Service Level Management Profiles - Finance, Banking, and Insurance

Executive Summary

  • As a group, Finance respondents can be described as having complex multi-platform environments and using custom applications, supported by significant investments in infrastructure and service management. Further, Finance respondents generally assess services that are larger than typical for the assessments collected to date. Almost 40% of the Finance respondents had over 10,000 users for their profiled service, compared to 25% for other industries in aggregate.


  • Finance respondents do not differ significantly from the total population of respondents in terms of their overall SLM assessment rating. Finance rates like the rest of the population with an overall assessment of 68.7 versus 69.6 for the other industries.


  • Key points of interest about Finance industry respondents from a Service Level Management perspective:


    • -- A strong propensity to assess applications that were custom developed and operating in multi-platform, complex environments indicating the need for service management solutions that are interoperable, and applicable across applications and services

    -- A high cost of downtime relative to the "size" of the service they profiled, and a significant investment in infrastructure to support the service indicate the business importance of the services profiled by Finance respondents. In light of their roughly equal overall ratings, lower overall user satisfaction and less frequent attainment of availability goals, it appears that Finance respondents are not getting the return on their infrastructure management investments that other industry groups are getting.

    -- A tendency for Finance industry respondents to have achieved a level in their SLM discipline development where they are fairly accomplished, but have not taken the step to process automation. This shows up in their basic service management processes of reporting and alert/notification, and in their more sophisticated planning and workload balancing efforts.

  • Finance respondents are positioned to take the next step to automate their services and leverage the quality service management work they are doing.

    • -- To do this they will need highly interoperable, robust and scalable solutions for automation. Based on the high levels of complexity of the services they profiled, Finance industry respondents likely need highly customized Service Level Management solutions,

    -- Based on the needs they indicate, Finance industry respondents probably should seek a provider with deep expertise in the financial industries, and in complex SLM. A broad and deep services provider will be required to met the needs of the largest and most sophisticated respondents.

Introduction

  • This paper presents a comparative analysis of the patterns of Service Level Management (SLM) practices of Financial Services, Banking, and Insurance relative to other businesses and organizations. It is one of a series of papers on practices in Service Level Management.


  • Approximately 2,500 thousand middle and executive management respondents from large organizations have taken the on-line Service Level Management assessment. The information presented in this paper is based on their input, in combination with the data from an earlier survey.


  • The on-line Service Level Management Assessment evaluates the impact of 22 service level measurements on user satisfaction. The factors include key measurements of availability, performance and recovery. Also included are Service Level Management features, such as Service Level Agreements, reporting, measurement, monitoring, and documentation, resource use, trends in help desk use and software costs. A Service Level Management Rating (scale: 0 to 100) is calculated based on the relationships between these factors and user satisfaction.


  • The assessment tool can be found at www.nextslm.org/benchmark.

Key Findings

  • As many as 70% of the respondents identified as Finance industry are likely to come from Financial Services organizations. This estimate is based on analysis of the contact information supplied by a subset of assessment tool respondents.


  • Finance respondents generally followed the overall response with respect to the role of the respondent. Finance has slightly more representation of titles one level below CIO and CTO. Service Level Management specific titles are slightly more prevalent in Finance.


  • Finance sites differed significantly in the types of applications they used. The majority of Finance sites (65.1%) used custom applications. This was twice the proportion for other businesses (33.1%).


  • The majority of Finance sites (72.4%) had a mix of mainframes and distributed systems, compared to the other businesses with 34.4%. Finance had a smaller proportion of sites that relied on distributed systems only (21.1%), compared to 59.7% of other businesses that had distributed systems only.


  • Finance is experiencing higher cost trends than other businesses for acquisition and licensing of software. For Finance, 21.7% of the sites report moderate to high growth in software costs, compared to 14.4% for other businesses.


  • Down Time costs are also higher for Finance. Finance had twice the percent (53.2%) of sites with down time cost greater than $100,000 per hour compared to other businesses (26.3%). In addition, 16.7% of the Finance sites had down time cost greater than $400,000 per hour, compared to 4.6% for other businesses.


  • Finance had a pattern of more investment in "physical" infrastructure compared to other businesses, to ensure user availability. Finance employed Sysplex or Geoplex (28.8% versus 9.5%), dual or multiple server (72.1% versus 62.3%), remote mirrored disks (33.7% versus 15.9%), and network failover (49.0% versus 38.9%) more frequently than other businesses.
  • The vast majority of sites, 73.1% of Finance and 74.3% of other businesses, reported having service level agreements.


  • "Aggregated indicators" was the primary reporting method for Finance sites (48.0%). A smaller proportion (35.9%) of other business sites had aggregated indicator reports.


  • Fewer Finance sites had formal user satisfaction measurement programs (35.8% compared to 37.1%). However, there was no statistically significant difference in the mean satisfaction ratings for Finance compared to the other businesses.


  • Overall, Finance rates like the rest of the population with an overall assessment of 68.7 versus 69.6 for the other industries.


  • Finance respondents describe their IT planning capabilities as "manual", their workload balancing efforts as "approximated", and their success at capacity planning as "somewhat effective."

Respondents and Sites

For purpose of these analyses, the data was divided into two categories, Finance and "Other'. Finance includes finance, financial services, banking services, and insurance businesses. "Other" includes all other businesses, educational and government organizations. The Finance category accounts for 11.9% of the respondents. Other businesses and organizations account for 88.1% of the respondents.

