by Elizabeth M. Ferrarini

Based in Dallas, Texas, Drive Financial is one of the country's fastest automotive finance companies in the U.S. It has a $3.5 billion sub-prime portfolio originated from more than 12,000 automotive dealers in 32 states. The company's incredible growth prompted the Bank of Scotland to buy Drive Financial in the early 2000s. After several years, the Bank of Scotland sold the company to Banco Santander Central Hispano, one the seventh largest for-profit banks in the world. Drive Financial is Santander's first privately held North American venture.

Don Goin, a veteran IT professional, joined Drive Financial in 2003. He says, "IT had grown piecemeal, with no strategy. It had some significant IT investments and some good people, but no focus towards a business plan. Multiple disparate technologies from multiple vendors comprised everything from the IT infrastructure, to application development. The company also lacked an IT governance model, and also had no continual renewal IT investments."

Recently Enterpriseleadership.org spoke with Don Goin about how he aggressively brought structure, stability, a strategic direction, and agility and efficiency to the IT organization. Here's what he had to say:

EL: How did your background differ from that of other Drive Financial  CIOs?

DG: Prior CIOs came out of the business units and had a desktop focus, rather than an enterprise focus. That perspective changes the way you operate. The company needed to make drastic changes to move to primetime. It also needed a level of competency it couldn't get out of that strategy, or lack of strategy. I've held IT enterprise positions at Southwest Airlines, Raytheon E-Systems, and IONA Technologies.

EL: What type of a governance model did you put in  place?

DG: We call it a federated model. Because an international bank owns the majority of the company, we have linkages into the bank's group IT organization. This model looks like a pyramid. The top level comes from the group. Here we have top-down flow of policies and directive controls for information security.

The second level has a hybrid control structure where we take directives from the group bank and tailor them. For example, where laws and regulations differ locally in the U.S., we have generic standards that might say, “you can't encrypt non-public personal information.”

The third level focuses on specialized local controls. We have local tech standards that specify what technology we use, and how it is implied and implemented.

EL: What best practices do you have in place to bring a level of  competency to IT?

DG: We have carried out the IT Infrastructure Library (ITIL). We also follow ISO 717799 for security. Meanwhile, we're looking at CobIT as an umbrella framework to plug into ITIL and ISO.

The ITIL service support processes we use include change management, configuration management, problem management, and incident management. For ITIL service delivery, we use release management. Right now, we're trying to get better reporting and metrics on release management.

We looked at the Balanced Scorecard for carrying out our IT strategy, but we decided it was more than what we needed. Instead, we've developed some simple scorecard metrics.

EL: Why did you decide to go with ITL?

DG: We heard about it through the Bank of Scotland. ITIL is a mature IT framework adopted by many European companies. The more we looked at outsourcing, the more we ran into ITIL. We looked at it with respect to the Microsoft Operations Framework and a few other ones.

We also felt most comfortable with ITIL at an enterprise level. We first applied ITIL to our help desk platform. Next, we went with problem management, incident management, and then quickly adopted change management.

We incorporated some of the ITIL service desk functions into our collections call center. Our internal service desk, which is based on ITIL, manages problems, incidents and escalations, and technical aspects of the call center.

Our data center outsourcing partner enables us to link to configuration  management.

EL: How did you align your business strategy with IT?

DG: In IT circles, everyone talks about the problem IT has with aligning with the business strategy. We had a nice chance not to align with the business, but to be part of the business and create the business strategy. It changed the flavor of what we're able to do.

We can execute strategy very closely with the business. Once we set the plan for growth, we knew what we needed to do to go to market. We set out to build the systems platform, and the customer applications we needed to push our growth. We also had seasonable constraints and cost constraints. Adopting governance was also important. We had less than a year to get to market with new originations platforms. We pulled it off. The team I assembled is still with me. We have a very low attrition rate in IT.

EL: Why did you decide to outsource your IT infrastructure?

DG: We had a data center with some redundancy. We lacked a backup power facility. We looked at building a data center at a co-location service; however, that strategy looked like it might be troublesome in our time window. We were looking for economies of scale, a tie to best practices, such as ITIL, and a competent IT team we didn't have to hire.

We ruled out large outsourcing companies because we weren't large enough to influence them to maintain our agility. We were growing and changing; my job has been different every six months. We decided to go with Data Return, a mid-size IT managed services firm, which we felt could respond quickly to our needs. Data Return's co-location arrangement with Level 3 Communications provides a good footprint for an international data center. We also selected Data Return because of the competent people we didn't have to hire, and the 24x7 network operations, and network support. This support extends to monitoring and to alerting our customer applications, and carrying out call control procedures between us and the business partners.

Our internal IT team concentrates on project management, business analysis,  custom software development, and help desk.

EL: What cost savings have you experienced with Data Return?

DG: We own the equipment at Data Return. However, we've saved about 17 percent on IT costs per year. Immediately after we signed the Data Return agreement, we grew faster than expected. Over time, we've gotten more out of the relationship at a competitive price point.

We link into Data Return's operation processes from an ITL perspective.

EL: Did you engage in other outsourcing arrangements?

DG: We outsourced accounts payable because we didn't want to spend a lot of time opening envelopes and processing invoices. When it comes to IT, we have an arrangement with ACS to manage our loan servicing application. ACS provides the OS/390 that the application runs on. US Internetworking manages our PeopleSoft ERP platform.

When I started at Drive Financial, we had a small team of PeopleSoft developers. If we were going to manage this application internally, we knew we would need to train the team continually and to keep up to date on all aspects of PeopleSoft. We decided it was more cost effective to go with a company that manages PeopleSoft for many companies. We've had a great USI.

EL: Did you out outsource your help desk?

DG: Many of the CIOs I've met through professional associations say you outsource most of your IT infrastructure, but you need to keep your help desk inside the company. Some of these CIOs said outsourced help desks weren't responsive and didn't understand the business. We've always considered our help desk points to be the touch points for our organization, and we knew we couldn't outsource these important touch points.

Each year, when I do the IT survey, people always praise the service they get from the help desk. We decided to keep these folks within our value system and operating within the team.

EL: What initiatives have helped to make the organization more  competitive?

DG: We have a common application development framework that underpins our major business functions. That platform allows us to bring a services layer approach across multiple lines of business. This capability enables us to drastically improve our time to market.

Compared to our competitors, we pay less for each pre-originated loan. Specifically, we can make more money per loan, and can go to market faster with things like credit policy, pricing procedures, any marketing initiatives.

Our standard computing platform enables us to handle the 100-percent increase in loan volume we experienced in 2006. We raised the watermarks, and alerts on our monitoring tools.

Part of the new strategy called for standard platforms, such as Hewlett Packard, for everything from data storage to thin clients; Cisco for the network; and Microsoft OS for servers and desktops. Outsourcing handles the rest.

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Elizabeth M.  Ferrarini is a freelance technology writer based in Boston,  Massachusetts.