Sometimes, smaller is better. That's not to say there aren't advantages to being part of the Citigroups or Fidelities of the world, where vast sums of capital are available. But smaller organizations do have traits that larger peers may envy.
I doubt even the most masochistic CIO would wish for smaller IT budgets and fewer technologists. Rather, many an IT leader often has wished for even a small percentage of Citigroup's IT spend. But CIOs and CTOs at larger organizations often wish that they could implement enterprisewide projects in a few months, rather than - because of their sheer size - over many years.
With easier-to-manage business units, smaller peers can implement newer technologies much more quickly. Take Wachovia's Corporate and Investment Banking (CIB) group. While Wachovia is a financial powerhouse, Wachovia's CIB group, by Wall Street's standards, is the thirteenth or fourteenth largest, according to Wachovia (CIB accounting for one quarter of the bank's overall revenue). But CIB's goal is to be in the top five on the Street in three to five years, according to Susan Certoma, CIO and head of CIB Technology (CIBT).
To support the CIB's "hockey stick growth curve," says Certoma, Wachovia doubled its IT investment; added 300 skilled technologists; and developed a three-year plan to restructure IT, scale its grid architecture and develop a true service-orientated architecture. A little more than a year into the plan, CIBT has, among other deliverables, produced a robust risk management architecture based on grid computing. CIBT also is moving to standardize the front end for true multiclass asset functionality.
Further, CIBT is being smart about how it allocates its investment. For example, it has successfully streamlined its physical trading floor in New York by removing all PCs from traders' desks. This seemingly simple move reduces the heat generated by machines on the trading floor, and makes moving and reseating traders around the floor much easier. Each year, Wachovia estimates it moves 8,000 seats back and forth on its trading floors, as traders are assigned to different teams. Previously, those moves had to be made over weekends while PCs were physically moved. Now, with the trading floor based on thin-client front ends and ClearCube technology, reseating literally can be done over lunchtime.
Will Wachovia be the No. 5 corporate and investment bank in three years? Maybe. Certainly, changing an entire technology platform so rapidly at a much larger bank would be challenging. Perhaps, in Wachovia's case, smaller is better. 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