July 2012: People Power

Technology is important to our industry. Remove it, and pretty much everything grinds to a halt. But that doesn’t mean that other things aren’t similarly important. Take, for example, people and their relationships. They are crucial to maintaining harmony within large parts of any financial services firm.

Relationships come in many shapes and forms: There’s the relationship a CIO has with the rest of the organization; there’s the relationship portfolio managers have with their traders, tasked with executing orders according to various parameters; and then there’s the chief risk officer, who has—often tepid—relationships with large numbers of people from a variety of departments within the organization. Compliance managers are also important, and so is the quality of the relationships they maintain internally, primarily with front-office staff, and externally with trustees representing institutional investors, and, of course, the industry’s regulators.

And then there’s the CTO, who touches the lives of just about everyone in the organization, directly or indirectly, on a daily basis. But perhaps the most crucial relationships that any organization has to maintain are those between the CTO and the firm’s ensemble of technology providers—partnerships that tend to have a direct bearing on the effectiveness and optimization of whatever technology has been selected and implemented.

In his feature, What Lies Beneath, Steve Dew-Jones considers the variables that CTOs contemplate when evaluating technology providers during a typical beauty contest. It’s a stressful, potentially career-limiting exercise for CTOs, but one they need to successfully negotiate on a regular basis. Make the right call and you’re a hero, but make the wrong one and the company is wed to a potentially financially debilitating and long-term nightmare.

Waters speaks to a lot of CTOs from a range of financial services institutions. And while they are generally happy with the levels of service they receive from their providers, that isn’t always the case. A number of CTOs I have spoken to over the years have expressed their frustration at vendors’ “cutting and running once the contract work has been done.” While it’s only fair to hear both sides of the story—one thing I have learned over the last decade is that there is always another side to the story—what is clear is that certain vendors have built up unblemished track records in terms of responsiveness and flexibility, while others have exhibited increased levels of inertia when it comes to complying with clients’ requests once the deal has been inked. Looking after one’s clients is as straightforward as delivering on your promises. If you cannot deliver on a promise, don’t promise it. It’s that simple.