Read more from WS&T's expert roundtable on the challenges CIO's face in 2009.
WS&T: In light of all of the changes in the marketplace, how has the role of the CIO changed?
Rob Hegarty, TowerGroup: It changes on two levels. On a long-term, strategic level, technologists [should] have a good, solid understanding of the business -- it is to the point now where it is almost more important to have a good understanding of the business, because you can always hire good technology folks. We are also going to continue to see the CIO become more of a strategic partner in a lot of the firms that rely on technology. There are two types of CIOs: those who are board-level, making executive decisions and part of the long-term strategic plan; and those who are really looked at as more of a utility.
On the other side, with what has happened in the last eight weeks in the crisis and the volatility in the marketplace, it has become critical for CIOs to do crisis management -- I'm probably overstating the obvious -- how they operate tactically and how they make quick decisions from a budgetary standpoint. I've met recently with some firms that are going through the budgeting process right now, and [the CIOs] are being whipsawed in a lot of ways. How they respond to this kind of environment in terms of budget reallocations and cuts, as well as how [they] handle the increasing volumes and volatility we have seen -- ... being a tactical operator is very important.
Robert Iati, TABB Group: CIOs will have greater challenges because there are fewer resources for them to play with. We have overall U.S. technology spending, on the investment banking side of the business, down about 20 percent in 2009 from 2008. And in the three years beyond 2009, maybe low-single-digit growth or maybe not even that. So what that does to a CIO is take 20 percent of the budget out, and that manifests itself in fewer staff, less discretionary spend on things such as new HPC [high-performance-computing] servers and the latest quad-core chip sets, and it changes the success factors of the CIO, because there are no longer the kinds of resources available so they can innovate. And every CIO is looking for some kind of innovative technology and work to do. So instead they have to go an extra year with the older servers and squeeze performance out of two- or three-year-old servers ... and at the same time reduce latency on the trading side of the business.
On top of that, the CIOs are all capable. But I don't know if any of them have been CIO at an investment bank through any kind of downturn. If they haven't lasted more than seven or eight years as a CIO, they haven't seen this kind of environment. The kind of environment they have worked in is where they have been given the resources and the mandate to be innovative. Now they are provided fewer resources, and they have been given the mandate to be efficient. That is the greatest challenge to the CIOs.Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio