A Case Study Presented by Group 2 Team Members:

Anamitra Chanda, Arup K Pyne, Debal Chanda, Debdatto Das, Raja Ray, Sourav K Samanta
With the alcohol Prohibitions repeal post Twenty-First
amendment, most states in US mandated a strict 3-
tier Regulatory system that separated the roles of
manufacturer, wholesale distributor, and retailer.
For purposes of tax auditing, wholesalers were
required to report alcohol sales within specified
timeframes.

Non-compliance could result in suspended or

cancelled permits, administrative action by a state
Alcohol and Beverage Commission, and other civil or
criminal penalties.
Fintech, a Tampa-based privately owned financial technology company in
the business of processing electronic payments for wholesale distributors
and retailers of alcoholic beverages, was founded in 1991 with the launch
of its Electronic Fund Transfer Payment System (EFTPS).
As of 2016, Fintech supported more than $24 billion in payments per year
with its EFTPS processing about 1.5 million alcohol transactions per day.
Whenever a participating wholesaler delivered alcohol to a retailer, a
transaction was recorded in EFTPS. Fintech guaranteed to process
payments on time and in compliance with applicable state and federal
regulations.
A typical EFTPS-supported transaction process included the following steps:

1. Wholesaler delivers alcohol to retailer.

2. Using EFTPS wholesaler creates and delivers invoice to retailer.

3. Retailer receives invoice and authorizes payment.

4. Fintech withdraws funds from retailer account and electronically transfers payment to
wholesaler within the required time period. If there are insufficient funds in the retailer
account, Fintech pays the amount due wholesaler (and retailer subsequently pays
Fintech).

5. Wholesaler reports this Sale of Alcohol to Retailer by required date.

As CIO, Kwo managed an IT department comprised of employees with varied technical backgrounds and skill sets
and was pretty confident that his staff had the expertise to support a fully functional IT infrastructure, and capable
of administering a variety of IT solutions for Fintech.

“Technologically, almost anything is possible … Use business sense and common sense while looking at it
quantitatively as well as qualitatively.” - Joe Kwo

 Network Administration
 Security
 Project Management
 Analytical Report Development
 Software Support
At Fintech, both proprietary software and locally customized packaged software were used, including many Microsoft
products (such as Excel, SQL Server Management Studio, SQL Server Data Tools, and Visual Studio). Several employees
had extensive relational database experience and used Microsoft SQL Server and Oracle database.

Fintech developers used an Integrated Development Environment (IDE) based on Visual Studio for some projects, and
the open-source Eclipse IDE for Java applications.
Cloud services have become ubiquitous across a spectrum of industries. The number of firms moving or expanding their
infrastructure using cloud technology only continues to rise.
• Companies can outsource a costly and hard to maintain IT department to experts who are able to provide better
features at a lower price.
• An organization could rent a cloud service instead of making heavy up-front investments in computers and software.
• Scalability – Cloud Services provide the option of “pay-as-you-go”, i.e. organizations can scale up the requirement of
services anytime as per the business needs and pay accordingly.
Although EFTPS had successfully handled
increased payment transactions in the past
several years, as Fintech’s customer base grew,
it meant more transactions with dramatically
increased data volume.

A cloud-based solution should easily and cost-

effectively scale as needed.
Gartner, an IT research advisory company, showed the different aspects of cloud computing in their branded Hype Cycle:

• SaaS approaching the Plateau of Productivity

• IaaS was at the Slope of Enlightenment

• PaaS was on its way down the Trough of

Disillusionment

• “Cloud Computing” was at the bottom of the

Trough of Disillusionment

Being at the Slope of Enlightenment is a time

when more second and third generation
products appear, and when the technology
becomes widely understood.
While considering the benefits of Cloud Services, there were certain challenges as well:

• Cloud Data Security: Fintech deals with sensitive financial data for electronic payments across the alcohol and
beverage industry. There are around 12 security concerns in the cloud-
 Data breaches
 Compromised credentials and broken authentication
 Hacked interfaces and API’s
 Exploited system vulnerabilities
 Account hijacking
 Malicious insiders
 The APT (Advanced Persistent Threats) “parasite”
 Permanent data loss
 Inadequate diligence
 Cloud service abuses
 DoS (Denial of Service) attacks
 Shared technology, shared dangers
Joe Kwo along with David Nolte (Director of IT and Enterprise Data) assigned a consultant who had worked on several
Fintech projects for evaluating the potential cloud service providers.

After comparing the performance among eight critical capabilities around 15 cloud service providers, Kwo and his
consultant shortlisted the top three cloud services providers focusing on the two critical capabilities for Fintech, i.e.
Batch Computing and Cloud-Native Applications :

 Amazon Web Services

 Google Cloud Platform

 Microsoft Azure

Forrester indicates Amazon and Microsoft are Leaders in the public cloud
platform category, while Google is a Strong Performer
Amazon, Google and Microsoft had good reputations for offering strong cloud services and support.

