Capital One IT Overhaul Powers Digital Strategy - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IT Leadership // CIO Insights & Innovation
12:00 AM
Connect Directly

Capital One IT Overhaul Powers Digital Strategy

The bank, No. 2 on the InformationWeek Elite 100 ranking, beefed up its IT development to outpace the competition.

VP of digital IT helped drive the Agile surge. Now, Eason says, business units are assigning more senior people to that product owner role, as they realize that these small Agile teams are entirely responsible for delivering the end software product.

CIO Alexander has two main takeaways from Capital One's transition to Agile. One, IT leaders didn't build a lot of slack time into production schedules for people to learn Agile techniques. "Teams figured it out quickly and figured out quickly how to deliver," he says. Two, once Agile use hit a critical mass, people rushed to get on an Agile team, viewing those teams as the future of Capital One.

Capital One built a brand-new datacenter so its infrastructure would keep pace with its digital ambitions.
Capital One built a brand-new datacenter so its infrastructure would keep pace with its digital ambitions.

$150 million datacenter investment.
Another board-level technology decision was Capital One's more than $150 million investment in a new datacenter outside Richmond, which CEO Fairbank christened last month in a ceremony with Virginia Gov. Terry McAuliffe.

Capital One had been using datacenters run by third parties. But what's the point of developing software faster if it takes weeks or months to deploy it to customers? The cost savings from outsourcing often are calculated by analyzing unit costs, Alexander says, but "you have to look at the productivity of the whole end-to-end system and what you get out of it." On that basis, insourcing will be the lower cost, he says.

Eason points to testing and integration as an area ripe for improvement. Eighteen months ago it took 15 days to test whether a new application was properly integrated with existing infrastructure. By doing more of that testing in increments, during development, it's down to three to five days. The goal is to tack only one day for testing onto a completed app dev project.

Online banking customers, of course, don't give a whit about testing times or other internal measures; they just want intuitive apps rich with useful, innovative features. For example, Capital One developed a Purchase Eraser feature that lets customers buy plane tickets or hotel stays with a credit card and then, within 90 days, pay for those purchases with reward miles instead. Through its acquisition of Sail, a payments company, Capital One launched Spark Pay, which lets small businesses process payments with a mobile device. In November, Capital One launched SureSwipe, which replaces passwords on its iPhone app with a pattern customers trace over a screen of dots.

Were such innovations worth hiring thousands of IT pros, training 600 Agile teams, and building a $150 million datacenter? Customers will vote with their clicks and their taps.

Trying to meet today's business technology needs with yesterday's IT organizational structure is like driving a Model T at the Indy 500. Time for a reset. Read our Transformative CIOs Organize For Success report today. (Free registration required.)

Chris Murphy is editor of InformationWeek and co-chair of the InformationWeek Conference. He has been covering technology leadership and CIO strategy issues for InformationWeek since 1999. Before that, he was editor of the Budapest Business Journal, a business newspaper in ... View Full Bio

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
2 of 2
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
User Rank: Apprentice
4/13/2014 | 8:07:16 PM
Not so fast
Capital One has the worst repitation here in VA. Their IT division uses and abuses workers then every two years brings in IT workers from India, Not only have I had personal experience with this as a developer but many friends also every two years the go on a big hiring spree and then a year later when the visas open up they go on a layoff  party. There is an apartment complex that Capital One has set up just for this. So I have no sympoathy for them.
Li Tan
Li Tan,
User Rank: Ninja
4/2/2014 | 9:21:28 AM
Re: Time
Very good article - as IT department in banking, you need to embrace the change instead of using the traditional way to deal with new problems. Normally IT department is defined as support function. But the business environment changed so that we need to advance in IT area to boost business growth. In this case, IT department in banks needs to have strong implementation and development capability instead of just doing maintenance work - it needs to drive and exectue changes.
Madhava verma dantuluri
Madhava verma dantuluri,
User Rank: Apprentice
4/2/2014 | 7:10:20 AM
Its time to step up and expand towards change. Good article.
Get Your Enterprise Ready for 5G
Mary E. Shacklett, Mary E. Shacklett,  1/14/2020
Modern App Dev: An Enterprise Guide
Cathleen Gagne, Managing Editor, InformationWeek,  1/5/2020
9 Ways to Improve IT and Operational Efficiencies in 2020
Cynthia Harvey, Freelance Journalist, InformationWeek,  1/2/2020
White Papers
Register for InformationWeek Newsletters
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
Flash Poll