Merrill Lynch: CatchUp Leader in ECommerce Technology

1
Merrill LynchCatch-Up Leader in E-Commerce
Technology

• Chapter 7
• Case 3

2
Business Challenges

• Offer online trading to retail investors.
• Provide institutional clients with the
  applications they wanted most.

3
Response to Challenges

• Build an entirely separate software development
  division.
• Address the needs of their institutional
  investors by proving trading applications and
  access to the firms research reports over secure
  connections make sure they never fail and keep
  rolling out new applications and fixes for those
  already release.

4
Complexity of Applications

• Complexity of applications is mind bottling.
• Sophisticated clients want direct
  computer-to-computer links to ensure the highest
  level of security.
• Updating tick-by-tick market data and sending it
  in real time is a major concern.

5
Risks

• Transaction and volume required to send and feed
  massive amounts of pricing information, security,
  data integrity, firewalls, and complexity of
  interactions with back-end systems.
• Mission critical operation. Split-second delays
  could cost the firm a transaction, a lost
  customer, or even a lawsuit.

6
Playing it Safe

• Implementing new technologies can carry risks.
• Merrill Lynch often turns over the ongoing
  management, testing, maintenance, and support to
  outside specialists.