Tags Strategy, Growth, Collaboration

Building blocks

Creating an IT architecture that enables Travelex to bring new services to market ahead of its competitors has helped the foreign currency exchange specialist become the leader in its market, discovers Victoria Furness.

Professional, determined and competitive – these are the values that led Travelex, the world’s largest foreign exchange specialist, to choose England rugby international player and world champion, Jonny Wilkinson, as its latest brand ambassador.

Speaking at the time of the announcement, Lloyd Dorfman, the founder, chairman and CEO of Travelex, said: “He is a world class player, renowned for his professionalism, determination and relentless dedication to excellence and, as such, is the perfect fit for Travelex. In its 27-year history, Travelex has overcome numerous challenges, and our persistence and determination have ensured that we have always been competitive. Like Jonny, we hate to be beaten.”

Dorfman credits these values with helping Travelex expand at a phenomenal rate, from a small bureau de change in the seventies to a global organisation with offices in 38 countries and serving more than 29 million customers each year. It was the only company to maintain its position in the top 40 fastest growing private companies in the UK in The Sunday Times’ “Profit Track 100” from 2000 to 2004.

Dorfman has since relinquished his majority stake to private equity investment firm, Apax Partners – who valued the privately owned Travelex at more than £1bn. Apax now owns 48 per cent and Dorfman 30 per cent. Private equity house 3i is also a shareholder with seven per cent and Standard Chartered Bank bought a six per cent stake in April.

Keeping the spirit

Unlike most companies making the transition from a small to medium-size business, Travelex has maintained its entrepreneurial spirit throughout its growth. It’s one of the few companies that has remained committed to the values that made it successful in the first place.

For instance, decisions within Travelex are still made by a close-knit set of individuals, enabling it to respond faster to customer demands. Group marketing decisions are taken by Travelex’s marketing department – consisting of one: Anthony Wagerman, head of group marketing – and Dorfman. Similarly, Travelex continues to encourage creativity and innovation from its staff.

“We pride ourselves on being a very dynamic and entrepreneurial organisation,” explains Gareth Richards, applications development director at Travelex. “We’re constantly looking for new opportunities and then want to be in a position to react very quickly and take advantage of these opportunities.”

“The owner and key people in the organisation are pretty close culturally, so they’re used to saying, ‘I’ve had an idea’, then taking that idea to IT and expecting them to deliver,” adds Adrian Lowther, on-demand middleware advisor at IBM Business Partner, Osmosis Integration, which has been working with Travelex for four years.

Such an approach requires a flexible IT infrastructure that can respond quickly to new demands. Concepts such as a Service Oriented Architecture (SOA), which breaks down an organisation’s IT infrastructure into a set of re-usable “building blocks”, and open standards, which enable organisations to share information or applications more easily across different platforms, make it easier for companies such as Travelex to develop new services and, crucially, bring them to market faster.

“We offer a service to our customers that is very personalised and, therefore, it’s vital we have the ability to change the applications to suit those customers’ demands,” explains Travelex’s Richards. This means the company must be able to improve the functionality of any application while also integrating it into their back-office systems.

Osmosis Integration has been working with Travelex to create a more flexible, forward looking IT environment: “We began to explore how IBM software could be used to streamline things, to provide Travelex with an application development environment that would let them build reusable components and integrate all of those components at a lower cost,” says Osmosis’ Lowther.

Although Travelex’s heritage lies in retail foreign exchange, it has expanded to offer commercial foreign exchange – including foreign exchange dealing, payment and collection services, risk solutions and outsourcing – to corporate customers as well.

To take this new area of its business even further and offer its corporate customers a personalised service that would distinguish it from rival suppliers in this market, Travelex needed a corporate foreign exchange application that would give customers access to their payments and collections easily, wherever they were based in the world.

The challenge, however, was overcoming the limitations of the existing IT systems. Peter Beuken, head of IT for commercial foreign exchange and dealing operations, explains: “In an organisation like Travelex, which has grown big very quickly, you inherit a lot of legacy applications written in different programming languages with different interfaces and capabilities. To bring them together and give the business a seamless service is very hard when they are all on… different platforms and in different places.

“Osmosis gave Travelex the input and direction to let us develop a fully integrated, flexible open architecture system using the latest tools and techniques from IBM,” continues Beuken. “FXPaynet [the Travelex commercial foreign exchange system] is a state-of-the-art Web-based application that lets businesses conduct their foreign exchange transactions over the Internet wherever and whenever they have the need to do so.”

Looking ahead

FXPaynet has been built with the concept of SOA in mind. This means that any applications built in the future can re-use components of the corporate foreign exchange application, shortening the development period and time taken to bring new services to market. Ultimately, it means that Travelex can expand its operations faster, ahead of its competitors.

“We encouraged them to look a little wider and build an environment where they build once, but can re-use twice,” says Osmosis’ Lowther. However, shifting Travelex’s entire IT infrastructure to SOA wasn’t going to happen overnight. There are still a few knots to work out – for example, Travelex relies on different rate engines to calculate various rates across applications, when one could be shared across applications – but Travelex certainly recognises the virtue in having an adaptable and re-usable development environment.

Osmosis has also worked with Travelex on other areas of its business to create a robust IT platform for future growth.

“We identified three areas where IBM software would be appropriate: integration of their applications and financial applications, for which we proposed some of the WebSphere business integration portfolio; the development environment, which really covered WebSphere and Rational tooling for a distributed development environment; and latterly for security and Web monitoring, we proposed some of the Tivoli portfolio,” explains Lowther.

At a later stage, Travelex also deployed IBM’s DB2 software to support its antimony laundering initiatives.

“[These options] allow us to innovate, adapt and react far more quickly than our competition,” says Travelex’s Richards, which leans that the company can stay competitive as it grows and retain the values that remain at its core.

“We have seen the business evolve where they still respond to an idea, but they do it in a better way,” sums up Osmosis’ Lowther.

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