Intelligence and Agility for the Complex World of Retail

By Linh C. Ho

Retailers are quickly realizing the value of adopting technologies that provide insight and analysis of their customers’ behaviour and experience. The most recent example, smartphone applications which allow major retailers to track and offer promotions to shoppers as they walk from outside the store, to counters, to cash registers and even inside the dressing room. Every move gives the retailer more information and insight. 

While there’s no ignoring the value of a technology that provides a new generation of intelligence and agility, the 100’s or even 1000’s of transactions taking place with a customer’s every move can strain a retailers IT infrastructure and impact transaction response times and ultimately the business bottom line. According to a leading analyst firm, a key growth area for 2011 is retailers looking to upgrade e-commerce platforms, multichannel infrastructures and application strategies so they can deliver a seamless cross-channel shopping experience across touch points. In order for these applications, transactions (and mobile applications) to run smoothly and ensure the legitimacy of each and every transaction, retailers need to consider a new generation of technology.

Enterprise systems monitoring solutions have done a great job providing key metrics related to the individual silo, for example server CPU, memory or network bandwidth and uptime. However, these monitoring tools often fail to detect application problems felt by the user community and IT continues to rely on the end-users to call the helpdesk for problem notification. Moreover, these silo monitoring solutions do not provide the business context and intelligence that IT needs to run like a strategic business unit. As the business demands become more sophisticated, so should the requirements for IT management technologies. The reality is IT infrastructures are part of the retail DNA!

The latest trends have been to adopt a combination of Complex Event Processing (CEP), Business Transaction Management (BTM) and End-User Experience Monitoring (EUEM).  Take CEP for example, the goal of CEP is to provide situational knowledge and awareness to help the users to accurately sense and respond to business needs. CEP does this by correlating and processing the complex events (IT or business events) to help a business understand any business operational abnormality. For example, CEP can monitor and determine when the stock levels for the book “The King’s Speech” are within 10 percent of the minimum stock level given the last 10 hours of buying behaviour and send an event to begin the re-stocking process to the distribution center.

CEP alone isn’t enough for IT management. Combining CEP with the rise of BTM and EUEM, which captures transactions executed by end-users across an organization, has allowed more companies to gain real-time quantifiable business impact that IT needs. For example: how many transactions and which channels have been impacted, what is the total revenue loss, which regional customers are impacted, where is the bottleneck in the business process, was there a security breach by a user?

BTM with a CEP engine brings together events impacting business transactions, processes, activities and customer experience. This sophisticated combination is an ideal technology for retail organizations that want intelligent and agile ways to sell products and services to customers—plus provides IT with a reliable infrastructure to back it up. BTM provides the end-to-end transactions flow perspective, so it ensures that when any problems are detected, the right IT staff can fix the problem immediately without losing sight of any transaction.

The EUEM on the other hand, known for detecting application performance problems, provides the customer experience perspective. EUEM provides an understanding of the impact on the end-users experience no matter what location they may be. 

A powerful combination of BTM, EUEM and CEP would give critical perspectives to IT management:

• A real-time transaction-centric service model to show all transaction relationships with their supporting IT infrastructure components
• Visibility of all business transactions and transaction flows
• Transaction and application diagnostics for quick root cause of problems
• End-user experience and behaviour perspective
• Business operations and processes perspective with intelligent analytics

 These perspectives give retailers a better understanding of events as they happen, enabling them to be more clever and focused in how they engage with customers.

The faster a retailer can respond to shopping pattern changes and customers’ behavior, the more competitive it is and thus the more money it makes. Retail is an industry area in which these critical perspectives can be particularly effective for the IT organization and even the line of business managers. Information about promotions such as daily-deals like Groupons and Living Social, prices, competition, stock availability, and locations only give customers greater control of the shopping process. Retailers continue to face the competitive pressure and need to be ahead of their game.

Retailers that harness new generation technology that provides critical business-centric perspectives are able to gain real-time insight, not only into their business transactions and end-users experience, but also into the complex patterns within their IT infrastructure. Moreover, such solutions typically give retailers an easy way to understand any change impact on the users, the business and the IT infrastructure. For example, retailers can compare between two time periods for a before and after effect of any given promotion or campaign.

This allows retail organizations to be more responsive to the market, make better informed decisions and ultimately are more successful.

Basel III – The compliance conundrum

By Linh C. Ho

This week I spent a morning at the NYSE with a number of investment bankers. When talking to banking technologists, some of the top priorities are customer experience, global platform, innovation and regulations/compliance. In this blog, I want to focus in on compliance specifically the new Basel III.

Critics have not been kind to Basel III. While few will argue that championing greater visibility and tighter regulation of liquidity controls is a bad thing.  It’s widely believed that the legislation lacks teeth and is, in truth, a fairly weak ‘knee jerk’ reaction to the economic crisis. Regardless of sideline criticism, implementation of the legislation in some form will be vital to the future of the banking system. In practice, it is potential confusion around the cross over between Basel II and III that will be the real sticking point.

