Best Practices in System and Channel Integration

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CUES Web Seminar December 7, 2004

• Best Practices in System and Channel Integration
• Presented by
• Carl Faulkner
• Steve Williams
• Principals
• Cornerstone Advisors

Cornerstone Advisors, Inc. 4725 N. Scottsdale
Road, Suite 250 Scottsdale, AZ 85251 Phone
480-423-2030 Fax [phone] Web site
www.crnrstone.com E-mail cfaulkner_at_crnrstone.com
swilliams_at_crnrstone.com
Cornerstone Advisors provides best practices,
strategy and technology consulting services to
financial institutions nationwide.
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What is Middleware?

• A set of computing resources that facilitates the
  exchange of information (messages or data) and
  services (transactions) between two or more
  disparate programs running on one or more
  computers
• In todays terminology, middleware is always
  about messaging capabilities, referred to as MOM
  (message oriented middleware)

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A MOM Analogy
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Asynchronous Messaging

• Messaging architecture has at least three
  components
• A computer or program that sends a message
• A computer or program that receives the message
• A message broker (middleware, or the rock) that
  temporarily stores, then routes the message

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The Messaging Process

• The sending program gets the attention of the
  broker and requests to send a message
• The broker responds positively to the request and
  the message is sent and stored by the broker
• The broker examines the message and determines
  where it is to be sent
• The broker gets the attention of the destination
  computer and requests permission to send the
  message
• The destination computer responds positively to
  the request and the broker sends the message

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Roles of the Broker

• Provide a common place for multiple programs to
  communicate asynchronously with other programs
• Provide specific connectors to interact with
  unique APIs
• May reformat a message from one specific
  messaging protocol to another
• Routes messages to the appropriate requested
  destinations
• Does not interact with the message content, i.e.,
  only the messenger

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What Is an API?

• An Application Programming Interface is a set of
  rules for exchanging information and/or services
  with another computer program
• The rules are specific programming guidelines and
  syntax that would be used when writing a program
  to extract information or perform transactions
  from another system, such as a loan servicing
  system
• A typical use of an API is to interface a loan
  document system with a loan servicing system so
  that information contained on a servicing system
  could be populated from the document system, thus
  eliminating the need to enter the information
  multiple times

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What is XML?

• Extensible Markup Language is a set of rules,
  syntax and conventions for defining processes,
  data and presentation formats
• XML is used to define how information can be
  stored, presented and manipulated
• XML is used to define the XXX financial data
  standards that include what data are exchanged,
  size and format of the information, reference
  names and how to format the information

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Putting the Pieces Together
System A
System B
Connector
API
Middleware
Connector
API
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Middleware Vendors

• Tibco
• Sonic (Progress)
• IBM
• Microsoft
• JMS (Java)
• Talarian (purchased by Tibco)
• Multiple open software products

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What is a Data Warehouse?

• A repository where information from multiple
  sources can be stored
• Typically contains point in time information as
  well as transactions, i.e., current loan balances
  and the transactions that affect the loan balance
• May be operational, i.e., actively used by an
  application system, or may be static and contain
  information that is used for reporting purposes
• A data warehouse that contains point in time,
  audited summary information about a specific
  topic is called a Data Mart

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Why Deploy Middleware?

• Simplifies a complex interface structure, instead
  of links between each system, each component only
  communicates with the middleware broker
• Facilitates ability to quickly interface two
  disparate systems
• Simplifies implementation of Web services that
  need information or services from legacy systems

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Do I still need middleware if my core system
provides it?

• If the bulk of your ancillary systems are
  provided by your core vendor, you may not need
  additional middleware products
• If the core-provided middleware product supports
  XML, it can probably be used to communicate with
  ancillary systems that also support XML
• If you have core products from multiple vendors,
  a third party middleware product will likely be
  required

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What Happens When Its All XML?
In this case, the middleware is only routing
messages
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And Now, the Pitfalls

• IT becomes enamored with the technology and
  overs the project - they overspend,
  overpromise, and the project never delivers any
  meaningful results
• Projects without a solid business case consume
  valuable resources
• Data sources are not validated and cause general
  distrust of the information provided
• Projects scope is too large for the skill set of
  the team members

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Best Practice ProfileCommunity America

• Background
• 1.4 billion credit union in Kansas City area
• Began middleware evaluation processes in late
  2002
• Credit union has chosen a best of breed system
  strategy and saw opportunity for middleware
  during a mandatory migration on the CUs Fiserv
  Summit core systems platform
• Products utilized
• Microsoft BizTalk
• Staff support
• One enterprise architect w/BizTalk experience
• Person also has Web services, XML, XSLT
  experience

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Best Practice ProfileCommunity America

• Business benefits
• Reusability of application interfaces
• e.g., integrated Corillian into Summit in less
  than six weeks and custom IVR interface for
  mortgage system in two weeks
• Advice for credit unions
• Determine if middleware makes sense for your
  credit union strategy (i.e., business requires
  the use of third-party applications and cant be
  provided from a single vendor)
• Conduct thorough due diligence vendors have
  different definitions and understanding of
  middleware

