As the financial markets have exhibited in the last week, even the most man made of systems (our own financial markets) can act in what seems to be unpredictble ways. Even for the most informed of financial experts, the destabilization of global markets have been sudden and - with the exception of a few lucky guessers - without any warning.
The essence of such unpredictiability is the simple realty of complex systems, which react in vastly different ways with even the smallest changes of inputs.
When I getting my degree as an aerospace engineer, I saw that in most large engineering projects - airplanes, spacecraft, and satellites - this complexity could be easily observed, but many times it was impossible to control until you had a complete grasp of how everything worked together.
Some of the biggest names in the financial industry - Merrill Lynch and Lehman Brothers - didn't see what seems obvious: investing in loans to people who couldn't pay them wouldn't be a good idea. But the equation isn't that simple. The fact is that sub-prime mortgages were being packaged, sold and bought as more obscure investments (including the now-infamous CDOs). In fact, the packaging and repackaging of these investments became so complex that it effectively became impossible for these big banks to create accurate valuations of their holdings.
Of course, when they finally realized what these investments could be worth - a small fraction of what they thought it would be - companies and markets were already on the way down.
What can we learn from this? Well, being a technology company, we're hardly people who can make any judgement on the soundness of financial advice. However, we can use the experience to come to a conclusion which applies to technology as much as it does finance or engineering:
Complexity Breeds Ignorance. And ignorance is asking for trouble.
Once technology gets too complex to understand, business owners tend to stop trying to understand it (for good reason - it's not their core business). The choice that they make next can make or break their business: Push the issue aside, or look for a trusted partner to help them to understand it.
For businesses, pushing technology aside is sometimes the easiest and cheapest option, but that could be a big mistake - one big enough to topple your business in the future. Letting technology "run its course" has a host of problems within any organization large or small. You risk having unproductive systems, making poor investments, losing data, and even being hacked. Someone needs to guide you through the complexity, pinpoint the risks, and tell you how to mitigate them.
That's why TSP has recently developed two new products: our Complete Technology Briefing (CTB) and Organizational Security Briefing (OSB). While you might not see the immediate revenue-making or cost-reducing potential of these briefings, they're essential for any business that takes their future seriously.
The CTB helps you to understand your technology's fundamental structure and role in your organization. With it (and the understanding that you already have for your business operations), it's easy to create a technology strategy for your company for the next few years. One that's smart, optimized, and with fewer risks.
The OSB serves a different purpose: to analyze your Information Technology Security and to help you make sure that your internal processes are prepared for anything: theft of digital data, failure of hard drives, or even a "regional event" which renders your business inoperable from its current location. Even if none of these things happen, the OSB will give you all of the materials to show even the biggest of clients that you're serious about IT security. In today's competitive environment, that can be the difference between a pitch and a client.
A few years ago, there was probably an unheeded report on someone's desk warning the CEOs of Merrill Lynch and Lehman Brothers of the dangers of complex derivative investments - probably written by a fan of Warren Buffet. Consider our CTB and OSB reports to be the equivalent for your business's technology: essential knowledge to stave off the ignorance, helping your business avoid real problems in the future.