The fact is, even if analysts and banks do come around to the new legislation ideals, they are likely to have trouble implementing the processes effectively within their current IT environment. As Alison Ebbage noted in her recent article for FST, one of the key challenges that banks face in their drive towards Basel III, is fragmented and siloed IT infrastructures. The article noted that this can make things cloudy in terms of generating a holistic view of events happening across trading platforms. This poses a significant operational risk to banks.

In terms of mitigating unforeseen risks, the onus is still very much with the banks to ensure that their internal processes and failures don’t let them down. In particular, The Accord specifically cites business disruption, data loss and security breaches arising from system failure as events that banks need to protect themselves against. As these processes are very much enabled by technology, IT needs to ensure its got its own back.

If banks are to enforce the latest legislation, simplifying these complicated IT landscapes will be the key to success, but it’s certainly a tricky business. For years banks have invested in sprawling systems, adding more and more layers as they were needed. In this situation, identifying how, why and where an IT problem has occurred is arduous, time consuming and expensive. With a complicated mismatch of systems and pressure to implement new regulations, I’d bet my bottom dollar that most IT managers wish they could clear out their IT cupboard and start again.  So, with operational risk a much overlooked – yet pivotal – part of Basel III, what’s a bank to do?

Flipping IT management on its head is a good starting point. Rather than thinking about individual application systems and how they’re performing, banks need to generate an end-to-end view of all business transactions in real-time. Transactions touch multiple applications, IT services, business services and possibly run in and out of the cloud. Banks need a way to tag and track the transaction flow to ensure there is absolutely no blindspots. Moreover, when regulators and auditors require historical reports on systems performance and reasons for losing sight of transactions–it is IT that will have to generate them.  Traditionally this hasn’t been possible because IT management has been just as siloed as the systems it monitors. Because of these siloes, blindspots have been created for IT, making it harder for IT to quickly find and fix problems. This situation has made it very difficult to avoid downtime or application slowdown. Steering clear of these potential threats is crucial in order to reduce risk, which in turn makes it easier to monitor compliance processes. If comprehensive records of IT performance are the norm, potential areas of risk can be readily identified and acted upon. By ensuring these records are in place and are constantly updated, the humble IT department will become recognised as a vital, reliable and valuable business unit.

Gotta Love Paying Taxes on Time

By Russell Rothstein

March 7, 2011

We’re proud of the fact that OpTier software powers a variety of critical businesses. Every day OpTier BTM ensures that stock trades execute fast, national train lines keep on schedule, billion dollar procurement systems don’t fail, online bill payments are executed properly, mobile phone service plans are provisioned, and insurance claims are processed. And while it’s not as sexy, we also ensure that citizens are able to pay their taxes on time by managing tax return filing systems.

Our customer, a large, national tax authority, is responsible for collecting all online tax submissions each year. Since few of us prepare our tax forms in advance, it comes as no surprise that most of its traffic arrives in one giant peak just before the deadline.  In fact, more than 80% of its annual traffic occurs during those 3 weeks, and 10-15% of the traffic occurs during the final 8 hours! Of course the annual peak is extremely stressful for the IT department, and in the past, there have been some painful system failures that resulted in submission delays.

This year, (we’re happy to report,) the annual peak was scaled successfully. Our customer used OpTier BTM to monitor all of the key servers, and during the final day, it was processing nearly 5 million transactions per hour.  These transactions are exceptionally complex, with over 200 tiers, and OpTier BTM discovers them all automatically, which is important, since there are changes every year.

During the peak, a customized OpTier BTM dashboard is displayed on a 50” plasma monitor at all times. Around 50 people man the command center 24/7 during the peak, and OpTier BTM is always in focus.

The SOA architecture is developed by a number of different application teams and vendors, so the ability to identify where a problem is occurring and put the resolution into the hands of the correct team is absolutely essential – it saves everybody a lot of finger-pointing and arguing over who’s holding the ball. For example, in the cut-out from the dashboard below, the red block shows a slow-down in the performance of the back-end services. By isolating the problem, OpTier BTM can reduce the time spent on troubleshooting by as much as 90%.

Needless to say, the business impact of any outage is enormous for the authority, the vendors, and the public. So the ability to identify and resolve problems quickly is crucial.

OpTier BTM repeatedly identified significant slow-downs much sooner than other monitors, and proactively identified several different types of incidents. The team also used OpTier BTM to drill down and isolate problems. In more than one case, OpTier BTM was used to halt an all-hands call, and to identify both short-term and long-term solutions.

While OpTier BTM complemented the other monitoring tools in the data center, the team appreciated its business focus and the ability to understand the user impact of IT issues. Where other monitors each showed one piece of the puzzle, OpTier BTM captured the entire picture. To quote one of their operations managers, “We need this stuff! We should be using it to monitor other applications as well. ”

“OpTier, the company that ensures you pay your taxes on time.” As true as it is, we’ll have to mull that one over again as a company slogan…