Marketing a Menu of ProductsBy Kevin Fogarty Print
After Moody’s segregated its credit-analysis and reporting business from the unit that sells data and analysis tools, the financial reporting firm charged the IT department with developing, unifying and standardizing the technology needed to support that change.
Marketing a Menu of Products
Rotella stresses that the new tools business is not a quickie rollout of homegrown spreadsheets and reports; nor is it solely a last-minute strategic shift to escape a tightening market. Moody’s Analytics went to market with a menu of products that were designed as commercial applications and had been surviving on their own in the wild.
These products include applications from Wall Street Analytics, a small but established company that specializes in tools that analyze the viability of the same kinds of bonds and loans that caused the subprime mortgage crisis in the first place. Moody’s bought Wall Street Analytics just a week after announcing that it had hired Rotella.
Later in the year, the new focus on tools drove Moody’s to buy three other debt-analysis companies in quick succession: bond-pricing data provider Mergent Pricing and Evaluation Services, stock-and-bond-pricing tool provider BQuotes and Financial Projections Ltd., which specializes in training bank employees to handle the loan and credit market.
The shift in strategy was difficult, but it couldn’t have happened without a change in perspective about IT itself. Before the shift—and before Rotella was hired—IT was run like a utility. “IT was there to meet the basic needs of the business,” he says. “It had grown organically, but it wasn’t being used as a strategic lever.”
The first priority was to inventory the company’s software and analyze the results to identify gaps, redundancies and candidates for replacement. That analysis also showed that the company needed to simplify its data structures, reduce the number of database products it ran, and build a data warehouse to contain nonproduction data and act as a sandbox in which programmers could develop and test analytics.
“The technology strategy I have communicated to the board is one of simplification,” Rotella says. “If we want to sell analytic tools and data products, we need a simplified database environment that allows us to build out new products.”
The key to a simplified computing environment in Moody’s, which has very complex requirements for data, is essentially a simplification filter.
“We’re coming up with a simplified operational data model that we’re running everything through,” Rotella explains. “Middleware and workflow tools allow us to capture data properly and store it, but the root of that is creating the right data structures that match a lot of the complexities we see in the market. We’re doing this from the ground up, so we can build the complexities in, rather than adding them later.”
Creating those structures and simplified relationships among internal applications and data took up much of the last year. The first major pieces of what will be a substantial companywide update—new workflow for ratings analysts—will roll out by mid-summer.
“We’re not trying to boil the ocean,” says Rotella. “Last fall, we got into the business-system concept. This year, we picked a few key initiatives. Looking at the workflow of the ratings business helps us ensure that we have the right data structures in place.”
What Rotella doesn’t worry about is support from top managers for the changes he’s making, even when those changes are expensive or potentially disruptive to existing processes.
“Everyone, from the senior managers in the ratings business to the CEO and the board, are very supportive of and very engaged in what we’re doing. They are committed to doing the right thing. I haven’t seen that much commitment before, and it’s exciting.”
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