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Protecting the Infrastructure from Operational Risk; A Real Competitive Advantage

Created: 05 Oct 2012 • Updated: 11 Jun 2014
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Basel II Accord for International Banking Operational Risk is defined as, “Risk of loss from inadequate or failed internal; processes, people, and systems or external events “.   When Processes, People or Systems fail, whether it be from internal or external events, the losses can be substantial.  As an example, the Ponemon Institute estimates that worldwide organizational are losing over $35 Billion monthly from data center downtime.  Nicholas G. Carr point out in his seminal Harvard Business Review article IT Doesn’t Matter, “today, an IT disruption can paralyze a company’s ability to make products, deliver its services, and connect with its customers, not to mention foul its reputation … even a brief disruption in availability of technology can be devastating.”

There are two primary ways for an organization to increase value.  The first way is to increase expected gains.  Typically, most organizations exclusively focus on increasing expected gains and IT has been used to increase value for many organizations.  Information Technology has transformed the way we do business.  IT increases operating efficiencies, extends our reach globally, accelerates the overall pace of business.  It has changed the way we sell; it has changed the way we buy; and it has even changed the way we meet, read books and chat with colleagues.

It is understandable that most organizations focus on increasing expected gain, in general people are wired to spend more time thinking about how they are going to succeed.  Only a fraction of the time do people think about all the ways that things can go wrong.  Controlling operational risk takes a different path from increasing gains and this second, equally valid, approach to increasing value is often overlooked.  That second way to increase value is to reduce expected losses and considering that organizations are losing over $35 Billion monthly there is tremendous untapped potential within the IT infrastructure to reduce costs by controlling operational risk.

The growing complexity and increased dependence on information technology has introduced new risks and transformed some benign ones.  What was once considered a minor problem, like a software error, can now cause the same economic loss as a fire.  A single bad bit can ruin an entire day.  Symantec , in fact,  has identified over 5,000 risk signatures within the IT infrastructure.  Rationally controlling these operational risks will reduce increase service level, reduce failures, mitigate economic losses and help drive competitive advantage.

Blog Author:
Mr. Wenk is Principal Resiliency Architect for Symantec’s Storage and Availability Management Group. He has consulted worldwide with large Fortune 500 customers; Generating demand for Cloud Infrastructures and architecting private cloud solutions for technology-intensive organizations in over 20 different countries; tackling some very challenging, complex, and ambiguous problems. His experience includes developing architectures and strategies for highly available, resilient and secure infrastructures in heterogeneous IT environments. He has performed quantitative operational risk assessments that were used to justify the significant investments required to build, transform and maintain resilient infrastructures; he has performed technology assessments, IT consolidation and transition strategies, and developed site selection criteria for complex heterogeneous technology consolidations. In addition, he has developed charging methodologies, performed capacity planning and performance evaluations in large, complex IT environments. Dennis has developed a number of risk-based services that quantify the return on technology investments that increase resiliency and improve continuity programs. His background includes experience with EMC Consulting as Senior Cloud Architect and with Hitachi Data Systems as Principal Global Solution Architect for High Availability Solutions, IBM Global Network as an Outsourcing Project Executive; Comdisco where he was Western of Director Technology Consulting; KPMG where he was Senior Manager, Group Leader for IT Operations and Transformations, as well as Heller Financial where he served as VP/Information Processing. Dennis Wenk earned an MBA in Accounting and Finance, BS in Computer Science from Northern Illinois University. He is a certified Information Systems Auditor (CISA), Certified Data Processor (CDP), and Certified Systems Professional (CSP), certified in ITIL Service Management. He was awarded Best Management Paper by Computer Measurement Group, and currently he sits on the Advisory Board for Continuity Insights and Serves as their Technology Chair. He has held the Cloud Special Interest Group Leader for the Outsourcing Institute and the Business Continuity Focus Expert for Information Technology Infrastructure Management Group. He is an advisor to Business Continuity Services Group. Dennis has written award-winning professional articles, white-papers and has been published in Information Week, Computer Performance Review, Trends and Topics, Continuity Insights, Infosystems, Computer Measurement Group, and DR Journal. He is a regular speaker at world-wide industry conferences. Some current topical expertise include; ‘3 Simple Complexities of Data Protection’, ‘Think About Never Failing, Not How To Recover’, ‘Focus On The Largest Source Of Risk: The Data Center’, ‘Risk Economics’, ‘Gaining Competitive Advantage: The Myth of the Resiliency Paradox’, ‘Eco-Friendly Data Center’, ‘Virtualization, a Resiliency Enabler’, ‘Economic Impact of Interruptions’, ‘Risk-based Business Continuity’, ‘High-Stakes Business Impact Analysis’, ‘A Risk-Based Approach to Internal Controls’, and ‘Resiliency: Clearing the Five Nines Hurdle’.