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Richard Bird

Richard Bird

Richard Bird - JPMorgan Chase

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The Unicorn in the Middle Office - What Technology Isn't

20 July 2009  |  3349 views  |  2

As I've been circulating through a number of conversations with banks, financial services technology providers and colleagues in every conceivable sub-branch of the banking family tree these past few weeks, I continue to be both amused and disappointed by the gap between business expectations and technological realities faced in the money-moving industries.

It seems to me that finding business leaders who understand and appreciate technology, as well as technologists who understand and appreciate the nuances of the particular business they serve is simply getting to be a rarer and rarer occassion each day. Business leaders have fallen under the spell of instantaneous gratification, microwave popcorn speediness, Twitter-like nonsensical communication and a complete disregard for the little things; like the laws of physics. On the other side of the proverbial (and what should be non-existent) fence are armies of technologists who spout the latest techno-buzzwords in an attempt to either glamour their business partners into believing anything is possible or to assuage their own personal fears that their jobs are at risk because they support some "old" technology within their company. The interplay between business and technology, within the corporation, has become a battle between an unattainable demand for unfunded technical innovation and a culture hell-bent on job protectionism. Both mindsets are counterproductive.

While I chuckle about it outside of earshot, it is sad that I still hear business executives asking why we "just don't buy a SOA server so we can get SOA up and running now!". Or, having to explain for the hundredth time that instantaneous back-ups between two data centers separated by 680 miles shouldn't be expensive once we figure out how to defeat the constraints of the speed of light. Maybe we install a black hole outside the front door of the data center?

Equally saddening, and often much more troubling, is the continuance of the attitude that I see amongst technologists that "we know what the business needs". It seems, almost daily, that a friend or colleague shares yet another story with me of an entrenched technology organization "deciding" that they know what their business customer needs (without clarifying) and then building a solution that has no relevance to the business' expectations. I still cringe every time I hear a senior level developer say "we don't need requirements, we know what we're doing".

Ultimately, the biggest disconnect between business leaders and their in-house technology leaders is the expectation from the business side that their technologists are "innovators". By failing to see their technology organizations as extensions of their operations function (and by technologists failing to accept that they are fundamentally a part of operations), business leaders ascribe wizardly expectations on their technologists; as if they truly believe that the next iPod, Facebook or Twitter will spontaneously spring forth from their own company to solve their business problems. Corporate technology departments simply are not hot beds of innovation, by design. There is no room in a corporation, other than a software development or services firm, for technology to exist simply for the sake of technology.

Business leaders with no time or inclination to decode how technology actually impacts them, and technologists with no time or inclination to learn the nature of the businesses that they serve. How do you slay the unicorn when the system itself supports the continuation of the mythology?

 

TagsRisk & regulationRetail banking

Comments: (2)

Cedric Pariente
Cedric Pariente - Racine Alpha - Paris | 23 July, 2009, 03:47

Excellent Blog Richard, Thank you for sharing.

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A Finextra member
A Finextra member | 23 July, 2009, 07:44

I recommended this blog as I have also recommended a blog from Stanley Epstein : Business versus Technology a few weeks ago. 

Stanley thinks that the almost self-destructive aspect of the inability of each element (technology and business) to either understand or to apply the skills of the other to create a harmonious whole that melds the technology with the business' requirements and other needs results to many missed opportunities.

To both Richard and Stanley, I would say that you both are preaching to the choir.

From experience, as soon as the business side is presented with a new product or service that requires installing a new system or modification of existing systems, then this new technology is referred to the same company's in-house technologist. Rightly so. . . but rarely have I met an in-house technologist that sees the business value or opportunity presented by the technology provider.

When presenting new systems to in-house technologists, common reactions one would get from them are :

1. Your system requires significant changes to our system, while they tell their business-side that 'we can develop these systems ourselves'.

2. Some technologists would even tell the technology provider (to his face) that their in-house systems already offer the same features, whilst the technology provider becomes confused as he recalls the wide-eyed interest he received from the business side who told him that the systems he presented to the business side offer new features that can definitely bring value to their business.

3. Once you have adequately convinced them (without a shadow of a doubt because you were ready for this objection) how minimal the changes are to their systems and although your systems are already used by consumers elsewhere in the world, they ask out loud if their consumers would bother using the systems, forgetting that the meeting with them was actually initiated by their business side who understood the business benefits of the systems.

4. After the technology provider gently reminds the in-house technologist that their business side saw a lot of business value to the systems being offered and after the technology provider reminds the in-house technologist that the systems presented are patented and/or patent-pending, then in some cases, the in-house technologist then asks exactly what is covered by the patents, most likely to narrow down what it can possibly copy.  (So yes, I agree with Richard's "Corporate Technology departments simply are not hot beds of innovation, by design.)

5. Just to cover the technical issues and to eliminate all technical issues, the technology provider offers to give the in-house technologist a copy of a detailed system implementation documentation, to which the in-house technologist replies that there is no need for him to see this documentation.

6. For the grand finale, the technology provider tells the in-house technologist that he is providing the systems free of charge (software, hardware and licenses) so as to be able to use the financial institution as a reference and as a showcase. The technology provider also offers some equity shares so that the financial institution would benefit from the subsequent banks that would surely follow . . . (yes, the herd mentality).

And the technology provider's last words "Why would a bank (which in essence is not a technology provider) want to spend time and money to develop these patented systems when they are being implemented / integrated for free? The bank can't resell these systems to their competitors, especially since they are patented and with the equity shares being offered, the bank can actually benefit even more. . ."! At this point, the technology provider will get a blank stare from the in-house technologist.

The troubling moments are when these in-house technologists actually take it upon themselves to make the decision for the entire business/financial institution and pass up on these good opportunities!

For most financial institutions, business (not technology) is what brings in the revenues. Businesses need to find a way to properly use their in-house technologists or else hire independent consultants that can properly evaluate business and technology so opportunities are not missed.

 

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job title Vice-President Information Risk Manager
location Columbus
member since 2009
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Seasoned financial services veteran in; information and operations risk management, hedge fund administration, retail bank and treasury operations, commodities trading and M&A due diligence.

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