Customer Solution Case Study
/ / Lloyd’s Register Cuts IT Spend by a Third with Integrated Solution
Overview
Country:United Kingdom
Industry:Professional Services, Risk Assessment and Ship Classification
Customer Profile
Lloyd’s Register provides safety certification for a range of marine and land-based infrastructure globally.
Business Situation
Lloyd’s Register’s IT approach had evolved rather than been designed, with each of the company’s 120 national offices operating independent IT strategies.
Solution
Lloyd’s Register used a range of Microsoft® products to introduce a unified IT strategy across its entire global operation, significantly reducing costs in the process.
Benefits
Global IT spend down from 6 to 4 per cent
75 per cent reduction in servers
Improved information sharing
Supports mobile working
Rapid response to change / “As a result of introducing a unified Microsoft strategy, IT spend has dropped by between 30 and 35 per cent over the last three years. This not only brings savings to the business, it also brings us credibility….”
Stephen Hand, Group IT Director, Lloyd’s Register
Lloyd’s Register provides independent risk assessment and mitigation services. Its 5,500 staff, 40 per cent of whom are classified as mobile, operate out of 234 offices in 120 countries in Europe, the Middle East, Africa, Asia, and the Americas. Three years ago, the non-profit distributing organisation decided to consolidate its diverse IT architecture, choosing Microsoft® software over alternatives such as Linux. It also moved from HP OpenMail to Microsoft Exchange 2000 Server, and consolidated 76 Unix servers down to 56 servers running Exchange 2000 Server; a further reduction to 20 is expected when Lloyd’s Register completes the move to Microsoft Exchange Server 2003. As a result, IT operating spend at Lloyd’s Register has dropped by more than 30 per cent. The company is now looking to develop more applications using the Microsoft .NET Framework, particularly to bolster its support for mobile staff.
Situation
Lloyd’s Register has offered risk assessment and mitigation services for nearly 250 years. Having begun its life examining and classifying the sea-worthiness of merchant ships, its operations have since expanded into management systems, land-based industries, oil, and gas.
A registered charity, the non-profit distributing company operates from 234 offices in 120 countries, and its IT infrastructure has evolved sporadically. Stephen Hand, Group IT Director, Lloyd’s Register, says, “In terms of technology, this was a very fragmented organisation, with each country operating as an independent unit. Resources were spent on overlapping systems, and information flow was restricted. We needed to create a global infrastructure.”
Daniel King, Head of Architecture, Lloyd’s Register, says, “We had data centres in 100 of the 234 offices, and were running a mixture of Novell NetWare version 3 and 4, and Microsoft® Windows NT® version 4.0. This meant it was not easy to get data from one system to another. The IT department supported 62 different models of desktop and laptop, and so support was taking far more of our time than it should have.”
Savings are fundamental to any business, but the risk assessment arm of Lloyd’s Register has a wider responsibility. The company registers fleets of ships and has a global remit to ensure that safety standards are maintained, classifying shipping, oil platforms and physical infrastructure according to safety levels.
“This is not just about the bottom line; this is using IT to carry out our mission to ensure lives are safe both at sea and on land,” says Hand. “The compliance responsibilities mean that we are often the regulator as much as the regulated, and so we have to ensure that the tools we operate with are very effective. Our staff has the right to stop ships from sailing if they feel there is a risk and they can only make that decision based on the best possible information,” explains Hand.
The fragmented legacy architecture made it difficult to extract risk assessment information where it was needed. An assessor often had information that could be useful to a colleague in making a decision, but because the information was stored locally on a laptop, rather than automatically in a global data centre, decisions were being slowed down.
“When the information is needed to ensure the safety of an activity, the speed with which it is circulated around the business is of fundamental importance to a company’s financial viability and the safety of its employees,” says Hand. “When there are obstacles to the rapid dissemination of that information, it adds unnecessary costs and puts business at risk.”
This also jeopardised the overall reputation of the organisation. Hand says, “We have the right to ban ships from sailing if we believe safety levels are not up to standard, so we cannot be commercially influenced in any way. Equally, the decision to stop a ship from sailing can have serious implications for the company that owns it. That company has the right to expect that we are working with the best available tools and have all the relevant risk assessment information at our fingertips.”
Solution
Lloyd’s Register needed a system that could support its entire portfolio of business, including maritime, land-based, and management services operations. The organisation was also looking for a system that could support its increasingly mobile workforce and help the business respond quickly to future regulatory changes.