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Best Practice ProfileCommunity America

• Data warehouse
• Built own data warehouse utilizing
• Database Microsoft SQL
• ETL processes Microsoft DTS
• Data Marts Microsoft Analysis Services
• Change Management Embarcaderos Change Manager
• Data Modeling Embarcaderos ER/Studio
• BI/Reporting Microsoft Reporting Services
• Community America was already a strong user of
  Crystal Reports and MS Access
• Built an extensive enterprise data model tying
  together data from a wide variety of systems
• Focused on financial reporting in the past year
  (ALM, budget, audit)
• Sales uses warehouse to analyze member
  transactions overlaid with CRM data

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Best Practice ProfileCommunity America

• Advice on data warehouse
• Establish the data warehouse as the system of
  record for all credit union reporting
• Drive from business areas not from I.T.
• Make sure business units clearly define data
  elements and educate them how data elements
  relate to each other
• Establish a Business Intelligence team to focus
  efforts
• Understand that data warehouse is an evolutionary
  process capabilities grow over time

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Best Practice ProfileBoeing Employees Credit
Union

• Background
• 5 billion credit union based in Seattle area
• Converted to Open Solutions, Inc. in late 2002
• Wanted to deploy a hub and spoke architecture
  for integrating all systems at the time of the
  conversion
• Products
• MultiPoint Integrator and MultiPoint Translator
  from qbt, Inc. (http//www.qbt.com)
• Staff
• Three Integration Analysts that build (using the
  vendor tool kit) and maintain middleware adaptors
• Staff has a working knowledge of XML, database
  design, networking and the software
  development/testing lifecycle

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Best Practice ProfileBoeing Employees Credit
Union

• Interfaces through the middleware
• Online Banking (Corillian Voyager)
• Telephone Banking
• ATM
• Shared Branching
• Online Member Enrollment
• CU Direct (dealer network for automobile loans)
• Core Transaction System (Open Solutions, Inc.)
• Consumer Loan Origination System (APPRO Systems,
  Inc.)
• Debt Collection System (Ontario)
• Mortgage Loan Origination
• Business benefits
• Implementation of new interfaces moved to weeks
  vs. months
• Advice
• Take ownership for integration dont wait for
  core vendor to take the lead

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Best Practice ProfileBoeing Employees Credit
Union

• Data warehouse
• Developed own data warehouse
• Utilizes MS SQL for database and Sagent for ETL
  and reporting
• Data warehouse has been used for standardized
  financial reporting, targeted marketing and
  setting credit policies
• Advice on data warehouse
• Start small with meaningful business questions
  you want answered and build from there

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Best Practice ProfilePennsylvania State
Employees Credit Union

• Background
• Well known, 2.2 billion virtual credit union
  based in Harrisburg, PA
• First foray into middleware was 1995 with
  thedevelopment of the credit unions own teller
  system
• Uses middleware to develop and maintain business
  logic in a central location
• All programs developed at the CU today utilize a
  middleware object
• Products
• Started out using Microsoft Visual Basic
• Current objects are compiled in Visual Basic 6
• Has started to convert the Visual Basic 6 object
  into the .NET platform
• Using both Visual Basic.NET and C.NET for
  generation middleware objects
• Staff
• Programming staff of both PSECU and eCU (their
  CUSO)
• Programmers have basic knowledge of Visual Basic
  and .NET
• Senior programmers work on the objects themselves

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Best Practice ProfilePennsylvania State
Employees Credit Union

• Interfaces through the middleware
• Home banking
• Loan origination application
• Loan issuing application
• New membership application
• New membership setup application
• Certificate purchases
• KIOSK account access application
• IRA Servicing Center
• Home banking signup
• OFX signup
• OFX interface to Quicken/Money
• CTI (computer telephony interface)
• IVR (Interactive Voice Response) system
• Business benefits
• Reusability of objects has greatly increased the
  efficiency of programming

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Best Practice ProfilePennsylvania State
Employees Credit Union

• Advice for middleware
• Design and analyze all business logic before you
  develop middleware this will allow middleware
  to be reusable in multiple applications
• Make sure the design is flexible enough to add
  modules/functions for future use
• Only have a select few maintain the middleware
  for updates and additions, but allow everyone in
  the development unit use it
• Data warehouse
• Have a data warehouse with transactional history
  from 1996 to present
• Also have a daily snapshot of member financial
  information (names, addresses, balances, loan and
  share characteristics, etc.)
• Use MS SQL Server with Crystal, Access, Excel
  reporting tools
• Financial transactional history is being used in
  home banking/kiosk to pull previous months
  history, allowing the CU to keep more months
  available to the membership
• The transaction data is also used to do analysis
  on trends by PSECUs membership and research of
  possible member problems from previous months
• The daily financial snapshot is being used to
  send out certain alerts to membership, as well
  as data consistency checks with the CUs financial
  data

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Cornerstones Multi-Channel Integration (MCI)
Model