Project goals included finding a company that met the following criteria:

• Economic viability (including initial price, cost of ownership, consumption)

• Technical factors (Compatibility, support with current infrastructure, scalability)

• Human factors (accessibility, ease of use for clients and current IT workforce)

• Security (uptime, strong controls on data management)

Nolte’s team was undertaking an evaluation of the cloud providers’ offerings from several perspectives:

• Training - Find out what training each provider offered, and whether trainers were locally available.
• System Administration Support – Fintech IT staff would administer and maintain the cloud-based solution. How
would each provider help to ensure this important capability?
• Customer Support –Customer support would be supplied either by local IT staff or a service provider. Either way,
customer support needed to be timely and at the highest professional standard.
• Data and System Availability – Ease of clients’ access to their authorized data (subject to confidentiality
restrictions) and high system availability (“up-time”) were key requirements.
• Security – Fintech had a solid history of providing secure access to its proprietary data, and Kwo did not want to
jeopardize that good reputation. Fintech needed to be able to control and provision the data, based on each client’s
needs and requirements.
• Programmability - Fintech would apply proprietary algorithms to the data as it was processed in the cloud. Testing
and implementing these algorithms – whether by local IT staff or consultants –needed to adhere to very detailed
specifications.
In this first cloud initiative, instead of moving the EFTPS system directly to the cloud; only a copy of the data generated by
EFTPS generates. This will help in the testing of a cloud service, and can be executed in a controlled way, rolling it out a
few clients at a time.

• Extract

• Load, Stage, Process

• Release
Kwo and his IT team further carried out the analysis by reviewing the information on each provider’s website and
running a test of each service based on the following Use Case:

Step1: This step was common to all the 3 service providers. Visual Studio and SQL Server Data Tools were used to
create a SQL Server Integration Services Package (SSIS) which would be scheduled as a daily batch job to extract data
from the local Fintech Oracle Data Warehouse using an Oracle ODBC (Open Database Connectivity) driver.

Observations:
 More expensive than Amazon and Google but cheaper in terms of application re-development cost.
 Difficult to customize the configuration, so had to rely on Microsoft’s pre-configured options.
 In-memory database optimizing the overall performance.
Rating:

1 5 2 3 3 4
Cost Compatibility Customize Accessibility Security Performance
Observations:
 Cost was lower than Microsoft Azure and about the same as AWS.
 Configuration was flexible and easy to customize.
 Pricing is extremely flexible, offering discount with increased volume.

Rating:

4 4 4 3 3 4
Cost Compatibility Customize Accessibility Security Performance
Observations:
 Set Up Cost was lower than Microsoft Azure and Google Cloud Platform.
 AWS Redshift database is specialized for data warehousing offering persuasive evidence in case studies on Nokia,
Coinbase, FINRA, and NTT Docomo.
 Configuration was flexible and easy to customize.
 Offers a lower support cost than Google and Microsoft although they all offer similar support.

Rating:

5 4 4 4 4 5

Cost Compatibility Customize Accessibility Security Performance

Comparison of Cloud Services Providers: Basic Service Features
Comparison of Cloud Services Providers:
Basic Service Features
Comparison of Cloud Services Providers:
Technical Considerations
Comparison of Cloud Services Providers:
Monthly Price Estimates
After performing analysis on the Use Case, its time for Kwo to take the final call. In this current scenario,
a weighted analysis method can be used to determine which cloud service provider to choose.
Using this model, each criteria (cost, customize/fleixibility, accessibility, security, performance) is
given a multiplier based on how much they weigh in importance to Fintech’s overall strategy.

 Cost was given a high multiplier due to the “pay-as-you-go” nature of

cloud services.
 Compatibility was given a relatively low multiplier of 2 because of Kwo
currently has a fully equipped IT team and redeveloping applications wont
be a challenge.
 Customizing Options / Flexibility was given a weight of 3 so that the team
can modify the applications as per the business requirements in future.
 Accessibility was given the higher multiplier of 4 because it is a measure
of how easy the cloud solution is for the client to use.
 Security has been identified as a top concern for cloud computing-
Uptime, integrity of data, and data cloud security were top concerns for
Fintech.
 Performance also plays a key role in maintaining the customer’s
expectations
After being assigned the multiplier, each provider is given a rating from 0 to 5 based on how well they
meet the criteria as seen during the Use Case Analysis. The multiplier and rating are then multiplied to
calculate a score for the category.

Finally, the sum of the scores is found, and the company with the highest
points is chosen as a recommended provider.
As per the ratings and score generated after doing a weighted analysis, Amazon Web Services can be considered as the
best match for Fintech’s criteria. The main leading factors include:

 Cost and Performance - Amazon Web Services was deemed to be the best financial decision, with a total cost of
$1,638 a month for Fintech’s requirements. AWS was $46 cheaper than Google Cloud Platform, and $5,663 cheaper
than Microsoft Azure. Despite being less expensive per month, AWS still offered competitive services, storage space,
and computational power when compared to the more expensive Microsoft Azure. Moreover AWS Redshift was
termed as the leading service provider in data warehouse. AWS also has the added benefit of having no long-term
contracts and only billing for services used, as opposed to a flat rate. For this reason, AWS receives the highest score
in of 5 in Cost and Performance Section.

 Accessibility and Flexibility - Forrester Wave has ranked Amazon Web Services as the leader in Cloud Platforms for Q4
’14 and is also very flexible, offering flexible pricing, scalability and data storage services. For this reason, Amazon
Web Services scores the highest score of a 4.

 Security - Of the 3 top contenders, Amazon Web Services offers the largest amount of security features, with a
number slightly higher than Google, and significantly higher than Microsoft. For this reason, AWS has received the
highest score of 4.
Cheers to everyone that navigated this company into the revolutionary alcohol
solution it’s become and to all who continue to carry the torch.
- Scott Riley, Fintech CEO