“We were fairly agnostic about which platform we took, we simply wanted to make the right decision,” says King. “Unix appears to lack a roadmap for the future. We expected Linux to be significantly cheaper, but not only was this not the case, because of the tier approach that we took, it is actually not as versatile as the Microsoft offerings.”
“Unix appears to lack a roadmap for the future. We expected Linux to be significantly cheaper, but not only was this not the case, because of the tier approach that we took, it is actually not as versatile as the Microsoft offerings.”Daniel King, Head of Architecture, Lloyd’s Register
The consolidation within the data centre took an adaptive infrastructure approach, and it was this that exposed the potential lack of versatility in Linux, suggests King. Where previously there had been a point-based approach to hosting applications on the infrastructure, with a server being brought in specifically for an application, Lloyd’s Register now defines applications by specific patterns, such as 2-tier, 3-tier server or n-tier server. As a result, the company can now provision each application tier against sets of infrastructure that are shared across many applications.
“Our feasibility studies compared Linux, Unix, and the Microsoft Windows Server™ 2003 operating system to determine which platform would be best for supporting this methodology,” says King. “We found that Windows Server 2003 presented the most flexible approach. With it, we can provision database tiers based on both Microsoft SQL Server™ 2000 Enterprise Edition and Oracle, our corporate standard database platform, and we can host both [Microsoft] .NET and J2EE applications. We can utilise existing hardware, and consolidate this as we wish on a rolling basis. Windows Server 2003 offered us the most cost effective approach and was more flexible than Linux in this respect.”
Lloyd’s Register was receiving educational pricing for Windows Server 2003, therefore the capital cost of procurement was comparable to Linux. King says, “We only had to review the cost of ownership of each and its suitability to host the applications we currently run and want to run in the future. Cost of ownership in 2002 came out at around 25 to 30 per cent more using Linux compared to Windows Server 2003, and crucially it did not offer the flexibility to host our adaptive infrastructure approach.”
The project to unify the technology began in April 2002, with migration to the Active Directory® directory service completed in October the same year. Active Directory is part of the Microsoft Windows Server 2003 operating system, which is the foundation of Microsoft Windows Server System™ integrated server software. Rollout of Microsoft Windows® XP and Microsoft Office Professional Enterprise Edition 2003 was completed June 2003, while the rollout of Microsoft Exchange 2000 Server took place between January 2003 and 2004.
“The current project is upgrading from Microsoft Exchange 2000 Server to Microsoft Exchange Server 2003 to ensure that we can take advantage of the extensive mobile options in the latest iteration,” says King. “Exchange Server 2003 will publish all of our data to the Web, so it can be accessed directly. At this point there is a lot of information being stored locally on individual computers. The integrated use of Exchange Server 2003, the 2003 release of Microsoft Office, and Microsoft Office InfoPath® 2003 will deliver a lot of new tools for our users.
“We have so many data assets, we need to ensure they are managed and archived effectively, and Exchange Server 2003 will help us achieve this,” King says. “Future legislation is likely to demand that we have greater access to it, but the point is to ensure that our staff have access to what they need to make the right decisions.”
All of the 5,500 users at Lloyd’s Register are now running Microsoft Office XP Professional on the desktop and are using a standard range of hardware provided by HP. Capgemini has been the outsource partner and has brought its extensive experience in major re-architecture projects to bear at Lloyd’s Register.
The company is also using Microsoft Internet Security and Acceleration (ISA) Server 2004 alongside a selection of third-party vendors to ensure that security is as effective as possible, and has been working with Microsoft and Capgemini to boost its Web services using Microsoft Identity Integration Server 2003. Both ISA Server 2004 and Identity Integration Server 2003 are part of Windows Server System.
“The new systems will give us better integration with third parties in the industry,” says King. “We are also looking to provide managed digital internal identity as well as enterprise active management tools. They will provide us with a better idea of who is using the systems and services and ensure that we are integrated all the way through the service. We can now get a round-the-clock view of who is using the service.”
Microsoft Operations Manager 2005, also part of Windows Server System, is being used to provide a string of alerting and troubleshooting tools. Active Directory is being extended into the data centre, which is in the process of being outsourced.
Moving forward, Lloyd’s Register remains committed to Microsoft products and is in the process of making bespoke developments in the Microsoft .NET Framework, an integral component of Microsoft Windows that provides a programming model and runtime for Web services, Web applications, and smart client applications.
“We want to build more business support systems and let our staff drill down further and get more information, more easily, and in a more integrated fashion,” says Hand. “A high proportion of our staff do not work from an office, so it is imperative that they have constant access to tools tailored to their specific requirements.”
