Banking & Financial Services
White Paper
Transformation Trends in Application
Production Management
About the Authors
R. Srinivasagopalan
Head, IT Transformation Solutions, Banking and Financial Services, Tata Consultancy
Services
Srinivasagopalan leads the Transformation Solutions group for the Banking and Financial
Services business unit at Tata Consultancy Services (TCS). He has over 20 years of
experience in the information technology (IT) solutions and services space. In the
current role, he helps global banks improve efficiency and agility of their IT
infrastructure. Prior to this, he has managed high-importance customer relationships in
the banking and financial services segment, leading multiple application development,
re-engineering, and maintenance programs. He holds a Master's degree in Electrical
Engineering from Indian Institute of Science (IISc), Bangalore, and a Bachelor's degree in
Electrical and Electronics Engineering from National Institute of Technology (NIT), Trichy.
Swaroop V
Consultant, IT Transformation Solutions, Banking and Financial Services, Tata
Consultancy Services
Swaroop V is a consultant with the Transformation Solutions group for the Banking and
Financial Services business unit at Tata Consultancy Services (TCS). A certified software
quality analyst, Six Sigma – Green Belt, and ITIL V3 Masters (SO), she currently plays the
role of a transformation mentor and champion for many Fortune 500 financial
institutions. Over the 16 years of experience with TCS, Swaroop has anchored multiple
roles in areas of software development, program management, and consulting, for
various banking and financial services customers. She holds a Master's degree in
engineering from Indian Institute of Technology (IIT), Delhi.
Abstract
Banks and financial institutions operate in a highly pressured environment, amid a sluggish
economic recovery, compressed margins, stringent regulatory requirements, and looming
threats from new competition. Most banks are taking steps to address near-term financial
pressures, such as pricing adjustments and operating cost reductions. From an information
technology (IT) perspective, banks are increasingly focusing on continuous optimization of
their IT spends.
Heightened cost pressures, increasing complexity of the IT application landscape, and everdemanding 'digital' consumer have forced banking and financial institutions to look at
innovative means to optimize the application production management environment. This
white paper discusses a comprehensive approach to help organizations holistically address
the issue at hand.
The paper also discusses some key emerging trends in the application production
management space, namely:
n
Business-aligned IT Service Management
n
Application Production Management as a Service
n
Portfolio Rationalization
n
Organization Design through Right Team Model
n
Comprehensive Risk Assessment
n
Integrated Monitoring & Data Driven Preventive Techniques
n
Knowledge-Driven Service Automation
n
Lean IT Service Management
While banks have been successful in adopting some of these trends, a systematic adoption of
all these developments would require a holistic and comprehensive framework. This paper
highlights such a framework, which is data-driven, and helps organizations identify specific
transformation levers with a defined cost-benefit analysis and implementation timeline.
Contents
Introduction
5
Evolution of Application Production Management
7
Emerging Trends
8
Business-aligned IT Service Management
8
Application Production Management as a Service
11
Portfolio Rationalization
12
Organization Design through Right Team Model
14
Comprehensive Risk Assessment
17
Integrated Monitoring & Data Driven Preventive Techniques
18
Knowledge-Driven Service Automation
19
Lean IT Service Management
20
Conclusion
21
Introduction
Banking and financial services organizations continue to face a difficult operating environment amid sluggish
economic recovery, compressed margins, onerous regulatory requirements, and intense competition. To survive
and compete in this scenario, they need to:
n
Continuously innovate by launching new products and services
n
Optimize cost-to-income ratio
n
Deliver superior customer experience
Ensuring regulatory compliance, enhancing customer satisfaction, increasing operational efficiency, and improving
business agility, are key priorities for financial industry players (refer Figure 1 – Part a,b)¹.
Comply with regulatory requirements
58%
Provide better customer service/experience
43%
Improve flexibility and business agility
37%
Increase operational efficiency
36%
Manage Cost
30%
Cope with changing market
27%
Support multichannel/channel refresh
26%
Improve risk management
22%
Innovate products and services
Reduce time-to-market/time-to-value
Improve sales capabilities
21%
18%
17%
Base: 145 financial services professionals
(multiple responses accepted)
Source: Q3 2012 Global Financial Services Architecture Online Survey
Figure 1 (part a): Top priorities across global financial services companies (Source: Forrester Research, Inc.)1
[1] Forrester Research, Inc., The Transformation Imperative In Financial Services Defies Any Crisis (November 2012), accessed October 15, 2014,
https://www.forrester.com/The+Transformation+Imperative+In+Financial+Services+Defies+Any+Crisis/fulltext/-/E-RES70301
5
“What are the three to five top business requirements driving your
company’s transformation initiative?”
