J P Morgan Chase, officially known as J P Morgan Chase & Co is an American global financial services firm based at New York City and the biggest bank in the US and the third largest globally in terms of assets. The bank is also the most valuable one globally when viewed in term s of market capitalization; J P Morgan Chase was established in the year 2000 after the merging of JP Morgan & Co with the Chase Manhattan bank. The company has a global footprint and owns another five subsidiaries; namely; National Association, JP Morgan Chase Bank, Custodial trust Company, JP Morgan bank and Trust Company, and Chase bank USA, all within the USA (Wile, 2012). The institution has organized its activities into a private equity / corporate segments for the purposes of management reporting. The segments include corporate and investment banking, consumer and community banking, asset management, and commercial banking.
The investment banking is its largest operation and is further divided into using teams namely; mergers and Acquisitions, capital markets, and Industry; the industry team is then subdivided further into healthcare, consumer and retail, natural resources, diversified industries & transportation, metals and mining, media and telecoms, financial institutions, and real estate and technology. The organization also has operations in Europe, under JP Morgan Europe Ltd, founded in 1968 and originally known as Chase Manhattan Intl. Ltd. It is based in London, UK, at Canary Wharf. As of 2014, the organization had 241360 employees scattered around the world. The company has invested heavily I the use of supercomputers, which it says helps reduce the time for risk assessment for clients; a risk assessment decision can be arrived at in a matter of minutes, using the Field Programmable gate Array technology for making decisions (JPMC, 2017).
Before looking at the functional areas of JP Morgan Chase & Co, the operational model of the organization is reviewed as shown in the diagram below;
Its operational model incorporates processes such as strategic investing activities, undertaken through its investment divisions; technology, where the organization provides e-commerce solutions and automated processes, such as risk analysis; and people, including technologists and other expertise. All the three components of its operational model function to confer the organization a competitive advantage in its operations (Agyei-Ampomah & Collier , 2009). The people and processes confer to the organization intangible competitive advantages while technology works with people to provide tangible competitive advantages. All these factors form its core operational model that incorporates high standardization, low integration high processes, and replication; replication and low integration, coupled with high processes are the risks to the efficiency of its operational model in achieving the company’s goals and objectives (JPMC, 2017).
Its businesses processes are integrated with its IT infrastructure, and fall into the broad fields of customer relationship services, its core e-commerce services, common business services, and channel services; all based on its data architecture. The customer relationship service entails the processes of CRM, capturing the history of contacts, and information on products, as well as customer transactions. The core service is e-commerce based and includes forex transactions, market access, and bonds. The organizations common business services include trading, transactions, services, products offered to customers, and analytical instruments, such as client risk profile. The channel services run the company’s IT architecture, and consists of an imaging server e-mail, CTI server, and a gateway server. The organizations’ data architecture constitutes business intelligence, business data management, system data flows, financial records and infrastructure records (Griffin, 2015).
The business processes at JP Morgan Chase are aimed at making money while providing customers with value;
Under the consumer and community banking segment, the organization deals with customer segments that include individuals and wholesale (institutions). The individuals include consumers who are high net worth or ultra-high net worth, as well as ordinary consumers. JP Morgan Chase and Co (JPMC) offers products to the consumers, including lending, cash management, deposits, as well as payment solutions for small businesses (JPMC, 2017). Other products include mortgages, credit cards, merchant payment processing services, student loans, leases, and auto loans. The process begins by a prospect contacting the bank, either r through the internet or in person at one of its branches, or through a telephone call. The prospect then makes an application for whatever service or product they are interested in, such as applying for a loan or credit card. The prospect is then analyzed and streamlined, using the bank’s ICT and computerized analysis and risk management system. If the prospect wanted a loan or credit card, documents are provided and signed and this converts the prospect into a client of the bank. The client is then monitored over time to generate a risk profile and any problems that arise are managed, such as late credit card payments. A computerized ‘Hot Docs’ module manages the application documents; correspondence with third parties is done via the ‘Hot Docs’ system, which is run by various documentation teams. The customer data is managed through a CRM system, which works with a document management system (Noonan, 2017).
The JPMC integration model is centered on the client that entails diversified businesses, scaling and efficiency, fortress principles to optimize against constraints, and a stable performance. The company has view points for different business aspects and resources; these include the customer view point, the financial view point, strategy view point, and the technical view point. The other viewpoints include the information and security viewpoints (JPMC, 2017). These viewpoints are based on the business structure and the IT structure. The IT structure produces the technical, information, and security view points while the business structure produces the customer, financial, and strategy viewpoints. The business structure is composed of performance metrics, functions, and the organization of the business, operations, human resources, and business processes. The IT Structure is made up of the application architecture, the security architecture, the information architecture, and the infrastructure architecture (Schultz, 2015). These are the organizations’ capabilities that all combine to provide the customer with value, as the diagram below depicts;
The swim lanes for the JPMC business processes are depicted in the image below;
The future proposed EA for JPMC will mostly affect its strategy and governance structure; presently, the organization undertakes value analysis to identify competencies and then evaluate capabilities; from this, a risk analysis is done and non-value adding activities detected (Gollenia, 2016), (Schekkerman, 2004). In evaluating capabilities, the architectures are reviewed and strategies implemented that include offensive, defensive, and efficiency initiatives. The proposed ‘to be’ processes include a new EA touchdown in which there are organization touchdowns where governance and strategy become two distinct activities, from which a better EA is developed. The proposed future structure will entail governance system that attacks non value adding activities, removing obstacles to work and process flows, and evaluation. The strategy will entail defining and implementing new offensive, defensive, and efficiency initiatives, so that new capabilities are initiated from the offensive, defensive, and efficiency initiatives.
