CRYPTOCHAOS

"Growing a global information technology consulting practice during one of the worst economic slumps in decades is an accomplishment deserving of a spotlight.  The $17.3 billion firm Computer Science Corp. (NYSE:CSC) is making it happen with a mixture of domestic contract wins and strategic acquisitions unbound by the constraints of U.S. borders"

"Even so, there's still value in a BusinessReadableDSL, and indeed this is an area where I do see value in this computational model. But here too lie dragons. The biggest one is that while it can make sense to cast your eyes down a list of rules and see that each one makes sense, the interaction of rules can often be quite complex - particularly with chaining - where the actions of rules changes the state on which other rules' conditions are based. So I often hear that it was easy to set up a rules system, but very hard to maintain it because nobody can understand this implicit program flow. This is the dark side of leaving the imperative computational model. For all the faults of imperative code, it's relatively easy to understand how it works. With a production rule system, it seems easy to get to a point where a simple change in one place causes lots unintended consequences, which rarely work out well."

"One of the challenges with SOA is that a successful implementation is a multi-year process, since not only do systems and interfaces need to be changed, but development methodologies and incentives need transformation, and the business itself needs to drive the process.� Definitely not overnight stuff. As I understand from what I’ve heard about Burton Group’s own investigations, SOA initiatives show a lot of potential when they are first launched, but tend to fizzle after a year or two."

"Harold Kerzner’s variant of a process seen on the wall of the Greater London Council Architects Department in 1978:

1. Project Initiaton
2. Wild Enthusiasm
3. Disillusionment
4. Chaos
5. Search for the Guilty
6. Punishment of the Innocent
7. Promotion of Non-Participants
8. Definition of Requirements"

"To assess his efficiency, the store's computer takes into account everything from the kinds of merchandise he's bagging to how his customers are paying. Each week, he gets scored. If he falls below 95% of the baseline score too many times, the 185-store megastore chain, based in Walker, Mich., is likely to bounce him to a lower-paying job, or fire him."

...

"The brains behind Meijer's system is a consulting and software company known for decades as H.B. Maynard & Co., which last year became the Operations Workforce Optimization unit of Accenture Ltd. Borrowing from time-motion concepts first developed for U.S. steel mills and factory floors, it breaks down tasks such as working a cash register into quantifiable units and devises standard times to complete them, called "engineered labor standards. Then it writes software to help clients keep watch over their work forces."

"Whether you believe America is on the brink of another ‘30s-style Great Depression, or you quietly suspect a wave of manic exuberance could turn back the slide as quickly as it came (or, more likely, you’ll take the bell curve in the middle), you must recognize how the media’s growing use of filtered feedback from the audience has formed a trend amplifier that’s taken on a life of its own. Stories from people for whom the economy remains an ominous cloud on the horizon but have yet to miss a mortgage payment don’t make for good listening. They may provide some contrast to put the story in relief, but the story is clear, as told and retold by the audience to itself."

...

"So what, you say? This means that, even if you are carefully monitoring and analyzing social media, you may well be focusing your efforts on the wrong things. You may be focused too much on understanding the content of conversations (especially the subject and sentiment of messages), and not enough on understanding their velocity and resonance. We search for keywords that define the baseline of relevance – our brand, our competitors, our category – but how many are actively looking for fast-spreading stories in the places where they are germinating? And then, how many are defining their own roles in these stories, both through action and communication?"

"Gary Gorton, a 57-year-old finance professor and jazz buff, is emerging as an unlikely central figure in the near-collapse of American International Group Inc.

Mr. Gorton, who teaches at Yale School of Management, is best known for his influential academic papers, which have been cited in speeches by Federal Reserve Chairman Ben Bernanke. But he also has a lucrative part-time gig: devising computer models used by the giant insurer to gauge risk in more than $400 billion of devilishly complicated deals called credit-default swaps."

AIG relied on those models to help figure out which swap deals were safe. But AIG didn't anticipate how market forces and contract terms not weighed by the models would turn the swaps, over the short term, into huge financial liabilities. AIG didn't assign Mr. Gorton to assess those threats, and knew that his models didn't consider them. Those risks have cost AIG tens of billions of dollars and pushed the federal government to rescue the company in September.

...

The turmoil at AIG is likely to fan skepticism about the complicated, computer-driven modeling systems that many financial giants rely on to minimize risk. As chief executive of Berkshire Hathaway Inc., which owns insurance companies, Warren Buffett has been sounding the alarm about the issue for years. Recently, he told PBS interviewer Charlie Rose: "All I can say is, beware of geeks...bearing formulas."