Use of forward-looking technology
and architecture
Comply with privacy laws and rules
14%
13%
Support differentiation, Increase market share
12%
Manage complexity
12%
Support entry into new markets
and geographies
Manage technology/application risk
11%
11%
Improve product factories
Increase Liquidity
Mitigate risk of dwindling talent/retiring
workforce/retention
Drive green banking
Other
5%
3%
1%
1%
3%
Base: 145 financial services professionals
(multiple responses accepted)
Source: Q3 2012 Global Financial Services Architecture Online Survey
Figure 1 (part b): Top priorities across global financial services companies (Source: Forrester Research, Inc.)1
A holistic management of information technology (IT) systems is vital for banking organizations to ensure roundthe-clock operations in a seamless manner. The application production management function plays a critical role in
successfully delivering IT services to an organization, which in turn helps in customer experience management.
From the viewpoint of ‘lean principles’, application production management is a cost center, thus optimizing
spends in this area is a top priority. Hence, the IT departments of organizations embarking upon this initiative have
the dual responsibility of managing costs and delivering superior services. While simplification and standardization
have been the norm till now, the current day digital economy calls for a more transformational approach is now
called for.
In subsequent sections, we discuss the emerging transformation themes that will define the contours of the nextgeneration application production management landscape, helping organizations optimize and deliver superior
customer experience.
6
Evolution of Application Production Management
Over the years, application production management services have evolved in phases - Standardize, Optimize, and
Transform (refer Figure 2).
n
In the Standardize phase, the focus is on driving consistency in service delivery across business processes while
meeting service expectations.
n
In the Optimize phase, driving cost optimizations is of paramount importance.
n
In the Transform phase, service providers bring about innovations in processes, systems, and technologies to
make application production management more agile, predictive, and responsive.
STANDARDIZE
(till 2005)
Focus
n
OPTIMIZE
(2006 - 2010)
n
Service SLAs
n
System availability
System performance
TRANSFORM
(2011and beyond)
n
n
n
n
People and
Process
n
n
n
ITIL
Root cause analysis and
specific resolutions
n
n
n
n
n
Tools
n
n
Checklists
Ticketing tools and workflow
n
n
Consolidated teams
Service catalogs
Offshore leverage improvements
Six Sigma, focused improvements
Run-books
Known Error Database (KEDB),
Knowledge portals
Monitoring tools
Ticketing tools with auto analysis
and reporting features
n
n
n
n
n
n
Business aligned IT
Comprehensive risk assessment models
Application portfolio management
Right team model with right talent at
right place
Service consolidation
Lean ITSM
Application production Management as
a service
Coherent monitoring platforms
System behavior analytics for perfective
maintenance
Knowledge-driven automation and selfhealing
Figure 2: Evolution of application production management,
(Source: TCS Internal)
The evolving technological landscape and the increased focus on customer-centricity are resulting in
transformation trends that are compelling organizations to deploy the next generation application production
management ecosystem. Figure 3 depicts the top eight trends bucketed into three categories – service strategy,
service design, and service optimization.
Service strategy
Service design
Service optimization
Business-aligned IT Service Management
Organization Design through Right Team
Model
Integrated Monitoring & Data Driven
Preventive Techniques
Application Production Management as a
Service
Comprehensive Risk Assessment
Knowledge-Driven Service Automation
Portfolio rationalization
Lean IT Service Management
Figure 3: Top transformation trends in application production management
(Source: TCS Internal)
7
The use of data analytics is becoming increasingly important to the transformational management of application
production. The ability to dissect the system’s behavioral history and use it to improve the current performance,
and the ability to model the system behavior to predict future performance, are critical use cases for advanced data
analytics. Process advancements leveraging techniques such as lean, are helping reduce the resolution time of
production issues and making teams nimble and agile. The use of smart knowledge management systems that
drive the ‘shift left’ principle of management (where the dependency on people’s knowledge levels is minimized) is
enhancing people capabilities.
Recent tools and products in the marketplace are enabling these trends. IT product vendors in the ITSM space such
as Compuware, BMC, IBM, and HP have enhanced their logging and monitoring capabilities, enabling organizations
to deliver preventive maintenance capabilities. IT Service Management (ITSM) ticketing tools like BMC Remedy,
Service Now, HP Service Manager, and IBM Manage Now are equipped with service level measurement and
performance analysis capabilities. Some have embedded capabilities of run-books and execution of automated
scripts on defined events. The next era of ITSM aims to revolutionize production management through automation.
While industry players like Arago, IPSoft, and BMC have done well in the infrastructure management space, much is
to be done in the application management area.
Emerging Trends
Business-aligned IT Service Management
Application production
management provides
businesses with a single
point of interface to the
day-to-day IT operations.
Understanding business
expectations and
accordingly aligning IT
priorities is thus an
imperative.
Traditional IT service metrics such as SLA compliance, backlog, and
application availability capture the basics of production management
efficiency, however, they often do not correlate to the business
expectations. Organizations are therefore defining a business services
catalog (refer Figure 4) that comprises a set of capabilities or services, with
business expectations compiled as key performance indicators (KPIs) against
each. The services are then mapped to a set of enabling applications, both
internal and external, and the business performance metrics are correlated
to the influencing application indicators. Adopting this approach will help the IT functions of organizations drive an
improved understanding of the business objectives and how IT services come into play, thus managing them
better.
8
Business Catalogue
IT Catalogue
Business
Objectives
IT
Imperatives
Business
Efficiency
Cost of
Operations
Business
Agility
Business
Growth
System
Adaptability
for change
Stability,
Resiliency,
Availability
Superior
Customer
Experience
Service
Quality
Business Monitoring
IT
KPIs
TCO
Effort/Time
to Market/
Resolve
System
Availability
SLA
Compliance
Derived App Support Measures
Right Source
FTE
vs.
Vendors
Onshore
vs.
Offshore
People
Competency
Score
Blended
Rate
FTE/ Apps
FTE/
Incidents
% L1
handling
Process
Maturity
Incidents/
Apps
Incidents
Reduced
Backlog
App
Complexity
Services/
Criticality
Service
Maturity
Service
Risk Score
Right
Productivity
Right
Consumption
Right
Focus
System Performance and Monitoring
Figure 4: Aligning the business and IT catalogs (Source: TCS Internal)
2
A Forrester US ITSM online survey of Service Management and Automation (SMA) professionals (2012, 2013)
indicated a 6% increase in the adoption and implementation of service catalogs (refer Figure 5).
[2] Forrester Research Inc., Develop Your Road Map For Service Management And Automation Processes
(February 2012), accessed October 15, 2014,
https://www.forrester.com/Develop+Your+Road+Map+For+Service+Management+And+Automation+Processes/fulltext/-/E-RES59734
9
TechRadar™: Business Technology Monitoring, Q3 ’13 (Cont.)
1-2 TechRadarTM: Survival phase technologies for organizations in the empowered BT archetype
Trajectory:
Time to reach next phase:
Significant success
< 1 year
1 to 3 years
3 to 5 years
Moderate success
5 to 10 years
Tech
10 years
Database performance monitoring
Reader
Network bandwidth monitoring
High
Business value-add,
adjusted for uncertainty
Transaction mapping and monitoring
Middleware and
application
monitoring
End user experience
monitoring
Dynamic data
stream monitoring
Medium
Cloud monitoring
Service level
monitoring
Data center
resource monitoring
Low
Negative
Virtual infrastructure
monitoring
Configuration
monitoring
Cloud cost
monitoring
End user behavior
monitoring
Application
fault monitoring
Software license
monitoring
Business activity
monitoring
Reputation
monitoring
Creation
Infrastructure event
monitoring
Application
fault monitoring
Survival
Growth
Ecosystem phase
Equilibrium
Decline
Figure 5: Forrester TechRadar™: Business Technology Monitoring, Q3 '13: End User Experience Monitoring and
Business Activity Monitoring Are On the Way into the Growth Phase with Significant and
Moderate Success (Source: Forrester Research, Inc.)3
[3] Forrester Research, Inc., “TechRadar™: Business Technology Monitoring, Q3 2013, Part 3 Of 5 (November 2013), accessed October 15, 2014,
https://www.forrester.com/TechRadar+Business+Technology+Monitoring+Q3+2013+Part+3+Of+5/fulltext/-/E-RES106121
10
While the business-aligned service catalog sets the right focus and governance for production management, it is
important to monitor the performance of deployment in production. This is accomplished through business
activity monitors, apart from the traditional system monitoring toolsets, and end user experience monitoring tools.
Forrester research (refer Figure 5) ascertains the importance of these tools and their increased adoption in the
industry.
Application Production Management as a Service
In the most recent Global Financial Services Architecture Survey from
Forrester Research4, 40 percent of IT decision makers in financial services
claimed to be using software-as-a-service, and about four-fifths planned to
plan to use this model going forward. Consumption-based pricing, which
includes licenses and cost of maintenance or support services, is a risk-share
model, and it increases the flexibility of application management tool use.
On similar lines, the concept of service-based pricing is making way into the
application production management space. A high-level view of such a
model is presented in Figure 6.
The thought of procuring
application production
management as a service,
combined with or without
infrastructure, is being
explored. This offers the
benefits of both consolidation
and moving to a managed
services model.
Standard pricing and on boarding
Service Scale
Service Consumption
Service Coverage
Service Level
Application Criticality
# Changes
5 x 12 Coverage
Basic
5 x 24 Coverage
Standard
7 x 24 Coverage
Premium
# Servers
# Databases
# Incidents
# Users
# Problems
# Batch Jobs
# Service Requests
Set Performance Commitments
60 Months
712 Months
Right
57
Focus
Applications
80 Applications are outliers
Achieved
Remaining
0.9
FTE/
Applications
Remaining
Remaining
0.8
FTE/
Applications
USD 50.00
Blended
Rate
TCS-On
TCS-Off
Remaining
Achieved
Remaining
Achieved
Remaining
Achieved
Remaining
USD 30.00
Blended
Rate
TCS-On
TCS-Off
Productivity - 19%
CA - 22%
Service
Benefits
Pricing
Service
Catalogue
0.7
FTE/
Applications
USD 40.00
Blended
Rate
Productivity - 6%
CA - 5%
Achieved
5
Incidents/
Applications
Achieved
Remaining
Service
Offerings
All
Applications
Aligned
7
Incidents/
Applications
Achieved
Right Source
USD 52.00
Remaining
10
Incidents/
Applications
Achieved
Right
Productivity
1 FTE / APP
1318 Months
All
Application
Aligned
Achieved
Right
Consumption
12.5 Incidents/
Applications
Catalogue
Service
Levels
TCS-On
Service
Suitability
TCS-Off
Productivity - 33%
CA - 26%
Figure 6: Service catalog based application production management provisioning (Source: TCS Internal)
[4] Forrester Research, Inc., "The Transformation Imperative In Financial Services Defies Any Crisis - The Q3 2012 Global Financial Services Architecture Online Survey Continues
To Show A Focus On Transformation", (November 2012), accessed October 15, 2014,
https://www.forrester.com/The+Transformation+Imperative+In+Financial+Services+Defies+Any+Crisis/fulltext/-/E-RES70301
11
The key focus areas of this model are:
n Commitment to application performance and service quality levels as per the service catalog
n Continuous productivity improvement with respect to preset targets
n Systematic onboarding and scaling of new portfolios or applications
Portfolio Rationalization
Traditional portfolio rationalization and simplification exercises require
gathering the inventory of applications and characterizing them by their
technical and functional attributes, cost, and risk. A systematic analysis is
then carried out on these attributes which helps to determine the target
state of each application, thereby minimizing the application footprint and
maximizing the business value generated.
Large, legacy, and diverse
technology platforms are
challenging and expensive to
manage on a daily basis.
Standardizing and
modernizing the application
landscape provides ease of
maintenance and reduces the
effort and cost in overall
application production
management.
Application Portfolio Simplification
Retain
Re-architect
Rationalize
Re-engineer
Analysis
Retire
Inventory
Figure 7: Portfolio rationalization (Source: TCS Internal)
12
In Forrester’s most recent Forrsights Software Survey, Q4 20135, majority IT decision makers across organizations
stated that consolidating or rationalizing enterprise applications is of high priority for their firms. One of the typical
outcomes of application rationalization is a more standardized, and often modernized, application landscape with
fewer, better-documented, and better-integrated business applications with state-of-the-art architecture. Such an
environment is poised to move toward outsourced application management resulting in increased operational
5
efficiencies and better cost management. The results of this Forrester research, as depicted in Figure 8 , indicate
that application modernization and consolidation are high priority for most organizations.
Business Applications Dominate Software Initiative Priorities
September 2013 “The 10 Most Important Technology Trends In Business Application Architecture Today”
“Which are the following initiatives are likely to be your IT organization’s top project and
organizational priorities over the next 12 months”
Don’t Know
Not on our agenda
Support business requirements
and corporate growth
Update/modernize key
legacy applications
Consolidate or rationalize
enterprise applications
Use custom development for
better business support
and/or differentiation
Low priority
1%
2%
10%
High priority
Critical prioroity
14%
48%
1%
7%
47%
25%
1%
12%
1%
16%
39%
21%
44%
28%
31%
36%
14%
15%
1%
Invest in mobile applications for
employees, customers, or partners
16%
36%
35%
13%
1%
Increase our use of software-asa-service (cloud applications)
18%
32% 11%
38%
4%
Expand our use of Agile software
development and processes
Embaded social (social media, social
networks, chat, etc.) into our
business processes
Outsource application support
and maintenance
29%
33%
26% 9%
1%
24%
25% 7%
42%
2%
41%
37%
17%
4%
Base:2,444 IT executives and technology decision-makers from SMB and enterprise companies
(percentages may not total 100 because of rounding)
Source: Forrsights Software Survey, Q4 2012
Figure 8: Business applications dominate business applications priorities (Source: Forrester Research, Inc.)5
[5] Forrester Research, Inc., “The 10 Most Important Technology Trends In Business Application Architecture Today Understand These Trends To Shape Your Application
Strategy”, (September 2013), accessed October 15, 2014,
https://www.forrester.com/The+10+Most+Important+Technology+Trends+In+Business+Application+Architecture+Today/quickscan/-/E-RES103541
13
Organization Design through Right Team Model
There are various operating models in the service management area that address the key objectives such as agility
in IT service delivery, scalability with respect to applications and users, and round-the-clock availability of services.
Figure 9 depicts a high-level view of an integrated organization. Its salient
aspects are the factory based delivery model, centers of excellence to drive
continuous improvement, domain-centric execution to address application
specific expertise, and DevOps concepts to tighten the integration with
development teams.
Application support services
are being consolidated into a
horizontal layer that caters to
the entire enterprise. This
includes development
activities, especially agile
implementations, and
engages production teams
well ahead in time for better
synergies.
