How to potentially destroy a company in 45 minutes

Monday, August 6th, 2012

How to potentially destroy a company in 45 minutes

Technology is an enabler. It can enhance your business processes, improving efficiency and profitability. But only if it works!

Hot on the heels of the RBS software glitch, is the recent case of erratic movements in stock prices on the New York Stock Exchange (NYSE) which Regulators traced to the automated trading software of an external provider. It is reported that the system did not perform as expected (although that is not really the question! Did it perform to the agreed specification? That is a more pertinent thought) sending erroneous trading orders to the exchange.

Fortunately the situation only lasted 45 minutes. Unfortunately, that was enough to incur trading  losses of some $440m. The stockbroker’s share value has apparently fallen by 75% and it is reported they are seeking investment or even bids for a takeover to stave off collapse.

Financial institutions and commodity traders rely greatly on vast computing power to give them a competitive edge but one wonders whether they ever stop to think what could go wrong in the case of a malfunction. IT systems have been known to fail and procurement specialists know that major negotiations are usually required to pin down the software supplier to accept appropriate Limits of Liability and the consequences of non-performing software.

Consideration needs to be given to  disaster scenarios, no matter what is the probability of them occurring, if only to make people realise the potential impact.

If you entrust your IT to a  third party you also need to ensure that you have undertaken your due diligence on them. This will include the success, or otherwise, of the system elsewhere in comparable situations. Some organisations  still place contracts and do not take up references.

Need a simple, cost effective check on your outsourced IT contracts and providers, then ask us about how Procurisk® can help put your mind at ease or worry you even more!

Better to know – let that be the watchword.

How to potentially destroy a company in 45 minutes