Wednesday, August 26, 2009

Software vs. finance

I've worked in software for quite a few years now, and I know that there are few more complex things that humans have created. To describe to anyone who hasn't worked in the field just how complicated an order entry system, for example, can be is almost impossible. You not only have thousands of lines of code, written by people of varying skill levels and experience responding to different requirements, but you also have interactions with the operating system, third-party software, external data stores, and so forth. Any moderately interesting application is orders more complex than the majority of the non-computer world.

So my question for the day is this:

Why do we need finance people to stay in place to unwind the crisis, when we let completely inexperienced people take over our software?

We're seeing our bankers making the big bucks again, and they were all kept in place through government bailouts. No matter what they had done to destabilize the world financial system, they were needed because "only they could understand these complicated financial instruments."

Now I have a master's in finance from a prominent school (FWIW), so I have some understanding of financial products, the misdirection, the assignment of risk (that theoretically reduces that risk, ha, ha), and I can tell you that there is no financial product, no matter how layered in legal jargon, that compares to a useful computer program in difficulty.

So, and I ask this in sincerity, why do we need to prop up the kings of Wall Street, restore them to their place in the universe, while every day we move some piece of software to an offshored company full of folks with meager training and experience? Why are we so comfortable taking applications away from the people who built them, giving them over to people who don't understand the business, the industry, the requirements of users?

Several answers present themselves, and at least one of them is right, but I still find it incongruous and unfortunate.


Anonymous said...

I start a new job on Monday. One of my objectives will be to make it easier for the Indian staff to run the American-made product.

We're comfortable doing this because the platform is vastly easier to use than to create. Further, we are not giving control of the business, or user requirements. The difference between implementing and operating a large-scale software project is vast and should not be lost on you.

How this relates to finance... I suspect because unwinding positions is similarly complex to establishing them. Nobody is unwinding the software in the same sense, like taking it apart, piece by piece. Eventually it could happen, resulting in an offshore development team, but that's not always the model used for established software.

Time to get outta bed and bring in my DL and passport. Yep, they'll confirm my American credentials for the task of reducing demand for American workers. God bless you, Ayn Rand!

Welcome back to bloggerville!!!

- mcfnord

Anonymous said...

another realization today: once I bought a lot of real estate, and it took years for me to unwind my position. It was much harder to unwind than to wind. If these assets are distressed, you bet you enter a hornet's nest of too many claims for not enough value. This seems quite a bit different from software, which as I said is much easier to maintain than create. I'm renaming this blog: Andro talks, mcfnord responds, then silence.

I'm struggling to understand, as thoughtfully as I possibly can, how you had a MBA or something in finance, and lost half your assets. If it consoles you, I've lost more (in that real estate). But maybe the answer lies in the genuine "common knowledge" of buy-and-hold with a balanced portfolio, which broke down as a model. Or didn't, if all this about 45% spike since March is true. Anyway, I still think of you. Keep it real! The internet is standing by to hear your views. - mcfnord

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