A recent Harvard Business Review blog (Conversation Starter) spoke about how IT amplified the mortgage crisis. A good read. IT has the power to drive positive outcomes because it can amplify the business, but it can also cause havoc and create silos if not properly managed. Sviokla and McGilloway assert that technology was at the root of the mortgage crisis we now face. IT actually created the silos rather than eliminate them. Just the opposite of what IT does well and what we would expect. They report that IT is the largest discretionary cost after labor in financial services, but it's role was discounted in how it could foster integration.
IT was placed in the hands of non-technical numbers people, who in turn, delegated IT responsibility to individual business units, essentially saying "hit your numbers and all is well". They sacrificed horizontal thinking. There was an absence of information architectures. Many firms are now scrambling to estimate their losses. They conclude that firms need conformity to an enterprise policy when it comes to IT. They ask "Is IT making your business more transparent?"; Are you burying interdependence?" "Are you focusing on short term cost savings?"
ACORD Standards provide integration across silos within firms and with trading partners. ACORD Standards provide transparency and an enterprise view of information and plumbing. Industry standards can and should provide that top-down enterprise view, but they are often spread across business units and managers who are not encouraged to think horizontally. There are lessons to be learned from our financial service cousins.