As competition increased and margins shrank, The Scarborough Building Society Group recognized that it needed to react more quickly to changing market demands. "We were going through a strategic review to determine how to reprofile our business to ensure that we could cope with this deteriorating-margin business," relates Kevin Moran, IT director for the North Yorkshire, U.K.-based organization, which offers mortgages, savings accounts and financial-planning services in addition to insurance.
The Scarborough Building Society Group (more than US$8 billion in assets under management) determined that its current technology was inadequate. Its Fujitsu (Tokyo) mainframe was "very tried-and-tested technology, but being mainframe-based had its limitations, such as difficulty in extracting data and integrating with other systems," Moran says. "We needed a more-agile system."
The company first set out to find a solution in 2004. Scarborough considered buying off-the-shelf software, but the available offerings only met about two-thirds of its requirements, according to Moran. The building society also thought about a customized rewrite of its code, he adds, "But we fairly quickly discovered that it would have been a high-risk and high-cost solution."
Then Scarborough considered a system migration that would migrate its Fujitsu mainframe applications and IDMSX database to a Microsoft (Redmond, Wash.) SQL Server and .NET platform. "Essentially what you have got is exactly what you had before, but instead of it running on a mainframe, it runs on a Microsoft SQL server," Moran explains.
"It allows us to use the Fujitsu code and convert it to something that the Microsoft world will understand. But the limitation is that you have got no new functionality," Moran continues. Still, "This solution offers the least risk and the least business disruption, together with the least cost," he says.
After considering two legacy-modernization tools and services vendors, Scarborough signed a contract with Cary, N.C.-based BluePhoenix Solutions in June 2004. According to Moran, the choice came down to "the ease with which we could continue to maintain that code post-migration and the ability to expand on that code," he says. "Now we can develop new code using the legacy code or Microsoft tools."
The building society purchased about a half-dozen servers for the migration but did not have to buy new software, Moran relates, and the implementation began in January 2005. As BluePhoenix migrated code, Scarborough would test it. "It took us probably 18 months to complete the testing program," Moran says.
Only a few IT staff members required brief training to get them up to speed on the migration process and its impact on the underlying database structure. "The biggest benefit from an internal-customer standpoint is that the system looks and feels and operates like it did before the migration," Moran says.
Technical issues with compiler software, however, resulted in "a delay in getting the project off the ground," Moran points out. "We also had a business to run," he adds. "Part of our challenge was to keep maintaining the system while we were doing the migration," which was completed in January 2007.
According to Moran, the new setup reduces the time needed both for new-application development and to run a program by about 30 percent. The time savings, he notes, gives Scarborough the capacity to offer enhanced services, such as extended service hours.
The company also can devote more time to making systems changes for its third-party clients, a fast-growing business for Scarborough in which it administers mortgages for other organizations. "It comes back to agility and our ability to bring new products and services to market," says Moran. --Judy Ward
Institution: The Scarborough Building Society Group (North Yorkshire, U.K.).
Assets: More than US$8 billion.
Business Challenge: Modernize mainframe IT system to improve agility.
Solution: A system migration in conjunction with BluePhoenix Solutions (Cary, N.C.).