The Proposed ‘To Be ‘processes include optimization against constraints, deepening of client relationships, having stable performance, diversified business, and greater efficiency (Piller & Tseng, 2003), (Whittle, 2017). The new ‘to be’ processes will have a buyer/ seller business transaction model where the seller buys a products and the buyer sells a product. The new model will still be based around the customer, but the customer is to elicit a transaction by JPMC. The transaction will entail the customer working through agents that may be divisions or branches of the company, or touch points such as the internet. These contact the personnel at JPMC who develop and capture the profile of the customer, create an account, an offer services, such as investment, consequently, a transaction takes place.
The new proposed EA will be based on IT principles, where technology is used to meet company objectives and achieve a balanced score card. The IT principles to be followed entail using technology to generate sales instead of using people or sales people; this will achieve the internal business perspective of being successful at processes and the financial perspective of increased sales from less human resources and sales costs (Gleichauf & Aier , 2008). The IT principle will focus on real time and innovative generated services and information will be provided to the customers through the internet. Customer value is to be created using cutting edge projects and from customer feedback obtained from multiple access points, including the internet and social media. The IT principle will ensure JPMC becomes a leader in business solutions and technology. The new architecture will be based on a robust IT architecture that supports enterprise value creation trough the organization of processes, data, and business logic. A complex but simple IT architecture design is to be used; the design will enable the constant evaluation of processes based on a bottom-up approach. The IT architecture is to be administered by a technology governance board; this board will be chaired by the CIO: Global markets, working with other technology heads (Schafrik, 2011). Meetings should be held, say every two months, to identify any opportunities and leverage the existing shared infrastructure.
Overall, the EA architecture will be developed based on the agile model, specifically using SCRUM, and based on the following standards and best practices;
The proposed future state is an EA based on IT principles, and therefore there should be robust DRP (disaster recovery planning) to ensure BCP (business process continuity), in the event of a disaster, as the EA will be technology driven. The proposed EA ties the business processes to IT so the information, application, infrastructure, and security architectures with an IT strategy that forms part of the EA DRP. For JPMC, BCP will be assured by having a cloud based IT architecture that incorporates virtualization and the use of third party cloud service providers, such as Amazon Cloud. Servers are to be designed with redundancy and virtualized, for instance using RAID 6.0 (MuleSoft, 2015), (Rudawitz, 2003)
The SLA should be designed in such a way the cloud service provider is obligated to guarantee data security and integrity. The SLA must codify the minimum levels and specific parameters for every service element and failure remedies. It should affirm that JPMC owns all the data stored in the cloud exclusively and the rights to get in back in a suitable format. It will also define and detail the security standards and system infrastructure the service provider must maintain and rights for compliance auditing. The rights to discontinue or continue the service and the associated costs must be specified (Wired, 2012).
The new EA should serve clients fast; the time taken for risk analysis for a customer seeking a loan or for an envisaged project should be reduced from days and hours to less than 30 minutes
Customers should get feedback online within ten minutes for any enquiry
Approvals should take a few hours, rather than days, but less than twelve hours
There must be business process continuity without interruptions lasting more than an hour, in the event of a disaster.
The EA should allow up scaling and addition of more components, processes, and applications in future.
Third party vendors will supply applications that support the business processes, as defined in the proposed architectures’ IT infrastructure component. The cloud service provider must integrate with third party vendors, such as s for the CRM and ERP to ensure seamless operations.
As stated in the standards and best practices for EA; t is always advised to buy before build, reuse before buying; buying third party applications such as CRM help reduce costs and hasten implementation (Whittle, 2017); further, quality is assured because the vendors are specialized in their job; JPMC is specialized in banking and financial services, not applications development. By integrating third party vendors’ products into the EA, efficiencies are achieved, greater customer value, increased transactions, and lower costs of implementation and maintenance; all factors that help contribute to ROI (Stephens, 2016)
Criteria Third party vendors Use to Select and Implement the EA Methodology for the Enterprise
The third party vendors look at the integration levels, interoperability, business strategy, and the performance metrics when selecting the EA implementation methodology. The level of operations and complexity of the business, as well as its processes are considered before the EA is implemented (Stephens, 2016).
Summary and Conclusion
JPMC is a global financial services firm, whose current EA, though customer centered, needs to be further improved. EA is not a project, but a continuous process, and so while the company has done well with its EA, refinements and improvements are inevitable. The present operational model leverages technology, processes, and people, but is characterized by replication, low integration, and high level processes, which can be improved. The proposed EA is a future state in which IT principles drive EA and operations; technology should lead to higher performance and customer satisfaction, rather than people. JPMC should migrate operations to the cloud and have an EA integrated into the cloud to ensure business process continuity from an infrastructure that ensures redundancy. The SLA with cloud service providers must specify security and data integrity issues, right to ownership, and allow JPMC to appraise security standards and set costs.
References
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Gollenia, L. A. (2016). A Handbook of Business Transformation Management Methodology. Abingdon: Routledge.
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Noonan, L. (2017, Jan 30). JPMorgan Chase in push to mine customer data. Retrieved May 10, 2017, from Financial Times: https://www.ft.com/content/1eaf6436-e4a2-11e6-9645-c9357a75844a
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