Centralized Production Management Services
Application
Development
Architecture
& Governance
(Service Governance, Contracts, Service Catalog Mgmt,
Service Level Management, Metrics / Reporting, Performance Management,
Availability & Capacity Management, Business Continuity / DR Planning)
Service
Mgmt
Office
Build
Test
Devops
Production Readiness Assurance (Release & Deployment Management)
Service
Transition
Change & Configuration Management
Service Operation
Release
LOB 16
LOB 15
LOB 14
LOB 13
LOB 12
LOB11
LOB 10
LOB 9
LOB 8
LOB 7
LOB 6
LOB 5
LOB 4
LOB 2
Experts
L2
LOB 1
Non Production Environment Management (GBCC Release)
LOB 3
Service
Strategy &
Design
Centre of Excellence
Portfolio Management
Infrastructure
Services
Performance Management
Problem Management
Tools and R&D
L1
Factory
First Level Resolution
Operations
3rd Party
Vendors
Enterprise Command Center
Centralized Application Service Desk
Figure 9: An integrated organization design (Source: TCS Internal)
14
The key aspects of the organization design are:
n
Factory-based approach for process driven functions
Organizations consolidate level 0 and level 1 functions, such as helpdesk, command center and monitoring, and
issue resolution tasks, across the enterprise, through standardized processes and toolsets, leading to a factory
based delivery model for these functions Further, the use of known error databases (KEDBs), run-books and
automated scripts, and tools, has improved the productivity of the factory by introducing consistency and
repeatability in task execution, thus significantly reducing maintenance costs (refer Figure 10).
First-level resolution rate drives the support costs
Total cost per incident
Cost per
incident
first-level cost per incident
second-level cost per incident
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Figure 10: Shift left reduces incident support costs (Source: Forrester Research, Inc.)6
n
Domain-centric models for application knowledge intensive functions
Problem management, performance improvement, and application portfolio management responsibilities commonly known as level 2 functions - require extensive application knowledge, and are categorized by line of
business (LOB) or portfolio. Improving the productivity of the level 1 functions by building and enhancing the
toolsets and knowledge base, is also an area of focus.
n
Centers of Excellence (CoEs) for continuous service improvement
Ensuring a successful transformation hinges upon bringing about changes across people, processes, tools, and
systems, which requires domain experts. CoEs help build these capabilities by tapping into the organizational
knowledge, and leveraging external expertise through technology partnerships and alliances.
[6] Forrester Research Inc., “The Forrester Wave™: Global Workplace Services, Q1 2013, Evaluating Leading Providers Amidst a Category Redefinition” (March 2013), accessed
October 15, 2014, https://www.forrester.com/The+Forrester+Wave+Global+Workplace+Services+Q1+2013/quickscan/-/E-RES92781
15
n
DevOps
Agile development practices have led to continuous build, integration, and deployment of code into
production. This has resulted in a greater need for early engagement and feedback loops between production
operations and development teams. The DevOps concept provides for defined early engagement models, tools
for seamless transition to production, and automation in change, configuration, and release management. A
Forrester research7, results of which are captured in Figure 11, indicates that DevOps is gaining attention of
organizations.
1-1
DevOps relationships are improving
“How would you characterize the relationship between application
development and operations in your organization?”
Isolated
9%
7%
14%
Detente
10%
34%
Hopeful
36%
40%
41%
Collaborative
Seamless
6%
8%
Base: 491 SMA professionals
*Base: 181 SMA professionals
Source: Forrester/itSMF Q2 2011 US ITSM Online Survey
*Source: Forrester/itSMF Q3 2013 US ITSM Online Survey
Figure 11: DevOps relationships are important and improving (Source: Forrester Research, Inc.)7
[7] Forrester Research Inc., “The State And Direction Of Service Management: Progression, Deceleration, Or Stagnation?”
(April 2014), accessed October 15, 2014,
https://www.forrester.com/The+State+And+Direction+Of+Service+Management+Progression+Deceleration+Or+Stagnation/fulltext/-/ERES106921?aid=AST966873#AST966873
16
Comprehensive Risk Assessment
Fault tolerance, resilience, and round-the-clock system availability are key tenets
of today’s banking IT systems. Gaps and inefficiencies in the design of IT
applications, infrastructure, and processes can potentially affect service
continuity. Hence, it is prudent to identify and fix any such gaps before a
situation goes out of control.
Business continuity and
quality of service are vital in
providing a superior and
uninterrupted customer
experience. Systematically
identifying all the risks,
periodically assessing them,
and drawing up a system
improvement plan, can help
improve the resiliency of
the IT portfolio.
