Wall Street keeps tight control of IT spend

IT managers from Wall Street firms converged on the Securities Industry Association's (SIA) Technology Management Conference in...

IT managers from Wall Street firms converged on the Securities Industry Association's (SIA) Technology Management Conference in New York this week, many looking for better ways to make the most out of what they already have in place.

With IT budgets still constrained at many financial services firms, SIA President Marc Lackritz told conference attendees that the securities industry as a whole is no longer a bleeding-edge adopter of new technology, adding that most IT budgets are going toward business continuity, risk management and applications that help integrate and consolidate systems.

Citing a prediction by TowerGroup that IT spending in the financial services industry will shrink from $23.1bn in 2002 to $21.9bn this year, Lackritz noted that IT executives who are investing in new projects are being careful to match them to specific business needs.

"In that context, spending less may not be a bad thing," he said.

Lackritz's comments hit home with IT managers like Donald Haile, the president of Fidelity Investment Systems, the technology division of Boston-based FMR. Haile said he has been trying to deal with the challenge of managing 14 mainframes, 1,500 network switches, 500-plus routers and 9,000 servers in three data centres.

Fidelity's IT team recently uncovered numerous redundancies in the company's core systems infrastructure and its desktop environment. Haile said he intended to consolidate systems o pay for new applications in the hope of making the IT unit more efficient.

One way Haile will try to reduce costs is by using Linux on blade servers that run some compute-intensive applications, a change that could cut his server costs by at least a quarter. however, Haile added that he was not ready to consider Linux for mission-critical data centre applications, because the open-source operating system still needed to prove that it is robust enough.

Amir Abouelnaga, a program manager at Northrop Grumman's information services group, said has been exploring the possible use of technologies such as XML as part of a data mining system that would be tied to a large number of databases containing information about the company's government contracts.

Meanwhile, Dennis Mooradian, chairman and chief executive officer of Wells Fargo Investments, criticised IT managers during a speech at the conference and reminded attendees that technology "is not the business" of financial services firms.

Mooradian warned about the dangers of buying unproven technology, and he said that he had never seen an IT project come in on time and on budget. He recommended that, if anything, technology managers should pad estimated project costs instead of low-balling business executives.

However, he added, many IT executives will continue to be difficult to "get money out of the CEO for projects" until the economy improves.

Lucas Mearian writes for Computerworld

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