Geographic Location

North America and Latin America represented a smaller proportion of Finance sites (58.1%) then other business sites (66.9%). EMEA represented a larger proportion of Finance sites (33.3%) then other business sites (24.6%).

Number of Users

Finance sites tended to have more users than other businesses. For Finance, 39.6% of the sites had over 10,000 users, compared to 25.5% for other businesses. Furthermore, 21.7% of the Finance sites had over 15,000 users, compared to 6.6% for other businesses.

Computing Environments

Significant differences were found between the computing environments of Finance sites and those of other businesses. Finance had a smaller proportion of sites that relied on distributed systems only (21.1% for Finance compared to 59.7% for other businesses). The majority of Finance sites (72.4%) had a mix of mainframes and distributed systems. For other businesses, 34.4% had a mix of mainframes and distributed systems.

Services and Applications

Finance sites differed significantly from other businesses in the types of applications they used. The majority of Finance sites (65.1%) used custom applications, nearly twice the proportion for other businesses (33.1%). Less than one percent of the Finance sites used ERP, compared to 18.7% of the other businesses. The latter finding was to be expected since manufacturing, a heavy user of ERP, is included in the other businesses.

Software Costs

Finance is experiencing higher cost trends than other businesses for acquisition and licensing of software. For Finance, 21.7% of the sites report moderate to high growth in software costs, compared to 14.4% for other businesses. For Finance, 23.6% of the sites report stable or declining growth in software costs, compared to 37.9% for other businesses.

Down Time Costs

Down Time costs are also higher for Finance. Finance had twice the percent of sites with down time cost greater than $100,000 per hour (53.2% versus 26.3%). In addition, 16.7% of Finance sites had down time cost greater than $400,000 per hour, compared to 4.6% for other businesses.

Approaches to Availability

Finance had a pattern of more frequent use of "physical" high availability infrastructure to ensure user availability than other businesses. Finance employed Sysplex or Geoplex (28.8% versus 9.5%), dual or multiple server (72.1% versus 62.3%), remote mirrored disks (33.7% versus 15.9%), and network failover (49.0% versus 38.9%) more frequently than other businesses.

IDC Availability Ratings

Finance showed non-significant differences, compared to other businesses, in their IDC Availability rating. IDC Availability ratings of HA1 (data integrity) or HA2 (work transferred) were similar for Finance (69.8%) and other business (70.6%). Finance ratings for HA3 (no-disruption) and HA4 (complete redundancy) were also similar to the general population.

Awareness of Problems

Finance showed non-significant differences, compared to other businesses, in the ways that they became aware of IT systems problems. Sixty-seven percent of Finance sites and 64.1% of other business sites had "Automatic Verification" or "Display Component Status" mechanisms.

Root Cause Analysis

Finance showed non-significant differences, compared to other businesses, in the percent of sites that employed root cause analyses for problem resolution. Seventy-seven percent of Finance sites and 79.8% of other business sites employed root cause analyses for problem resolution.

Service Level Agreements

The vast majority of sites, 73.1% of Finance and 74.3% of other businesses, reported having service level agreements. The distribution of specific terms in these SLAs differed somewhat. A greater proportion of Finance sites than other sites had SLAs that specified goals and objectives (57.7% versus 54.1%); included problem escalation procedures (59.6% versus 54.3%); or specified help desk availability (66.3% versus 60.7%).

Finance had a smaller proportion of sites that included performance incentives and penalties in their service level agreements than other businesses. For Finance, 6.7% of sites, compared to 13.2% of other businesses, included performance incentives in service level agreements. Similarly, for Finance, 16.3% of sites, compared to 30.4% of other businesses, included performance penalties in service level agreements.

Note that respondents could select more that one SLA term, therefore the percents within a primary business category will not sum to 100 percent.

Service Level Agreement Reports

For sites with service level agreements, less than a quarter (21.6% of Finance and 24.4% of other businesses) had customized reporting regarding conformity to SLA performance and availability specifications. "Aggregated indicators" was the primary report type for Finance sites (48.0%). A smaller proportion (35.9%) of other business sites had aggregated indicator reports. Component status reports were provided for 12.7% of the Finance sites and 22.7% of the other business sites. Reports were not provided for 12.7% of the Finance sites and 19.7% of the other business sites.

Meeting Availability and Performance Requirements

There were no significant differences in the degree to which Finance and other businesses met their user availability and performance requirements. Eighty-two percent of the Finance sites and 85.9% of the "Other" sites had acceptable user availability. The pattern reversed for performance. Eighty-five percent of the Finance sites and 81.1% of the "Other" sites had acceptable user performance.

Formal User Satisfaction Measurement Programs

Finance showed non-significant differences, compared to other businesses, in the percent of sites that had formal user satisfaction measurement programs (35.8% for Finance versus 37.1% for other business).

User Satisfaction Ratings

Overall, Finance had lower user satisfaction ratings than other businesses. Dissatisfied or neutral ratings were reported by 31.8% of the Finance sites, compared to 27.0% of the other businesses. Only 20.2% of the Finance sites reported ratings of very or extremely satisfied, compared to 29.9% of the other businesses. However, there was no statistically significant difference in the mean satisfaction ratings for Finance compared to the other businesses.

Methodology

This report is based on data collected during an initial research survey, combined with assessments taken in 4Q2000 and 1Q2001. The survey and assessment questions focus on a service chosen by the respondent. The validity of inferences to sites, industries, geographies, etc. is dependent on the assumption that, collectively, a representative sample of services was selected by the respondents.

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