Morgan Stanley Goes SOA

 'You Start Where You Can'

A couple of years back, at brokerage giant Morgan Stanley, it became obvious that the firm's information technology was a drag on its competitiveness.

To move systems forward, the company turned to a service-oriented architecture to fix its internal mess, with positive results.

Morgan Stanley Executives described their IT architecture up until 2005 as "substandard".   The firm had a lot of the usual issues that hold back many organizations – stove pipe systems,  branch offices that wouldn't, or couldn't, communicate or share files,  and a corporate culture in which developers were accustomed to doing everything themselves.   The company needed more and better performance data,  made available through dashboards and portals,  so it could better track the profitability of individual branches and product lines.

Morgan Stanley's first move was on the hardware side -- upgrading its network infrastructure connecting the branch offices.

The company then set out to develop a service-oriented architecture layer of common services that could be used and reused across its various operations.   But, as with many things SOA,   this was easier said than done.   As Lance Braunstein, Morgan's Managing Director of Field, Data and Application Services,  put it: "Everyone talks about SOA, but there is so much sunk cost in legacy systems that they're hard to back out of.    As a result,  you start where you can".

Braunstein's team found a good starting point to be in the rewriting of commonly used software components into Web services that can be used by any application.  Initial efforts focused on data access calls and identity management functions.   As noted above,  this was easier said than done,  especially in a culture in which developers did everything themselves.  "At first, developers felt it was disempowering to have to plug in to the framework and leave things like making an identity call to the standard Web service," Braunstein said.    However,  over time,  the developers began to see the merit of not having to rewrite those routines.

Next were the legacy apps themselves.    Portions of these appls had to be rewritten,   which involved retrofitting them into a common, consistent interface.    Using as a messaging standard based on SOAP XML,  Braunstein's team established a "canonical service bus" that serves as the backbone of its SOA.

The firm is seeing a range of benefits from its SOA move,  including more consistent data being delivered to online channels.   Morgan Stanley was also able to develop a new workstation for its advisers,   calculating that the amount of revenue each financial adviser brings in grew from $479,000 to $819,000 annually,  and assets under management per financial adviser grew from $40 million to $89 million.    In addition, the brokerage developed a Customer Portal which leverages the new infrastructure.

September 25, 2007