Benefits
IT Costs Reduced by One Third
As a result of the work to unify the structure, and the reduction in the numbers of servers and licences, Hand estimates that IT costs have dropped by more than a third. “As a result of introducing a unified Microsoft strategy, IT spend has dropped by between 30 and 35 per cent over the last three years,” says Hand. “This not only brings savings to the business, it also brings us credibility to keep moving forward.”
The new architecture has helped Lloyd’s Register continue to assert its relevance in the modern global economy. Rather than simply being another regulatory hurdle to companies trying to carry out their business, the company now offers a significant collection of information which can be used to support decision making.
The benefits have also been felt by Lloyd’s Register’s IT call-centre staff. “Since the new infrastructure has been put in, the help desk has seen a significant reduction in the numbers of calls it receives,” says King. “The types of call are also changing. People are no longer asking how to get one system to interact with another; they are now far more proactive, making suggestions for tools which will help the business move forward.”
Number of Servers Reduced from 76 to 20
Lloyd’s Register has realised significant savings in the number of servers it needs to operate and maintain. This has reduced the amount of downtime when information is no longer available and opened up different collections of data to one another, bringing the potential for the company to create more tools.
“Moving to a unified Microsoft architecture has reduced the number of servers we run from 76 to 54,” says King. “Once Exchange Server 2003 is in place, we will only have to operate 20 servers globally. We will be able to run multiple applications over single servers, so we can continue to consolidate our hardware as we grow.”
Coupled with this, King points out that Lloyd’s Register benefits from cheaper development skills by using Microsoft. In the main, the company buys best of breed systems for its activities, only bringing in developers for very specific line of business activities. In this situation, Unix-based skills, including Linux developers, are significantly more expensive than Microsoft.
“It cost eight times more to run a Unix server than Windows XP Professional, because the cost of Unix skills are significantly higher,” King says.
FlagState Information Changed in Seconds
The company’s integrated global data centre reduces processing time and ensures that Lloyd’s Register meets any possible new compliance regulations that could be introduced. By ensuring that data is easily available across the business, it benefits from having the most up-to-date information when decisions are being made. It also means data is not collected twice and changes in information are easier to track.
The InfoPath 2003 information gathering program plays a role here. David Knott, Chief Technology Officer, Lloyd’s Register, says, “On the marine side, we operate on behalf of flag states. Changing a ship from one flag to another is very complex and used to involve changing a lot of information manually. We are using InfoPath 2003 because it lets us apply rules and keep the look and feel of a Microsoft Word document but makes it simple to convert information on a ship from one flag to another. Where it formerly took several days to change and process a ship’s registration, with InfoPath 2003 it takes seconds.”
Supporting Mobile Working in Risk Assessment
The nature of Lloyd’s Register’s work has meant that the support of mobile working by Microsoft and its partners has been welcomed. Migrating to Exchange Server 2003 lets the company make the most of the tools that are currently available and puts it in a position to make the most of new ones as they arrive.
“One of the next projects is to introduce Voice over Internet Protocol [VoIP] to the working processes, which should also save us a significant amount of money given the amount of international calls that we make,” says King. “The benefits that being mobile can bring to the organisation will be significant. The hardware and services that we are putting into place will help us move towards an integrated VoIP infrastructure. As the technology becomes more commoditised we will look to offer more tools.”
Rapid Response to Change
The integrated Microsoft approach lets Lloyd’s Register respond quickly and effectively to the rapid pace of change in the industry. Hand says, “Using Microsoft means that we simply remove the IT risk, which is considerable. We are pushing so much change and we are finding we can optimise the business processes and support them far more effectively with the technology that Microsoft provides.
“Rather than recognising a need and then having a hiatus as a system is designed and installed, by which time the business need has changed, we can recognise and respond to a need very quickly,” says Hand. “Creating an environment where this is possible, while at the same time reducing costs by a third is very satisfactory.”
The benefits of the consolidation work are now being felt across the business. “The aim of the overall programme of work was to bring down IT spending globally to a threshold of 4 per cent of revenue, from a previous figure in excess of 6 per cent,” says King. “This is now starting to be realised, and global IT consolidation has been a primary contributor to this.”
Microsoft Windows Server System
Microsoft Windows Server System is a comprehensive, integrated, and interoperable server infrastructure that helps reduce the complexity and costs of building, deploying, connecting, and operating agile business solutions. Windows Server System helps customers create new value for their business through the strategic use of their IT assets. With the Windows Server operating system as its foundation, Windows Server System delivers dependable infrastructure for data management and analysis; enterprise integration; customer, partner, and employee portals; business process automation; communications and collaboration; and core IT operations including security, deployment, and systems management.