1. Monitoring &
Availability
2. Resiliency &
Recovery
3. Business
Continuity
4. Capacity
Management
5. Process
Compliance
6. Third Party
7. Audit and
Regulatory
8. People and
Competency
9. Security
T4
T2
Servers
T1
T1
T1
T2
T4
T4
T4
T4
T4
Mainframe
T4
T4
T4
T4
T4
T4
T4
T4
T4
Middleware
T4
T4
T4
T4
T4
T4
T4
T4
T4
Database
T4
T4
T1
T2
T4
T4
T4
T4
T4
9. Security
T4
T4
8. People and
Competency
6. Third Party
T4
7. Audit and
Regulatory
T1
T1
6. Third Party
5. Process Compliance
T4
5. Process
Compliance
T2
T4
4. Capacity
Management
4. Capacity Management
T4
3. Business
Continuity
T1
T4
2. Resiliency &
Recovery
3. Business Continuity
Application
1. Monitoring &
Availability
T1
Service 1
T1
T2
T1
T2
T1
T2
T4
T4
T4
Service 2
T3
T4
T4
T4
T4
T4
T4
T4
T4
Service 3
T2
T1
T4
T4
T4
T2
T4
T4
T2
Service ..n
T2
T1
T4
T4
T4
T2
T4
T4
T2
Probability
8. People and Competency
9. Security
T2
T3
T2
Imapct
7. Audit and Regulatory
Scoring
Risk Assessment focus areas
2. Resiliency & Recovery
T1
Service Wise
1. Monitoring & Availability
Component Wise
Rate
Service Name
Area
Key
Component
Name
Banking organizations are increasingly adopting comprehensive risk assessment
frameworks (refer Figure 12) coupled with systematic methods to identify,
quantify, and mitigate risks, as a means to ensure business continuity.
Very Low
Low
Moderate
High
Very High
Significant
T4
T3
T2
T1
T1
Severe
T4
T4
T3
T2
T1
Moderate
Tail
T4
T3
T3
T2
Low
Tail
Tail
T4
T4
T3
Figure 12: Sample comprehensive risk assessment approach (Source: TCS Internal)
17
Such frameworks are deployed, periodically (quarterly or half-yearly) evaluated, and tracked for high priority gaps,
which are closed prior to the subsequent assessment cycle.
Integrated Monitoring & Data Driven Preventive Techniques
Data analysis provides insights into system behavior and team performance. This helps in managing existing
application issues, and predicting, thus preventing, probable future breakdowns.
n
Learning from the past: An analysis of historical service ticket logs
provides good insights into system failure, and how it can be prevented.
Data analytics can help in identifying time dependent patterns,
frequently failing systems, and usual root causes. Text mining features are
also leveraged to parse through the unstructured ticket logs and identify
patterns in resolutions. This analysis helps in identifying permanent
resolutions to frequent problems, thus making the systems and processes
more stable and resilient.
Analysis of system behavior
though problem logs, ticket
databases, and system logs,
provides interesting insights
into system design and
probable behavior. Analytics,
coupled with system design
principles, can help design
reliable and effective systems.
n
Discerning the current – Aggregated and correlated event
management: An analysis of the existing health parameters of
application components, infrastructure elements, databases, and IT
systems, provides valuable insights into the current system performance,
and can be used to provide alerts on potential failure points in the production environment. Each element in the
IT landscape is individually monitored; trends indicate that organizations are focusing on aggregating these logs
in real-time and correlating them to show a holistic system performance view. Service engineers use these to
identify potential issues that may occur in the future, and take preventive measures. Tools that closely tie the
alerts or warnings to the underlying error logs through the adoption of better code instrumentation, are also
being explored. These help the system engineer identify the root causes of failure, thereby reducing the MTTR
(Mean Time to Resolve and Restore).
n
Predicting the future – Aggregated and correlated event management: System logs such as application
server logs and database server logs, are a treasure trove of information, and are used in the mathematical
modeling of system behavior and performance with respect to time, user load, and transaction volumes.
Predictive modeling techniques like what-if scenario analyses, when performed on collected data, can help in
better designing or configuration of future systems.
18
Knowledge-Driven Service Automation
Building self-healing systems and auto-managed operations can help in
reducing management efforts and building systems that are available
round-the-clock. Figure 13 shows a systematic approach to eliminate as
many alerts or incidents as possible, and to automate the ones that are
unavoidable, to the extent possible.
Mis-fired Alerts
Perennial
incidents
User raised
Queries
categories
Incidents
Alerts
Eliminate
Alerts
converting
to Incidents
Application production
management costs are
heavily influenced by people’s
productivity and efficiency.
Since operational knowledge
and analytical ability are
largely tacit, productivity and
efficiency becomes peoplecentric. Extracting this
knowledge and codifying it
into artificial intelligence
based decision support tools
leads to automation in
execution and repeatability in
team performance.
Easy to resolve
Automate
Rarely Escalate
Figure 13: Systematic process of elimination and automation to optimize operations
(Source: TCS Internal)
The industry has witnessed some success in automating data center management through the creation of a library
of knowledge articles that link potential failure points to possible resolutions. Business intelligence (BI) techniques
are used to decipher the specific root cause of potential or real issues by analyzing the system health parameters,
and the ‘right action’ is auto-initiated by referring to the sophisticated knowledge engine.
