Computerworld Honors Program

The Computerworld Honors Program

Honoring those who use Information Technology to benefit society

LOCATION:
Spartanburg, SC, US

YEAR:
2007

STATUS:
Laureate

CATEGORY:
Finance, Insurance and Real Estate

NOMINATING COMPANY:
Oracle

ORGANIZATION:

Advance America

PROJECT NAME:

Advance America Grows with Oracle Enterprise Grid

Short Summary

Since 1997, millions of Americans have turned to Advance America to secure short-term loans that many traditional financial institutions don’t offer. Today, the Spartanburg, SC company is the largest provider of payday cash advance services in the United States, operating more than 2,800 payday cash advance centers in 37 states. To meet rising consumer demand, the company has been opening new retail centers at a phenomenal rate, and by 2004 the growth started pushing the limits of the company’s client-server IT infrastructure, creating barriers to growth and profitability.

In response, Advance America designed and implemented an ambitious new approach, launching an Oracle-based grid computing platform that connects the centers over the Web to a centrally managed database and applications platform. The consolidated grid architecture yielded a range of benefits, including sharply lower center start-up costs, streamlined IT support, and faster access to business intelligence. The grid is unleashing revenue potential by providing the technical means to launch innovative Web services and partnerships. And better data consolidation and control is strengthening Advance America’s regulatory-compliance programs as well as overall investor confidence.

Introductory Overview

Advance America began looking at new information technology in 2004 as part of a broad-based effort to more effectively manage the company’s expansion. At the time, the company was opening new branches at a rate of about 350 per year and facing myriad business challenges and opportunities related to that growth. While executives wanted to open up new centers as quickly as possible to capitalize on surging demand, they also wanted to grow profitably -- by controlling costs, strengthening best practices, and laying the technology foundation necessary to sustain further growth.

Early on, the company recognized that its existing client-server IT architecture wasn’t up to the task, and many executives characterized the infrastructure as “hitting a wall.” The old decentralized approach meant that each center had to be equipped with a completely independent hardware and software environment, leading to high center startup costs and delays. The greater complexity of this model -- especially the proliferation of different software instances -- also kept maintenance costs high. Not infrequently, centers needed to ship machines to and from headquarters to implement fixes and upgrades.

To consolidate data, the company downloaded and compiled data from each center in nightly batches -- a task that grew tougher as data volumes rose. “There weren’t enough hours in the night,” said Dave Toothman, Advance America’s chief information officer. The batch-processing environment also made it hard to monitor center performance in real time and share business intelligence across branches. Access to key information, such as a customer’s phone number, might be available at one site but not another.

The fragmented environment limited the company’s ability to track and meet regulatory requirements that varied widely from state to state. It also impacted the company’s business development plans involving partnerships and relationships with large financial institutions, which need assurance of Advance America’s compliance capabilities.

All of these concerns were addressed by the company’s 2004 investment in a grid computing architecture running Oracle Database software on a fault-tolerant server cluster. Advance America calls the new architecture its eAdvantage Platform. Most centers now use economical thin client machines and connect to the grid via the Web to run applications and share data. Managers now tap a continuously updated central database and generate reports in near real time.

Already the move is paying off in lower branch startup and support costs, faster reporting, and greater visibility into business performance and customer trends. The clustered-server architecture also scales cost-effectively, so it can keep pace with growth; while grid-management tools are boosting IT management productivity. (An independent study estimated total net benefits of almost $3 million over five years, equating to a net return on investment of 131%.) Beyond the savings, the company expects the grid to unleash new revenue potential by enabling new Web services with partners. It also expects the grid to streamline and tighten regulatory compliance programs and boost investor and partner confidence as a result.

Benefits

Has your project helped those it was designed to help? Yes

What new advantage or opportunity does your project provide to people?
Advance America’s move to the consolidated grid infrastructure yielded a host of tangible operational and financial improvements. Among the most important advantages: a steep reduction of hardware setup costs at branches, sharply reduced IT support costs, faster and more accurate reporting, and a boost in labor productivity.

