People aren’t passé
Jinfo Blog

14th August 2008

By Tim Buckley Owen

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Much of the press coverage of Thomson Reuters’ 54% drop in profits as a result of integration costs following the merger – not to mention the current ‘challenging economic environment’ – was predictably downbeat. But revenue actually rose by 11% during the period and profits (excluding merger costs) by 15%. And one of its most spectacular performers was the Enterprise Division – driven, the company says http://digbig.com/4xhqe by continued demand for the data feeds that enable customers to power electronic and algorithmic trading. Algorithmic trading – using software instead of warm-bodied operatives to take buy and sell decisions based just on the numbers – is certainly making waves at the moment. The London Stock Exchange recently announced http://digbig.com/4xhqg significant price cuts to take effect from September – and was open about its goal of ‘unlocking the considerable potential for further growth from statistical arbitrage and algorithmic trading’. We’ve speculated before on this phenomenon http://www.vivavip.com/go/e5233 musing on whether software could ever handle not just number-based transactions but nuanced assessments of text-based intelligence too. Although it may be early days, the possibility shouldn’t be discounted entirely. However, there was a welcome fight-back by the warm-bodied army recently with the release of findings by the Tabb Group, a research and strategic advisory firm focused exclusively on capital markets. ‘Although use of sales traders across European market centres will continue to decline at a rate of nearly 10%, the belief that the European sales trader is “passé” is unfounded,’ Tabb reports. ‘Automated trading does not spell doom for the sales trader, just as the sales trader does not prohibit the growth of electronic trading,’ the report concludes http://digbig.com/4xhqh.  ‘Even for electronic-trading clients, the expertise provided by the sell-side broker remains invaluable in navigating the markets and the complexities that surround them.’ Expertise, navigation, complexities – all words that should resonate with corporate information managers striving to convince their bosses that, just like the sales traders, they can achieve things that software can’t replicate. But if the latest briefing from Outsell is anything to go by http://www.outsellinc.com/store/products/752 they’re having a real uphill struggle. Only 13% of senior executives turn to their organisations’ intranets or portals when seeking information, says What Executives Think About Information Management. Instead, 65% of them use the internet as their first choice. ‘If executives are not using the portals and platforms that IM spends good money and time to develop, and if they perceive the internet as the go-to source, it’s no wonder that IM funding is increasingly hard to maintain,’ Outsell concludes. It also comes up with some commonsense ways of tackling the problem – higher visibility, closer alignment with corporate goals. But maybe those traders can offer some useful lessons to information managers too.

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