Usage of such robotic system management tools in the application production management space is increasingly
being explored, and will gain traction in the time to come. While auto healing and management systems are the
end objective, automation is definitely possible in a number of maintenance and operations tasks, to increase
productivity. Figure 14 shows a set of standardization, optimization, and transformation processes across various
functions.
19
Standardize
n
G
Release
Management
n
Reporting &
Governance
n
n
Process
Standardization
n
n
Monitoring
n
Knowledge
Management
Capacity
Management
Incident
Management
n
n
n
n
n
n
Services are Manually Tested
before a Release
Centralized metrics collection
KPI targets in sync with
business
Consolidation &
Standardization of Processes
Process compliance tracked
All components are on boarded
for monitoring
Batch Monitoring
Known errors are documented
Compilation of all resolution
scripts
Application wise Traffic analysis
with associated response times.
All incidents tracked
Process standardized
Run book Automation
Transform
Optimize
n
n
n
n
n
n
n
n
n
n
Maintain a Standard regression
library
Analytics driven Governance
Automation of Service
Reporting
n
n
n
Services aligned to Business
criticality of applications
n
n
Watch Tower for end to end
monitoring
Noise reduction
n
n
n
Compile Tacit knowledge
possessed by SMEs for shift left
opportunities
Forecasting, tracking and
reporting of demand and
capacity automated
n
n
Enrichment of alerts to reduce
investigative efforts
Despatcher and right triage
n
Have Automated tools to test
and track end-to-end
transactions.
Benchmarking of services
Stakeholder aligned
Dashboards
Differential service focus
Shared services model for all
non-core functions
Event Correlation
Alert enrichment
Assist in impact analysis
Enable Auto enrichment of
incidents or alerts for quick
resolutions / elimination
Eliminate issues at source
through predictive analytics &
machine learning
Automatic and
complete/partial resolution of
application and infra alerts
Figure 14: Automation maturity (Source: TCS Internal)
Lean IT Service Management
Adopting a combination of lean management principles and ITIL best
practices can standardize processes, and yet keep the IT ecosystem simple,
delivering significant savings with respect to time and cost. Leveraging our
domain expertise, coupled with industry experience gained over numerous
transformation initiatives undertaken for leading banking organizations
across the world, we propose a framework (refer Figure 15) that uses lean
methodologies and ITIL frameworks to simplify process, application, and
technology initiatives, thereby reducing the cost of application production
management.
Lean management principles
have dominated the
manufacturing industry for
some time now, bringing in
efficiencies and improved
quality in products and
services. Its adoption in IT
practices, such as organization
design and roles segregation, is
a recent trend
20
Optimize Portfolio
SS
Service
Expectations
CMDB
Service
Catalogue
Financial
Focus
Optimization
SD
Service
Level
Management
Operating
Model
Availability
Management
Capacity
Management
Benchmark &
Improve
ST
Release
Management
Knowledge
Management
Change
Management
Perfective
Maintenance
Configuration
Management
SO
Incident
Management
Problem
Management
Operations
Management
Self
Help
Self
Heal
CSI
Data
Gathered
Temporal
Analysis
Predictive
Analysis
Improvement
programs
Transformation
Program
Risk Management
Optimize Consumption
Lean
Optimize
Utilization
Eliminate
Waste
Optimize
Sourcing
Maximize
Value
System
Rationalization
Standardize
work
Automate
necessary
NVA activities
Strategic Vendor
alignment to
optimize
operations
Improve
productivity
through
team synergies
Rationalize
Application &
Data across
enterprise
Match
Demand
and Capacity
Automate
necessary
NVA activities
Accountability
of Vendors
Prioritize
requirements
using a Tiered
approach
Infrastructure
Rationalization,
Virtualization
Match Request
Complexity and
Resource
Capability
Consolidate low
complexity high
frequency
requests
Right
shoring
Improve Turn
around time
through single
piece flow
Optimize MIPS
&
Storage usage
Eliminate Process Redundancy
Business Aligned IT
Coherent Monitoring
Major Themes
ITSM Areas
ITIL
Predictive Analytics
Do if right first time
Mono Source
Risk Based Testing
Standardization
Parameterization
Shift Left
Team linked to work inflow
Shared Services
Innovative engagement
Figure 15: A framework to combine ITIL and lean management principles (Source: TCS Internal)
Conclusion
Each transformation theme elaborated in this paper helps organizations transform their application production
management landscape and improve cost, service quality, and service experience. However, given the large
landscape of IT applications built on a variety of technologies across different divisions of the organization, it is
important to take a holistic approach. Such an approach should cover all the dimensions of transformation people, process, systems, and technologies – while balancing the cost and return of the transformation program.
We propose a systematic and comprehensive approach (refer Figure 16) that provides a framework for a rapid tooldriven assessment of the landscape. This holistic and easily deployable approach is backed by several solution
accelerators and tools. Such a transformation framework, packaged with a set of tools that offer support through
the due-diligence and planning phases, right up to implementation, helps in delivering transformation programs
with certainty and agility.