According to a 2006 consulting study, the cost of setting up hardware at new cash-advance branches fell in half following the implementation, and ongoing hardware support costs are expected to moderate, falling by a third over five years. Executives attribute both improvements to the new grid infrastructure, which is enabling Advance America to switch to economical, longer-lasting thin clients at its branches, and maintain core applications centrally on the grid, minimizing the need for costly field support and machine maintenance.

The cost of adding processing capacity to the central grid will also become more manageable because the company can leverage the grid’s clustered-server architecture to add new computing capacity and storage in smaller as-needed increments. This same feature will allow Advance America to “take advantage of future releases and CPU capacity enhancement,” CIO Toothman said.

Altogether, the grid equips Advance America with a more scalable, cost effective platform to confidently pursue business expansion. And it gives managers better access to business intelligence, which executives said is leading to better decision-making, both at the corporate level and at individual branches. By replacing batch uploads with a central database, managers no longer wait days to access key data and reports.

Finally, the grid consolidation project is providing greater opportunities for strengthening business partnerships. In one example, Advance America is now using its grid to run Web applications that offer customers complementary products and services from partners.

Has your project fundamentally changed how tasks are performed? Yes

How do you see your project's innovation benefiting other applications, organizations, or global communities?
The Oracle enterprise grid forms the technology base of Advance America’s eAdvantage platform, the core set of applications running the company’s financial-services business. Managers and staff throughout the company are benefiting from Advance America’s grid investment, which helped the organization control the cost of growth, centralize data and business intelligence for real-time access and analysis, and create the technical basis for improving regulatory compliance and exploiting new business opportunities.

The grid deployment is boosting the productivity of the IT organization and is expected to generate millions in staff savings over five years. One example: since the company migrated from numerous field-based database instances to a single grid-based instance, it now takes 28% fewer database administrators to manage overall IT operations.

Administrators respond to support requests faster because they can handle most technical issues within the centrally managed environment. Administrators also use specialized grid diagnostic tools to quickly identify and solve system-wide availability and performance problems -- a significant productivity advancement over the fragmented legacy architecture.

Project benefits extend beyond the employee base, impacting the company’s wider ecosystem of business partners, investors, regulatory agencies, and customers. As noted, the grid platform lends itself to real-time delivery of information to branches, thus creating opportunities for offering complimentary services to customers at the point of sale. Several new partnerships to exploit this capability have been developed and more are in the planning stages.

The grid architecture also enhances responsiveness to regulatory agencies because it allows for closer tracking of business data and activities at every branch. System-embedded controls and auditing mechanisms can be put in place to ensure the company is following the multiplicity of laws governing financial businesses in each state. As such, the project serves to instill confidence in customers and business investors seeking assurance of Advance America’s compliance capabilities.

The Importance of Technology

How did the technology you used contribute to this project and why was it important?
Without question, information technology contributed to the success of this project, making it possible for Advance America to achieve nationwide integration of its branch operations and building the foundation for long-term business growth. Centrally sited at Advance America’s Spartanburg headquarters, the grid platform consists of a four-node cluster of IBM P5 series servers (4 CPUs per node) running Oracle Database, Real Application Clusters and Enterprise Manager software.

The clustered server approach offered key operational advantages over the legacy system, including greater overall system reliability. As CIO Toothman noted: “We wanted to avoid a single point of failure. The multi-node cluster provides the reliability and failover redundancy we needed to ensure constant availability of our mission-critical applications.”

Other key grid components include a pair of Cisco load balancers to manage data traffic from the centers, a three-node WebLogic application server cluster, and a 2-terabyte storage area network (SAN) utilizing an IBM disk array in combination with Oracle Automatic Storage Management (ASM) software.

The ASM technology contributes to greater productivity by simplifying and automating database file balancing and provisioning tasks. Said Database Administration Director Sanjay Bamba: “We’ve been impressed by the performance benefits and the self-management capabilities that ASM provides. We’ve been able to add disks onto a running system in less than five minutes—which is phenomenal.”

