Crisis, lag, rebound. Crisis ... lag ... rebound
No, this isn't the chant of an aerobics instructor. Rather, it's the all-too-familiar cycle of the markets and our economy. The recovery that followed the financial crisis and subsequent recession that began in 2008 barely had taken hold before the European debt crisis and the political train wreck over the U.S. debt ceiling derailed any hope for a widespread recovery.
The "recovery" in the financial services space certainly was short lived. After a few consecutive quarters of record profits in 2009 and early 2010, revenue streams dried up as trading volumes plunged. And the swings in financial services business fortune, as always, translate to the job markets. Wall Street firms that cut staff after the 2008 crisis and hired (modestly) during the 2009-2010 recovery have quickly started to shed jobs again.
During this period of upheaval, however, Wall Street CIOs have been expected to maintain a long-term outlook and stick to their three- and five-year technology plans. Most technology plans that were in place in September 2008, however, did not account for the credit crisis. And in September 2009, as the short-lived recovery began, a long-term technology plan would have included an increase in head count, as would a plan created in 2010. But now, three years removed from the financial crisis, any long-term technology strategy would have to include either a reduction in head count or, at best, a budget that assumes a stable level of available resources.
With an economic outlook that shifts as quickly as the seasons, how are CIOs supposed to build long-term technology plans that both address a firm's current business needs as well as create a technology foundation that can accommodate future growth opportunities? It's a difficult mandate, but it is one that all business and technology leaders face. Building an efficient technology organization that can ramp up quickly (or cut back just as quickly) is one of the only ways that a technology executive can plan for these rapid boom and bust cycles. As a result, CIOs are taking advantage of cloud technology to reduce costs and increase flexibility. They also are relying more on external vendors for services. These trends have been growing for a few years, but now they seem to have escalated to the point of becoming best practices.
In fact, efficiency, innovation and managing during crises are some of the themes that are highlighted in the profiles of this year's Gold Book honorees. These CIOs don't have all the answers -- they admit that they, too, are learning as they go. But as they try new ideas, technologies and strategies, they are building a technology foundation at their respective firms that can respond to business demands as quickly as they change.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