The Proper Role of IT

Now that we are getting close to the U.S. summer holiday of Labor Day, its seems a logical time to discuss IT's role within organizations.

I understand in some recent presentations at this year's VMworld, that some vendors were returning to the old meme of running IT as a profit center. It's a very dangerous idea, especially for financial technologists. Banks don't make a profit by being IT firms. They make their profits on how they use their IT infrastructure to execute their investment strategies.

Trying to run IT as a profit center takes firms away from their core competencies and quickly re-introduces the "priests of the glass house" attitude among the staff, which is never good for business.

Of course, with the evolutionary changes that are happening within the world of technology, the trend is understandable. Financial services have pushed cloud computing and latency management further than any other industry vertical to date and continue to do so.

What the industry might think of as old-hat, such as complex event processing (CEP), has barely moved into other verticals. Imagine once the media industry deploys CEP in conjunction with streaming video. Can't place that young actress playing against William Holden in the 1955 film Picnic? Click on her to find out that she's a young Kim Novak in her first film role.

For the next several years, IT organizations will be pulling one technological rabbit out of a hat after another. However, all these new capabilities should be focused on supporting the core business for investment banks—trading and not technology for the sake of technology.