Also contributing to overall efficiency is a central grid-management console that helps IT administrators oversee the nationwide network. Other tools help automate labor-intensive tasks such as software patches, upgrades, and trouble-shooting. Advance America’s grid project also introduced a centralized disaster-recovery solution utilizing new technology to create and manage standby databases. Overall, Toothman observed, the grid has proven to be “extremely stable, very robust and very scalable.”

The company today is achieving nearly 100% uptime at the cash-advance centers, in large part because managers can perform routine patches and upgrades on the grid without taking applications offline. In addition, the company deployed extensive new quality-assurance processes to test global applications and upgrades prior to network-wide rollout, minimizing disruptions. Enterprise-wide deployment of software fixes and upgrades now take a third less time compared to the legacy environment.

Originality

What are the exceptional aspects of your project?
The project was exceptional in several respects. The move to a grid-computing model was in itself an ambitious and potentially risky strategy, but it paid off in light of the grid’s subsequent stability, reliability, and cost-effectiveness. The project was impressive in scale, involving an initial investment $3.8 million in hardware, software and implementation consulting services.

One of the most significant impacts of the project was how it streamlined the hardware environments at field centers, enabled by the switch to a central pool of computing power. The change in architecture is projected to save millions in hardware and related startup costs at branches. The project also connected the branches in real time to headquarters (and by extension to other centers), tremendously increasing visibility and data-sharing potential.

The company has already capitalized on better data sharing by setting up new cost-saving processes, such as cross-matching phone numbers with customer records to screen out potential bad debts. The company is already reaping measurable returns from this program. “We anticipate significant additional costs savings through the visibility provided across our customer base,” said CIO Toothman. “Simply having the ability to check a phone number will significantly reduce our bad loan write-offs.”

Also exceptional was how the project improved support to income-generating branch offices, where downtime can translate into lost revenue. Because of centralized grid management, support queries have been cut significantly, and downtime has been virtually eliminated. As Nathan Wiggins, QA Director, observed: “Centralization of the application enabled by grid technology has allowed our QA team to provide a rapid response to branch level issues with certainty that we can fix problems the first time.”

How is it original?
Advance America’s project was not the first deployment of grid technology, an approach to computing that has been around since the 1990s, when companies began exploring the idea of tapping a pool of processing power from interconnected computers. But this project demonstrates an original application of the concept in a unique market, and solid proof of its cost effectiveness and business potential.

The project demonstrated how grid technology -- together with hardware and software consolidation -- yielded dramatic cost and productivity increases. Yet the project’s ultimate value could lie in how the grid adapts to support the latest business initiatives. One such initiative that is already paying dividends is the use of the infrastructure to carry VOIP communications. The network design was more than sufficient to allow for simultaneously transporting both types of traffic. As a result, Advance America has converted nearly half of its centers to VOIP, saving more than 50% in telecom costs.

The unified platform also better positions the company, a founding member of the Community Financial Services Association, to meet its commitment to responsible lending practices in every community it operates. New laws and regulations can be swiftly incorporated into the national network, and clear audit trails are more easily compiled within the single global database and applications environment.

Finally, as mentioned, companies are more likely to partner with Advance America knowing that its integrated platform will help ensure compliance with myriad state regulations governing financial services companies and federal legislation such as Sarbanes-Oxley.

Is it the first, the only, the best or the most effective application of its kind? Most effective

Success

Has your project achieved or exceeded its goals?   Exceeded

Is it fully operational?   Yes

How many people benefit from it?   7000

If possible, include an example of how the project has benefited a specific individual, enterprise or organization. Please include personal quotes from individuals who have directly benefited from your work.
"We anticipate significant costs savings through the visibility provided across our customer base. Simply having the ability to check a phone number will significantly reduce our bad loan write-offs." David Toothman, Chief Information Officer

"We wanted to make sure that IT wasn’t the reason for a slow-down in our business’ growth plan. Oracle 10g grid technology provided that solution." -- Sanjay Bamba, the company’s database administration director

