For the past several years, being a successful CIO meant having the biggest, sharpest axe in the forest. CIOs who could most ably wield cost-cutting tools were admired and highly sought after. Well, those days are coming to an end. The best CIOs of today and tomorrow will innovate and help their firms grow again, this time through more efficient (and now, cost-effective) deployment of technology.
Until earlier this year, seemingly every IT project had been correlated with cost-cutting, straight-through processing or another efficiency-related theme. Now, securities and investment firms see in the improving economy a chance to deploy new technology to grow the top line while maintaining bottom-line certainty. The combination of this economic optimism, firms' successful investments in efficiency controls and institutions' needs to challenge their technologists with more exciting projects has driven securities firms to pursue projects that will add new value to the equation.
This phenomenon is occurring consistently throughout Wall Street, where innovative technology is prominent in the products, processes and service models of the top-tier companies. It's not only adding much-needed energy to IT departments that are fearful of budget cuts, but this infusion of creativity is also stimulating differentiation among competitors.
Technology innovators are embracing new technologies, not to be the ones with the latest toys, but to bring greater efficiency and capability at a lower cost than before. These technologies include VoIP, grid computing and blade servers, as well as some of the "grande old dames" of emerging technology, such Web services, Linux and XML. Each of these new "new technologies" have one thing in common: contrary to the emerging technologies of yore, they all achieve some sort of cost efficiency, either by replacing older technology at a much lower cost (e.g., blade servers for mega-servers), or by wringing greater efficiency out of manual processes by automating them - and eliminating personnel in the process.
Business leaders are getting more innovative in how they deploy technology, not just the kinds of technologies they deploy. Perhaps the most relevant example is the increased use of smart sourcing (formerly known as offshore outsourcing). CIOs have leveraged the low-cost, high-quality resources available in overseas theaters to bolster their development and support efforts. By selectively outsourcing non-competitive, standard tasks, CIOs have freed up budget money to spend on more strategic projects, such as new product launches and even "skunk works" projects, which can deliver tremendous benefits to the firm, once proven out and deployed.