With demand surging for its online payment and loyalty services, Alliance Data Systems (ADS) decided in late 2018 that the time was right to move its on-premises financial applications systems to run on Oracle Cloud Infrastructure (OCI). The first payoff of that cloud shift will come from tasks processing 25% faster and costs falling 40% over the next three years.
The second payoff will come from ADS’s IT teams spending a lot less time managing data center hardware. ADS will groom those IT pros to become strategic cloud advisors, and to help with that effort, the company is looking to bring in new innovations, such as the autonomous database technology the team is currently testing.
“We want our staff to be strategic cloud advisors who are constantly looking higher up the OCI stack, helping us identify and test each new service, and then determine which ones are right for our business,” says Edwin Flores, ADS tools and automation engineering manager.
Flores shared ADS’s cloud architecture strategy with Oracle Cloud engineering manager, Rachel Smith, in the premier edition of Built and Deployed, a video series that explores the systems architecture that Oracle’s customers have built and deployed in OCI.
See the full conversation with Flores and the ADS technology team below.
Founded in 1983 and headquartered in Columbus, Ohio, ADS has grown into an $8 billion loyalty marketing and payment solution company. ADS provides some of the world’s largest online retailers with transaction data processing and analytics from online payment platforms, including private-label credit cards and “buy now, pay later” services.
The company spent decades running Oracle Databases and customizing Oracle’s PeopleSoft and Hyperion applications on-premises, but by 2018, the company faced an inflection point. “We were at a crossroads of whether to renew our data center and hardware leases—and continue absorbing the spiraling costs to maintain and upgrade them for years to come—or try something different,” Flores says.
After seeing retailers, such as Wayfair, Sephora, and Williams-Sonoma, move their businesses to the cloud, Flores’ team decided it was time for them to consider the shift, too. So they held a “cloud migration discovery” session with Oracle.
“The conversation quickly moved from discovery, to forecasted cost savings, to the decision to move our ERP applications from on-premises to Oracle Cloud Infrastructure,” he says.
With OCI now in place, those savings are adding up. Since the company began running PeopleSoft and Hyperion on OCI, it’s been able to run jobs 25% faster and expects to cut 40% of its costs over the next three years. “We used to invest 50% of our total IT spend on fixed assets that sometimes sat idle,” Flores says. But with Oracle’s pay-as-you-go pricing and universal cloud credits, “we’re only spending money on resources that we actually use.”
For two decades, ADS has used PeopleSoft and Hyperion to manage the company’s financials and the careers of its 20,000 employees worldwide. “PeopleSoft and Hyperion have been the backbones of our business,” Flores says. Moving ADS’s vital order-to-cash, procure-to-pay, and financial reporting data to the cloud required a multitier topology that was architected with extreme security in mind.
For example, by isolating the application servers, load balancers, and databases into separate partitions within the virtual cloud network (subnets) on OCI, ADS could quickly create tier-specific network security policies, such as multifactor authentication, role-based access management, and data encryption. “From the time a user requests access to a report in PeopleSoft, to when the data travels from the database, to the load balancer, to the web server, and to the browser, OCI provides both at-rest and in-transit encryption every step of the way,” says Bhargav Thudi, ADS manager of enterprise architecture.
ADS uses PeopleSoft to manage its general ledger accounting and Hyperion Planning and Oracle Essbase to run forecasting, planning, and budgeting. Because of the key role PeopleSoft and Hyperion each play around the company’s financial data, it’s important that they are always in sync and available. “Running on OCI virtual servers gives us so much more fault tolerance than when we ran these workloads on physical servers,” says Brad Griffith, Hyperion architect at ADS. “If one server goes down, we’re able to spin up a new one within seconds. All we do is just get that D drive back up, attach it to that server, bring it into the network with the new server name, and bam, we’ve got a new server. You can’t do that when you’re running these applications on a physical server sitting in a data center somewhere.”
ADS has saved more than $1 million since it went live in late 2018, and has since moved 60 terabytes of data to the cloud. But that’s just the tip of the iceberg of value ADS expects. “We’re now taking those savings and investing them into more of the services OCI has to offer,” Flores says.
Some of the new services Flores’ infrastructure team is testing include Oracle Autonomous Database for both transaction processing and data warehousing. “A lot of what we’re doing now is infrastructure as a service. But that still requires our DBAs and engineers to manage the VMs, patch our databases, and secure our vulnerabilities,” Flores says. “With autonomous, all that administration goes away.”
Instead of database administration, ADS expects new technology ideas and closer collaboration with business partners. “That’s our goal, and that’s what we’re working toward,” Flores says.