Editorial: October 2001
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
I am writing this editorial letter almost three weeks after the terrorist attacks on New York and Washington, D.C. I live and work in New York, and the city has returned to some degree of normalcy, at least on the surface. But no one here feels the way they felt before Sept. 11. The old New York risk/reward equationthat the city can be a difficult place to live, but the trade-offs (the theater, restaurants, museums, the very spirit of the place) make it all worth ithas changed radically. And it will take time for New Yorkers, indeed, the entire nation, to regain that spirit. What has replaced it, in part, is a sense of pride in how New Yorkers came together to support the rescue efforts and each other.
Business is fundamentally about risk. We run risks whenever we introduce a new product, enter a new market, buy or sell a subsidiary, invest the firm's cash. We take risks when we decide on the year's budget, embark on a new IT project, even when we choose between two job candidates. And we calculate rewards that might come from all the various risks we take. We analyze actuarial risk and return on investment, and speak less formally of low-risk opportunities and risk-averse employees. And for the most part we've always worked within the bounds of risks we felt we could control, or at least measure with some confidence.
That's all changed. Suddenly, the variables that make up the standard risk equations by which we live and do business must include the unknown of terrorismwhether it be directly or indirectly aimed at usand the potential effects of terrorism on our businesses. All of us, in one way or another, are rethinking the risks we take daily, recalculating those equations and frequently coming up with very different solutions.
Over the course of the next few months, CIO Insight will publish a series of articles on the theme of rethinking riskwhether it be risks surrounding business technology, management or strategy. For CIOs, rethinking risk means, most immediately, reviewing your disaster recovery and business continuity plans in the light of a very new and unfamiliar world. In this issue you'll find the story of New York Shipping Association, all of whose 160 employees escaped from their offices in the World Trade Center and were back to work in new quarters two days later ("Safe Harbor"). The issue also includes a survey, taken after Sept. 11, of more than 250 CIOs on their preparedness for disaster ("Disaster Recovery"). The results are encouraging: Most of our respondents appear to feel adequately prepared to make sure their businesses can keep going in the event of a disaster.
In future issues, we will be looking at how businesses of all kinds are facing very different strategic risk equations involving IT architecture, security and privacy, the use of technology to connect and manage people and changing strategies for doing business in a world already intimately wired together. We hope you find our coverage helpful.
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