I have a growing appreciation of why certain financial institutions have got themselves into so much trouble. Attempting to manage a business, supervise minute-by-minute trading and review brokers' activities is hard enough, but its made even more challenging by the fact that many firms still attempt to do this by the human study of exception reports. I say 'study', because that's what it looks like: some very talented people picking through printed reports line by line, looking for patterns or anomalies. In some cases this is essential - a necessary step in what is being done is to review the past. But as the recent TV ad from IBM shows, and a range of software companies have hinted at in the past, running your business looking in the rear-view mirror is not only tricky, its downright dangerous.
So what do you do? Well, one approach is to take the printed exception reports and re-make them electronic. Keep them in a format where some clever software can supplement the clever people and look for the obvious patterns, based on predefined business rules, and the less obvious patterns, based on some seriously smart heuristics. But the rear-view mirror is still your issue. You are catching errors after its too late to do much about them - much beyond making a correction, apologizing heavily and reprimanding the employee that messed up.
The second approach is to revert to the old days of decision making: a person makes the decision, but there is an approval process before any decision is actually executed. Great - its hard to screw up - and harder still to get anything done. For financial services that depend on the trading of smart, bullish individuals, running in near real-time, that just doesn't fly. But as the business rules management guys will tell us, even for less challenging environments than securities trading, automated business rules management is still not widespread enough in business. Why? Because for them to work as part of the whole, they need to be part of the overall business process. Not just tacked on the side where they can be bypassed easily, but fully embedded and completely enforced. And for that you need a system in place for managing the business processes in which the rules are enforced. A system for doing this is not email, its a real system that guides the correct flow of work, its delivery (between human beings, business rules and other systems). It doesn't have to be a multi-hundred thousand dollar BPMS / SOA / software vendor's ticket to paradise. But it does need to exist and start to become part of the workings of the business.
For now, making the rear-view mirror work better, while giving intelligent people more time to lift their heads and look ahead is my goal for clients. I will help them get to the next step when they have time to see the value of doing things differently.
A post from the Improving It blog
