Winner: Wall Street's IT innovator

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Throughout 2002, John McKinley had to use every trick he had ever learned in the course of his IT career. As CTO of Merrill Lynch, McKinley devised an IT strategy that guided the financial behemoth through a rocky period of more than 15,000 layoffs and a shrinking IT budget.

McKinley met the challenge and positioned Merrill Lynch for growth in its key brokerage, mutual fund, insurance, annuity, and investment banking services.

“Last year was fascinating because the issue became how to keep innovation going in a period of austerity,” McKinley says.

The CTO responded by deploying cutting edge technologies that saved the company as much as $1 billion, increased efficiency, and services. In the process, Merrill Lynch became a proving ground for enterprisewide adoption of Linux-based machines, Web services application

implementation, and server consolidation, all of which streamlined much of the company’s infrastructure.

At the same time, McKinley marshaled resources to expand Merrill Lynch’s core competency of financial services. He oversaw the implementation of the company’s Wealth Management Technology Platform through a strategic partnership with Thomson Financial, among others. The platform delivers state-of-the-art financial information and services to its thousands of brokers.

"John McKinley changed the culture at Merrill Lynch,” says Larry Tabb, vice president of securities and investments at the Needham, Mass.-based consulting company, the TowerGroup.

“Outsourcing partnerships, Linux, and Web services were all used to save money to be able to make the technology go further,” Tabb says. Overall, McKinley was able to cut IT spending from $3 billion to $2 billion without undermining the level of service.

For those reasons, InfoWorld has named McKinley CTO of the Year.

Tough times

The path through a lean year wasn’t an easy one. Merrill Lynch saw a wealth of top managers leave the company at the end of the year, McKinley among them. The CTO left by mutual agreement with management at the end of February.

“It’s been a great run,” McKinley now says, declining to talk about the specifics of his departure. “I’m tremendously proud of the team and what we’ve been able to do at Merrill Lynch. We are much more efficient now on a cost basis.”

McKinley was forced to create an IT strategy in the face of three consecutive IT budget reductions, totaling $1 billion, he says. The plan he implemented focused on ROI, using co Windows Server 2003 a good performer, easy to manage, scales well mmodity technology to increase productivity and spending money to strengthen the company’s core products.

“The one thing we didn’t want to do was ‘appeasement portfolio management,’ where you say everybody feels the pain equally,” McKinley says. “In that case, you wind up overfunding mature businesses and underfunding emerging strategies. We focused on areas that matter for us and made sure they received people and funding.”

“We wanted to focus on next stages of growth for Merrill Lynch, and that was in our retail brokering initiative, our private brokerage market, and global foreign exchange business,” McKinley says. “These were the opportunities that represented the next stage of growth for Merrill Lynch.”