21
Transformation
Principles
Transformation Themes
Transformation Enablers
n
Superior
Service Quality,
Reduced Risk
Right Focus
Optimize (Scope)
Stability,
Resilience,
Availability
Right
Consumption
Optimize
(Work Volume/
Scope)
Perfective
Maintenance
Preventive
Maintenance
Corrective
Maintenance
Agility,
Optimized TCO
Right Productivity
Optimize (Effort/
Work Volume)
Process
Optimization
Tools and
Automation
People
Capability
Enhancement
Global Scale,
Efficiency
Right Source
Optimize
(Cost/ Effort)
Right
Governance
Right
Services
n
n
n
n
n
n
n
n
n
n
Right
Competencies
Right
Location
n
Service Catalogue
Business – IT Aligned Scorecards
Service Risk Assessment Models
ITSM Ticket Tool Analyzer
Application Log Analyzer & Prediction Engine
Early Warning Systems
ITSM Maturity Model
Lean ITSM Framework
Knowledge Manager
Automation Engine
Global Delivery Models
Maintenance Competency Framework
Figure 16: A framework to enable the transformation journey (Source: TCS Internal)
This framework is based on four principles – right focus, right consumption, right productivity, and right sourcing.
n
Right focus helps organizations set objectives and priorities, enabled by business service catalogs and balanced
score cards, for the production support organization.
n
Right consumption improves the resiliency of the application portfolio by addressing current challenges, as well
as preparing for the future.
n
Right productivity brings in efficiencies through a holistic view of the people-process-technology triad.
n
Right source refers to the organizational fabric that is, an organization with the right set of skilled personnel will
successfully deliver the transformation program through an optimal set of identified locations for service
delivery.
By leveraging this comprehensive framework, banking and financial services organizations can conduct a rapid
assessment of their IT application landscape, benchmark their performance with industry peers, and draw a
detailed transformation roadmap, within a timeline as stringent as four to six weeks. Transformation roadmaps are
largely configured to be self-funding so that benefits from quick wins can be funneled back to drive the other
initiatives. We have observed that the ‘right focus’ and ‘right sourcing’ levers and some corrective maintenance
initiatives yield quick wins that help fund the other initiatives – ‘right consumption’ and ‘right productivity
transformation’.
Over years of experience in implementing this framework for several leading banking and financial services
organizations, we have observed that it helps organizations deliver significant IT cost savings, something like 15 –
25 percent through the ‘right focus’ and ‘right sourcing’ strategies in the first year of the program, and further 20 - 40
percent through the ‘right consumption’ and ‘right productivity’ strategies within two years of deployment.
22
About TCS' Banking and Financial Services Business Unit
With over four decades of experience working with the world's leading banks and financial
institutions, TCS offers a comprehensive portfolio of domain-focused processes, frameworks, and
solutions that empower organizations to respond to market changes quickly, manage customer
relationships profitably, and stay ahead of competition. Our offerings combine customizable solution
accelerators with expertise gained from engaging with global banks, regulatory and development
institutions, and diversified and specialty financial institutions. TCS helps leading organizations
achieve key operational and strategic objectives across retail and corporate banking, capital markets,
market infrastructure, cards, risk management, and treasury
TCS has been ranked #2 in the 2014 FinTech Rankings Top 100 of global technology providers to the
financial services industry, by both - FinTech Forward™ (a collaboration of American Banker and BAI)
and IDC Financial Insights. TCS has also been recognized as a 'Leader' and a 'Star Performer' in Everest
Group's 2014 PEAK Matrix reports for Banking and Capital Markets Application Outsourcing (AO).
Contact
TCS' Banking and Financial Services, email us at: bfs.marketing@tcs.com
Subscribe to TCS White Papers
TCS.com RSS: http://www.tcs.com/rss_feeds/Pages/feed.aspx?f=w
Feedburner: http://feeds2.feedburner.com/tcswhitepapers
About Tata Consultancy Services (TCS)
Tata Consultancy Services is an IT services, consulting and business solutions organization that
delivers real results to global business, ensuring a level of certainty no other firm can match.
TCS offers a consulting-led, integrated portfolio of IT and IT-enabled infrastructure, engineering and
assurance services. This is delivered through its unique Global Network Delivery ModelTM,
recognized as the benchmark of excellence in software development. A part of the Tata Group,
India’s largest industrial conglomerate, TCS has a global footprint and is listed on the National Stock
Exchange and Bombay Stock Exchange in India.
IT Services
Business Solutions
Consulting
All content / information present here is the exclusive property of Tata Consultancy Services Limited (TCS). The content / information contained here is correct at
the time of publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form
without prior written permission from TCS. Unauthorized use of the content / information appearing here may violate copyright, trademark and other applicable
laws, and could result in criminal or civil penalties. Copyright © 2014 Tata Consultancy Services Limited
TCS Design Services I M I 12 I 14
For more information, visit us at www.tcs.com