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Trading Technology

12:05 PM
Jim Grogan
Jim Grogan
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Holistic Information Availability

The securities sector's recovery strategies have always been valuable, but now a more proactive approach is needed to ensure information availability.

A unique aspect of the securities sector is that money, in all of its forms—or perhaps, more accurately, information about money—is the industry's primary product. Consequently, technology doesn't just enhance or support the value chain—it is the key enabler. Computers and networks are the factory, the warehouse and the distribution channel. For this reason, securities firms historically have been on the forefront of IT innovation. As an example, securities firms were among the earliest adopters of disaster recovery solutions.

Since this adoption, a number of high-stakes scenarios have required securities firms to go to great lengths to guarantee and ensure disaster recovery and operational continuity. Throughout the late 1980s and early '90s, federally mandated disaster recovery solutions proved to be valuable, although they tended to be more reactive in nature and suited to resuming operations once an interruption already had occurred.

The events of Sept. 11 changed this paradigm by highlighting the financial sector's need to embrace the concept of prevention, in addition to recovery. It also became apparent that disaster recovery strategies—which entail a certain amount of unplanned downtime—were not ideally suited to support a world economy relying on continuous information availability and rapid restoration of key operations. While superior disaster recovery capabilities have been, and will continue to remain, a necessity, it has become clear that the industry requires a more holistic, proactive approach—one that ensures information availability by combining elements of not just disaster recovery, but also redundancy and high availability.

At the heart of information availability is the reality that while disasters do happen—and organizations need to be prepared for them—there are a host of other highly more likely scenarios that aren't disasters per se, but still can disrupt and wreak havoc on operations. These include more mundane, everyday events such as hardware outages, network outages, software glitches and even human error.

Defining Information Availability

In contrast to traditional disaster recovery, information availability goes one step further to proactively ensure that people always remain connected to their most critical information with no downtime—no matter what the potential cause of disruption.

There are two critical keys to developing an effective information availability strategy:

  • Gaining an enterprisewide view of all applications and determining which ones require which levels of availability and, hence, what level of support.

  • Determining how to achieve information availability in the most cost- and resource-effective manner.,
  • When asked which systems and applications are most critical to their organizations, most securities IT professionals are apt to point to the redundant infrastructure and the resilient architecture supporting mission-critical trading applications. When one considers the speed of trade execution and the hundreds of factors that are rolled up in a highly precise, split-second algorithm to trigger a transaction, it is no surprise that trading systems and applications often rank highest in terms of importance to the organization. For this reason, trading applications often demand redundancy—requiring real-time mirroring of information to ensure that in the event of disruption to a primary system or application, a secondary configuration with concurrent information ensures both the integrity of the data and the availability of the application.

    Continuous Data Capture

    High availability represents a second application category. These applications typically can tolerate just a few minutes or hours per year of processing downtime because critical data continues to be "captured," even if the processing engine is down.

    Consider, for example, securities settlement applications. Several minutes or hours of processing delay time will not exert an overly detrimental impact, so long as data continues to be captured and can be processed within the allowable time limits each trading day. However, for the sake of customer convenience and service, these applications call for the fastest possible resumption of processing.

    Like their siblings in other industries, securities firms have increased their embrace of and reliance on technology to automate more functions, with the goal of operating more efficiently and profitably as businesses. New regulations and increased pressure for lower desired recovery times have caused the high availability application category to grow substantially in recent years.

    Traditional disaster recovery approaches, which typically entail a predefined amount of downtime, are best suited for those applications that are important to a securities firm but without which the securities firm can function properly—and not lose substantial revenue—for a few hours or even a few days. Included in this category are such applications as wealth management, human resources, procurement and brochure-ware.

    Ensuring Superior Information Availability

    Once a securities firm has assessed its application landscape and determined availability requirements, the question then becomes: How can superior information availability be achieved with the lowest total cost of ownership? Oftentimes, an exploration of this question leads to another: Is it more effective to administer and maintain an information availability strategy internally, or through a third-party provider? There are several key considerations, including:

  • Does my IT team have the proper skill sets, such as administering midrange systems and the applications that may need support, for example, or will this require special training? If so, will this detract from its ability to contribute to other revenue-generating projects? Would it be more cost-effective to leverage other resources that already possess this or other kinds of specialized expertise? Is the required skill set in a rapidly changing technology area, such as security, that requires frequent retraining or skill refresh? It is not sufficient to consider volume of manpower and salary resources alone.,

  • How can I accommodate future changes? An evaluation of availability needs is rarely a one-time exercise. Rather, availability must be reevaluated and reassessed consistently, allowing for flexible adjustments as information availability requirements change. Modifications to supporting architectures and technology also should be quick to implement. For example, it can take organizations several days, weeks or even months to implement redundant systems on their own. Unfortunately, mission-critical securities applications, particularly those falling within the redundant category, can ill afford such lag time. ,

  • How can I best ensure support for such a diversity of application needs, systems and procedures? You may want fully dedicated systems for applications requiring redundancy. Simultaneously, you may wish to "share" backup systems for applications with less-stringent availability requirements for higher value. And finally, you may want disaster recovery seats so that in the event of a disaster, your employees have access to everything they need—including office space and phone lines—to resume operations. As you consider options, consider the importance of this kind of blended approach to your organization. You also may consider the importance of a platform-agnostic approach—no matter what types of systems your organization runs, or chooses to run in the future, enabling support for these systems should not be a challenge.,

  • Which approach will enable you to feel and maintain the highest sense of control over critical applications? To date, application manageability and control have been perceived as benefits of the in-house model. As you evaluate options it is important to consider that the third-party approach no longer requires one to relinquish "the keys to the kingdom." Rather, new approaches allow for applications to be maintained and managed in-house, while redundant systems are hosted and administered in a remote location, enabling superior data protection, application reliability and security.


    Jim Grogan, Vice President of Consulting Product Development, SunGard Availability Services

    Jim Grogan is vice president of consulting product development for SunGard Availability Services. He specializes in the conception and implementation of information availability programs for organizations in several industries, including financial services. Grogan can be reached at [email protected] securities sector's recovery strategies have always been valuable, but now a more proactive approach is needed to ensure information availability.

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