A unique aspect of the securities sector is that money, in all of its formsor perhaps, more accurately, information about moneyis the industry's primary product. Consequently, technology doesn't just enhance or support the value chainit 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 strategieswhich entail a certain amount of unplanned downtimewere 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 approachone 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 happenand organizations need to be prepared for themthere 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 downtimeno matter what the potential cause of disruption.
There are two critical keys to developing an effective information availability strategy:
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 redundancyrequiring 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 properlyand not lose substantial revenuefor 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:
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.