With the dust settling hopefully for good after the Enron, World-Com, Global Crossing, etc., financial debacles, I asked a couple of CIOs I met a short while ago these questions: Is there a role for technology (and the CIO) in ensuring such crises never happen again? As C-level members of the management team, do you bear some kind of responsibility in this regard?

After a palpably un-comfortable moment or two of silence, they said something to the effect that what happened wasnt a technology problem and left it at that. On the surface, thats definitely true. Still, it might be like blaming an earthquake for knocking your house down without thinking about whether modern architectural and engineering standards might have helped to keep the building upright. Obviously, there are no guarantees that higher standards or stronger materials can withstand every pressure exerted, but they certainly can help a buildings (or companys) integrity.

Some industry trends may already be pushing things in this direction. Increasing numbers of insurers Ive talked with are thinking about and/or implementing technologies that will afford them one view of their business in real time 24/7. Some insurers are building dashboards, with numerical, analytical, and graphical tools, to help deliver a greater level of control and avoid surprises. Rating organizations are meeting more frequently with insurers, and insurers are concerned about fulfilling their regulatory and reporting requirements (see Many Happy Returns, p. 18).

Certainly a conscientious effort to provide the best and most timely data available is key, not to mention analytics that can point out errors or mismanagement, should they occur (see Analyze That, p. 22). CIOs also can explain to the rest of the management team what the technology can or cannot do for the company, i.e., where reliance on systems alone may be inadequate and where the data may not be taken as gospel. It probably also wouldnt be a bad idea for the technology team to have some understanding of how the financial and accounting sides workjust as a better understanding of, say, claims or underwriting helps produce better systems that support those functions.

Im really not on a soapbox here. Rather Im just_presenting some food for thought as we launch into a new year with all the potential it holds. The issue of financial management (or mismanagement) neednt be one as extreme as weve seen. Those kinds of cases are the exception rather than the rule. Nevertheless, this is about running a business as a business in the best way possible. Many of us make time at the start of the year to look over our personal finances and make resolutions regarding how we can achieve greater fiscal responsibility and results. Maybe we should make the same resolutions to the extent we can within the scope of our business.

A happy, healthy, prosperous 2003 to all,

Sharon S. Schwartzman