Merrill Lynch IT

1) One of the most crucial aspects to Merrill Lynch’s operational success is its information technology infrastructure. It is this business intelligence that has allowed for Merrill Lynch to become a worldwide leader in financial management and advisory services, consequently climbing to record net earnings of $5.1 billion. This IT infrastructure, however, required modernization in order to keep the firm competitive. Thus, Merrill Lynch had to make a decision about its legacy computers and applications. In order to remain competitive, it desired to maintain internet-based applications to provide its customers access to their portfolios, as well as access to tools to work with those portfolios. Its applications did not use mainframe-based software, so the challenge became to find an application that would leverage the processing power and wealth of data simultaneously in its mainframe. Therefore, it chose to follow different applications to provide its customers with what they require in a more competitive fashion in this ever-changing world of information technology. In essence, Merrill Lynch realized that its IT infrastructure needed to be updated to modern standards.

2) Information technology is one of the most important resources of success for Merrill Lynch. Its strategic asset is its IBM mainframe installation, which is one of the largest in the world. It runs about 23,000 programs to process daily online transactions in the order of 80 million for its customers. This IT infrastructure provides its customers with the data they require in an efficient manner. However, that method was becoming outdated, so the head of database infrastructure for Merrill Lynch decided to try service-oriented architecture. He felt it would be easier to purchase one rather than develop one, but that failed to do well since the programmers had little experience with the technology. After a few more obstacles, Merrill Lynch turned to creating its own set of in-house proprietary tools to allow its mainframe programs and functions to be exposed to web services. XML tags are used to describe the data for the applications. SOAP allows programs running under different operators to communicate. Together, it was made possible for online applications to communicate effectively with the mainframe, thus avoiding the middleware. This service was name X4ML and it established five criteria: 1) no new programming languages to learn, 2) no new software tools; tools are accessible via a web browser, 3) a central storage directory for web services that could easily be reused, 4) web services conforming to mainframe security standards, and 5) inclusion of new web service standards to ensure future viability. These five criteria and the abolishment of the middleware show how Merrill Lynch’s web services initiative satisfied its business strategy to modernize all the while holding on to its legacy mainframe and keeping the process simple and efficient for its customer-base.

4) I think it was a smart move on behalf of Merrill Lynch to sell off its successful business initiatives. Merrill Lynch has already established itself as a highly successful firm, so it already has the attention of a vast group of competitors. Therefore, there is a guarantee demand for its tools. Furthermore, the field of information technology is incessantly changing and evolving, so this new initiative will be obsolete given a few more years. That is why it was smart of Merrill Lynch to sell off its ideas while it is successful and desired by others. This way it can make a profit and direct some of those funds towards developing even more cutting edge information technologies.