Once a deployment is launched, users will very quickly and naturally test out those parts of the deployment that affect them the most and come to a conclusion as to whether their lives will be easier as a result. Their enthusiasm rapidly decreases with time as the benefits of the deployment are quickly assimilated into their day-to-day activities. In a similar vein, developers have a longer time horizon, often starting at six months and sometimes going out as far as two or three years depending on the size of the team, whether they're working in the retail or wholesale sector and where the next project is coming from.
They have a better grasp of the strategic benefits of technology not least because it is in their interests to do so. However, their vision of value is sometimes clouded by the fact that their work often continues beyond the first deployment phase into maintenance and support issues. With several projects in different stages contemporaneously in most financial firms, this causes a lattice effect which can make it difficult for developers to see the truly big picture. The commissioners here have the most complex pattern of all. If they are effective at their level, they will have a time horizon stretching out starting at a year and often going as far as ten to fifteen years. No-one is saying that they know the future that far ahead. At fifteen years out, the value delivery is cumulative on too many factors in between including the market changes that will have occurred.
But in technology one thing is very very clear. Convergence is occurring in all areas of financial services. This is occurring at the market level where the large players are rapidly taking over the smaller; and at the technological level where deployments must use disruptive technologies more and more to survive. One of the key facets of disruptive technologies is that they are often visible as either an agglomerated platform or as agglomerated hardware. I've drawn the commissioner curve deliberately with multiple peaks, to make two points. First, any given deployment is likely to deliver value in a non-continuous way. Second, most commissioning bodies either don't perceive the multiple value delivery or don't take account of it in their assessments. So, after we have established how to assess value delivery inside the deployment and we have established some of the complicating factors surrounding post-deployment assessment of value, we are left with the question ‘what is value?'.
Well, I think we've established that value means different things to different people within an organisation. The only view left not discussed is the view from the organisation's perspective. In that regard, the shareholders represent that view since they ‘are' the organisation. Undoubtedly, not many practitioners include share value into their calculations, but ultimately this is the only market by which the company is measured in the market. All other activities connect together to create that value - its people, its products and... its technology.
I consulted for a major financial institution recently to help their management understand and implement technology systems to deal with the Sarbanes-Oxley Act. While they weren't a US firm they had figured out that the fact their shares were listed on the NYSE and that their global operations fell under the remit of the US act. During the project we discussed what constituted a ‘reportable event', that is an event which, if not reported, had the potential to lead to a misstatement of the financial health of the organisation to the market.
The Act requires ‘timely reporting' and ‘appropriate response'; so while a minor error could be reported up the normal chain of command and meet the terms of the act; a serious issue would require a direct communication with a C-level executive, usually CEO and/or CFO missing out the intervening command chain. The Act also requires assessment by auditors of the strength of controls in the organisation to identify, prevent or cure any given issue. In this case, the firm had appointed someone with only six months experience in the business, to be responsible for stock control in the vault - in which were £3 billion in bearer bonds. During the consult, this person admitted to having ‘lost' the bonds for three days. They were showing on the stock record as being in the vault, but they weren't there.
The person had not informed anyone else, but searched the communication chain in a low-level way to try to find them again. This was successful. The point, unfortunately, was that (i) the stock control was clearly not good enough - no value delivery there; (ii) the person concerned, given the size of the issue, should have reported directly to the CEO within ten minutes and (iii) without a grounding in both regulatory issues, systems and management, this issue would have been swept under the carpet. The point of this anecdote is that because this organisation had no concept of value delivery nor of its measurement, they placed their firm in a position where the share value would have been affected.
Barings, Northern Rock and Societe Generale all stand as testament to what can happen when you think you have good technology in place, but don't continually question its value.
Our website is not responsible for the information contained by this article. Articleinput.com is a free articles resource thus practically any visitor can submit an article. However if you notice any copyrighted material, please contact us and we will remove the article(s) in discussion right away.
Note: This article was sent to us by: Harriet K. Porter at 01032010
1. Technology projects and firm resources
© 2009 ArticleInput.com.