Is IT partially to blame for the financial crisis?

Information is one of the key components of any IT organization (I would personally argue it’s more important than the technology aspect). Two facts disturb me when one looks at IT’s role in the financial crisis:

  1. We in IT have been pushing data warehouse and business intelligence technology for years, saying these technologies should allow for “proactive” decision making at all levels of an organization, and an ability to spot trends and changes in a business’ underlying financial health.
  2. The finance industry is usually spends more on IT than any other industry.

This being the case, if BI actually does what we’ve pitched it to do, shouldn’t one of these fancy analytical tools spotted the underlying roots of the financial crisis in at least one major bank, and perhaps raised some red flags in advance of the global meltdown? Is IT partially culpable for either not looking at the right data, or selling a bill of goods in terms of the “intelligence” aspect of BI?

Greed by a wide ranging list of parties is certainly the primary cause of this crisis, and I am certainly not suggesting that bank CIOs be paraded to the village square and receive the public flogging that many other titans of industry are being treated to these days. However I don’t think IT can stand in the corner and say “Hey, we just provide the tools, don’t blame us.”

If IT is truly a critical component of the business and its strategic decision making process, and all the chatter about “alignment” and “sitting at the table” is relevant, then we must take some responsibility for positive and negative business events. Rather than running for the hills, savvy CIOs should ask their C-suite counterparts how IT might have raised an early warning, and determine what types of systems, processes and information should be prioritized in the future. If you can truly pitch IT as an entity that might prevent future incidents like this, IT suddenly becomes a major C-suite player, what many CIOs have suggested is key to IT’s success for the past several decades. Perhaps a bit counterintuitively, taking some blame for this crisis might be IT’s key to delivering true business value.

Advertisements

Comments

  1. Hey There. I found your blog the usage of msn. That is an extremely well written article.
    I will be sure to bookmark it and come back to read extra
    of your useful info. Thank you for the post. I will certainly comeback.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: