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28 October 2008

Financial institutions that embed notification workflow into their operations can gain a competitive advantage

A new breed of notification workflow software can help financial firms to ensure business continuity, says Matthes Derdack

According to a recent UK survey among business managers, IT and telecoms failure remains the top cause of business disaster and a real threat to their organisations. These systems are the most common sources of downtime and business disruption. Additionally, it is estimated that 75 per cent of risk managers see unplanned downtime of IT systems lasting 24 hours or more as a threat to the very survival of their entire business.

As today’s financial institutions rely on the availability of IT systems more than most other vertical sectors, effective strategies for maintaining IT system availability are of critical importance. In order to successfully prevent or at least reduce downtime, organisations have to deploy systems that go beyond detecting events. They need to embrace the concept of fast, efficient and fully automated event notification.

More advanced organisations might already have some basic notification feature in place, but a key element for real efficiency and true notification processes is usually missing. Indeed, most automated alerting systems that are deployed today follow the ‘fire and forget’ principle. That means that they are generally limited to notifying multiple people when an event has occurred. There is no sense of ownership, or intelligence behind the alerts. In particular, there is no ability to track the delivery of messages and subsequently to act upon failure of delivery of urgent alert messages. This would be particularly valuable. If a message cannot be delivered to a responsible person several options should be tried. The alert could either be delivered through a different communication channel, let’s say voice instead of SMS, or when this option fails, be escalated to another person and so on – until somebody can be reached who will take care of the issue accordingly.

Fortunately, this problem has now been addressed. There is a new breed of notification solution – notification workflow software. It features closed-loop notifications via multiple channels including SMS, voice, mobile e-mail, fax, instant messaging and multimedia messaging services. Once an alert has been received, the closed-loop notification software can not only rapidly notify responsible and available people about critical events using the most appropriate channel, it also tracks the delivery of and responses to alert messages. Most importantly, however, it auto-matically reacts on delivery failure or response time-outs, for example by trying failover routes, choosing an alternate communication medium and processing escalation chains.

There are a number of aspects of closed-loop notification that are of benefit. Ensuring that the workflow is as automated as possible, from the detection of a defined event to closure of the incident, reduces the time people need to take to get involved. Valuable time is wasted if an incident requires someone to start phoning around to find the right person to look at the problem. Also, if there is no closure to the notification process then the onus will be on an operator to monitor the situation to see if it has been resolved. Many process efficiency improvements will stem from the reduced latency, by having decisions taken automatically based on predefined policies and procedures rather than having to ask staff to make these decisions on the fly.

In situations where the alerts raised are of a business-critical nature, it is essential that notifications are quickly, reliably and safely delivered to the right people so that rapid resolution can be carried out. The ability to deal with shift rotas, calendars, multiple methods of communication and escalations all contribute to getting someone working on the problem with the greatest possible speed, reducing the time to resolution.

In order to get the maximum efficiency and reliability from operational processes, the act of resolving any out-of-line situations is critically important, and for that reason many financial companies are keen to find a way to bring this part of operational workflow into the overall business process. It is not enough for a flag to be raised to indicate there might be a problem. The process should encompass problem handling and resolution too.

Another major advantage of notification workflow products is that it allows you to effectively convert multiple monitoring systems into service-oriented architecture services, each feeding into a central notification hub. As new events need to be monitored, systems can be added and the alerts fed into the hub. Fire-and-forget subsystems of individual monitoring systems can be replaced by a centralised notification workflow system with minimal impact on the organisation.

Analyst firm Lustratus has commented: “While many software components include some sort of limited alert or notification services, the nature of closed-loop notification services means that a specialised solution is the best fit for this requirement. They can consolidate notification activities and provide reliable closed-loop processing. This goes far beyond simple event notification.”

Companies in all verticals are starting to specifically look for software that can deliver closed-loop notification services. This ensures there is a clear feedback loop between raising a notification and its resolution, and the workflow required to achieve this is as automated as possible.

Financial institutions such as AWD Germany, the biggest European independent financial consulting company, already use notification workflow software to send notifications regarding business-critical downtimes in their IT backbone systems. Once notification workflow has become embedded into the organisation, other uses can be found for it as well, thus maximising the benefit to be gained from investing in these types of systems.

Financial institutions that embed notification workflow into their operations can gain a competitive advantage from a lower risk of interruption to their business processes. Notification workflow improves the efficiency of problem alerting and resolution for business-critical processes.

Ultimately, risk managers will need to worry less about threats to their business survival due to IT system failures. There are enough jeopardising events in today’s business world already.

Matthes Derdack is managing director of Derdack: www.derdack.com

This article first appeared in the Winter 2008 edition of Finance on Windows magazine.