"The multi-node cluster provides the reliability and failover redundancy we needed to ensure constant availability of our mission-critical applications." -- David Toothman
Chief Information Officer

"Centralization of the application enabled by grid technology has allowed our QA team to provide a rapid response to branch level issues with certainty that we can fix problems the first time." -- Nathan Wiggins, QA Director

"In the distributed environment, our support team was stretched to the respond to branch needs, especially on our heaviest traffic days. The Oracle grid solution has allowed us to support all branches seamlessly, and resolve problems immediately at the source." -- Chad Wiley, Director, Technical Services

"We felt it was important to minimize the layers of complexity. That’s the reason we chose Oracle all the way for managing the cluster." - David Toothman, Chief Information Officer, Advance America

"We’ve been impressed by the performance benefits and the self-management capabilities that ASM provides. We’ve been able to add disks onto a running system in less than five minutes—which is phenomenal." - Sanjay Bamba, Director, Database Administration, Advance America

"The Oracle grid solution has provided Advance America a platform to modernize our operations. Our first success was in deploying a Web-based branch application followed quickly with increased efficiency and cost savings through implementation of VOIP. Many similar solutions are planned for the future." -- David Toothman, CIO

How quickly has your targeted audience of users embraced your innovation? Or, how rapidly do you predict they will?
Advance America launched the Oracle-based grid solution in March 2005, following six months of preparation that spanned architecture review, training and test environment setup, and final stress testing, data importing and go live. The new platform was embraced early on by nearly all users of the company’s core business applications in some 2,600 centers, and by other managers and executives who rely on reports and performance data generated by the new eAdvantagae platform. From a strictly cost-benefit perspective, the company is expected to achieve payback on the investment in 2.5 years, according to a consulting study.

Difficulty

What were the most important obstacles that had to be overcome in order for your work to be successful? Technical problems? Resources? Expertise? Organizational problems?
The company faced a number of obstacles building the new system. Most of these were to be expected given the size and scope of the project, and the relative newness of grid technology. Specifically, the IT team was challenged to accurately analyze load and capacity as it built the new system. And team resources were severely stretched during the critical transition period -- that time when it began introducing the new system but still supported the old one. Advance America suggests making a complete transition as quickly and seamlessly as possible.

The company found that it was necessary to hire a new mix of IT skills, realizing quickly that the job of managing a centralized platform called for a somewhat different set of competencies, particularly with regard to database administrators and system administrators. The company recommends getting these new skill sets on board early to gain momentum before the launch and ensure a smooth implementation. It also stresses the importance of thorough integration testing on patches and installation routines.

The IT team emphasized the value of being open to experimentation and learning during the design and implementation phases, because complex projects and technologies rarely work perfectly out of the box. As such, another key to success is securing ready access to knowledgeable personnel from the vendor’s support team.

Often the most innovative projects encounter the greatest resistance when they are originally proposed. If you had to fight for approval or funding, please provide a summary of the objections you faced and how you overcame them.
Fortunately, Advance America received solid executive sponsorship and support for this major infrastructure project. A consensus for change emerged early in the planning process, including input from every line of business. A company-wide commitment to fully fund the grid investment followed. At the heart of the discussions with executive management was a desire for creating redundancy in all aspects of the infrastructure supporting the center’s operating environment. The cost of downtime would be enormous and the impact on customers would be unacceptable. Database clustering was a perfect solution allowing Advance America to translate this concept into a real, tangible asset to the company.

Digital/Visual Materials

The Program welcomes nominees to submit digital and visual images with their Case Study. We are currently only accepting .gif, .jpg and .xls files that are 1MB or smaller. The submission of these materials is not required; however, please note that a maximum of three files will be accepted per nominee. These files will be added to the end of your Case Study and will be labeled as "Appendix 1", "Appendix 2" or "Appendix 3." Finally, feel free to reference these images in the text of your Case Study by specifically referring to them as "Appendix 1", "Appendix 2" or "Appendix 3."

Currently Uploaded Appendices:
No appendices currently uploaded.