Lesson 6: Transformations in Process
To some extent all information technology (IT)-enabled transformations are in process because we find new and innovative approaches to applying technology every day, and these innovations regularly threaten existing business models. We are in the middle, or maybe even the beginning, of the transformations of the financial industry. The technology has dramatically impacted brokerage firms and markets, and there is more change to come. The potential for transformation in this industry was clear. Will it be as obvious in other industries? Will they be prepared for massive changes in their business models?
Segment 1: Lime Brokerage and LimeWire
Information technology (IT) is associated with speed and efficiency. In no place is this better illustrated than within the securities industry. Retail brokerage has been transformed through online brokers, which forced full-service brokers to unbundle trade execution from other services like research.
IT has also transformed the nature of the markets themselves. Lime Brokerage illustrates how traders use computers to execute arcane strategies that require extremely fast trade execution. Such fast execution is only possible in electronic markets. Physical markets simply take to long to trade. Lime Brokerage’s chief executive officer contends that the large number of people doing algorithmic trading help to make the markets more efficient. Is this claim correct?
The huge changes in the industry from technology led the New York Stock Exchange (NYSE) to merge with an electronic exchange, Archipelago, and to go public. After years of expansion, the exchange is now reducing its physical space. The technology has also been instrumental in the consolidation of exchanges. The NYSE purchased EuroNext as it builds a global presence.
LimeWire opens discussion about peer-to-peer (P2P) file sharing and the issues it raises. How does P2P differ from the client server model, and are there intellectual property concerns? This discussion can go back in history to the file-sharing company Napster to cover how the recorded music industry responded with lawsuits rather than a forward-looking strategy. The story continues to video content, the phenomenon of YouTube, and how video providers are taking a more enlightened approach to distributing content than lawsuits.
Segment 2: Mayo Clinic
Healthcare needs a revolution. Moving to the use of electronic
medical records (EMR) is a national priority in the U.S. It
represents one of the most difficult implementation challenges the
profession has encountered. The Mayo Clinic raises a number of
points including the complexity of the medical records systems, and
how the EMR system is really a layer that sits on top of other
systems in the clinic. There are problems with interfacing the EMR
system to legacy systems that include the issue of legacy systems in
general and the need to keep information technology (IT)
Among the barriers to adoption have been the behavioral changes required of physicians and staff to use the system. Problems with encouraging use in the medical setting include:
Electronic medical records are but one part of how technology can transform medicine. Other areas under transformation include administrative systems, and how the process of payments to the physician from third-parties like insurance companies and government agencies could be simplified and accelerated.
Segment 3: MyLifeBits
Jim Gemmell concludes this segment with a great line about the “promise of digital immortality;” future generations will be able to interact with the virtual you. MyLifeBits is a research project, but everything it contains is or could be available today at an affordable price. Imagine being able to record and recall all of the major (and even minor) events in life including people, documents, e-mail messages, books read and more. Search-storing everything is the first step. The harder part is figuring out how to retrieve the memory you are seeking to find. How will we cope with this vast trove of data and information?