were tightly integrated, so changing one of them would break all the applications it was connected to,” he says. “But others weren’t integrated at all, which meant someone was entering the data by hand. That meant we had multiple versions of the truth.”
Just as Sitaram joined, the organisation was preparing to embark on an integration project that he felt was going to be expensive, risky and drawn-out. He therefore instigated an alternative, cloud-based project, that took one tenth of the investment and one tenth of the time.
Sitaram has used the success of that project, and the money that he saved, to justify a four-year, $40 million IT transformation strategy, with cloud computing as its centrepiece. The plan is to replace every system with a cloud-based alternative “unless there is a very good reason not to”, he says.
The transformational strategy has called for renewed focus on integration and it has accelerated the pace of software development, Sitaram says. It has also brought a new organisational culture to the IT department that not everyone could adjust to.
A huge win
Enterprise Community Partners funds affordable housing projects by connecting property developers to investors, who receive tax breaks in return for their investment. It operates 1,600 properties around the US, each of which house multiple families.
“Because our properties are funded through tax credits, our contractual obligations are very stringent and our reporting requirements are complex,” explains Sitaram. “Each property sends us weekly, monthly and quarterly reports, so we have thousands of reports flowing in every week.”
Historically, each of these reports would be entered into four separate systems, including the ERP database and the tax analysis and forecasting system. The company had identified this time-consuming process as ripe for modernisation before Sitaram joined, and was evaluating a proposal to implement an integration platform based on Microsoft’s BizTalk software.
“The proposal was for $800,000 and nine months,” Sitaram recalls. “And that was just for phase one, which implied that phases two and three would soon follow.”
This struck Sitaram as excessive, and as the new CIO he did not want to be responsible for a project that went over its budget. “To be honest, it scared me to death.”
Sitaram therefore suggested that the organisation’s lead developer evaluate alternative data integration platforms that could be deployed in the cloud, including Pervasive, Adeptia, CastIron and Boomi, an ‘integration platform as a service’ start-up that was acquired by Dell last year.
“Long story short, he said, ‘I like this Boomi thing, I’d like to give it a shot,’” Sitaram says. “He was able to train himself with Boomi and build the necessary integration, all in about four weeks. And because it was cloud-based, my initial cost exposure was just $1,500. If I had gone with the alternative, I would have spent hundreds of thousands of dollars on people and licences just to get started. This was a huge win for us.”
Even so, in terms of Enterprise’s IT issues, it was just the tip of the iceberg. “The overwhelming sentiment towards our IT systems was that they were in the way, not there to help,” Sitaram says. “And because they were in the way, people didn’t want to use them, so they were not being used consistently.”
Sitaram decided that drastic change was required: “I looked at the rest of our systems and realised that we needed to leverage the cloud in a big way.”
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“When I looked at the systems we had, 99% of them had been built internally,” he explains. “I wanted to change the model so that we would buy or rent most of our software. Anything that is unique to us, like our financial modelling applications, we would build ourselves because that’s our business. Everything else will go into the cloud, unless we have a really good reason not to.”
Sitaram drafted a four-year, $40 million strategy to rebuild the organisation’s IT infrastructure around a cloud computing model. He successfully pitched it to the board, pointing to the prior success of the Boomi project as proof of the concept.
At the core of the strategy lies Force.com, the platform-as-a-service offering from Salesforce.com. “I wanted there to be one centralised business operations database,” explains Sitaram. “If we care enough about a business entity to manage, track and report on it, then it should live in one place, not multiple places, because that’s when you get multiple versions of the truth.”
Having used Force.com at previous organisations, Sitaram chose it as the basis of this business operations database. “Force.com basically gives you a database with a user interface. We’re going to use that to replace dozens and dozens of applications that we have built in-house.”
The conversion of applications begins in earnest next year. Sitaram says it is the business, not the IT department, that is driving the order in which applications are migrated, via a steering committee comprising various executives including the CFO. “They’ve decided that our focus for next year should be any applications that support [property] asset management, which they’ve identified as the biggest cost drain on our organisation.”
This gradual roll-out, and the fact that certain applications will never move to the cloud, means that Enterprise will operate a hybrid environment of both cloud and in-house applications. For this reason, Sitaram says, it was essential that integration was not an afterthought.
“There is a huge myth out there that if you’re going into the cloud, you don’t have to worry about integration because things in the cloud are integrated anyway,” he says. “That couldn’t be further from the truth. If you’re moving to the cloud incrementally, you need to make sure you have a sound integration strategy as early as possible.”
Sitaram’s approach has been to build an internally hosted ‘operational data store’, or ODS. “We’ve spent the bulk of this year eliminating the interdependencies between applications, by integrating them all into the ODS. It’s a layer of abstraction that allows us to swap out systems that would otherwise have been directly integrated.”
The organisation uses Boomi to integrate both cloud-based and in-house applications with the ODS. A recent release of the software introduced business rules functionality, which Enterprise uses to extract data from the large Excel spreadsheets that many of its employees rely on.
It is still early days, but already the shift to cloud computing has had an impact on the way that Enterprise’s IT department operates, Sitaram claims.
Because Force.com allows software developers to build applications quickly by removing the need to manage and configure infrastructure, he says, they can work more collaboratively with their peers in the business. “It allows you to have a conversation with your users about how they work and what information they need to do the job, and then build an application in a couple of hours to see if you understood what they said.”
But the transition has not been painless. “It’s a different culture; we’re moving at 1,000 miles an hour now,” Sitaram says. “When I decided on the strategy, I said to the team, this isn’t going to be for everyone. I looked them each in the eye and asked whether they were up to the job.”
The outcome? “I’ve changed a lot of my IT staff, including all of my direct reports,” he says. “They just couldn’t take the new way of working.”
Sitaram believes that cloud computing is accelerating a transformation that affects anyone working in business IT. “I remember being a developer 25 years ago; I would happily sit in a cubicle writing code without ever speaking to a user,” he says. “Now, I tell developers, we are a cost centre for the company. Our job is to make people’s lives easier in the company. If you cannot empathise and communicate with your users, you are going to be hamstrung.”