IT-Enabled Risk/Return Management:Service-Oriented Infrastructures vs. Dedicated Systems

Risk/return management has not only evolved as one of the key success factors for enterprisesespecially in the financial services industry, but is in the times of the economic crisis initiated by thefinancial markets crucial for the survival of a company. It demands powerful and at the same timeflexible computational resources making it an almost ideal application for service-oriented computingconcepts. An essential characteristic of service-oriented infrastructures is that computationalresources can be accessed on demand and paid per use. Taking the estimation of covariances for aportfolio of risky investment objects as an example, we propose quantification for the economic valueof fast risk/return management calculations. Our model then compares the cost structures of serviceorientedinfrastructures and dedicated systems in this domain. On this basis, we can determine underwhich circumstances the one or the other architectural strategy is superior.[...]