Comment: Risk and reward in automation


Comment: Risk and reward in automation

Microscope contributor

As enterprise application software is used more and more to automate complex business processes, organisations expose themselves to risks introduced by having mission-critical operations reliant upon IT and, more significantly, the people who operate these systems.

In addition, without the manual checks and balances used to record and audit business transactions, auditors and compliance officers are demanding that IT be capable of accounting for all its activities.

Mergers, acquisitions, company restructuring and new IT applications are among the many drivers that have meant end-to-end process chains within organisations have become more complex. As they traverse multiple business and IT application silos, it is often unclear how processes are linked together.

Business process management and advanced application integration technologies mean it is possible to automate the exchange of information between systems. Process flows can be mapped with conditional dependencies embedded to ensure multiple paths are supported and all eventualities can be catered for. External business events can automatically instigate internal IT processes. In addition to status checking the outcome of steps in a process, information extracted from output report content checked against field values in database tables can help shape more intelligent decision-making.

Controllers need a clear view of how core business processes are performing. A business critical process taking an unduly long time to run, or failing to complete, can place a company at risk.

The compliance initiatives introduced with Basel II and Sarbanes-Oxley were distant memories during the recent collapse of the global financial services industry. Greater transparency and more rigorous controls are needed to satisfy the diligence of external stakeholders, such as national governments.

Organisations are learning that by taking people out of processes, they are required to account for actions the systems take on their behalf. Where software is used to control corresponding processes, enterprises must be aware that auditing will be required for all IT activities.

Also, retrospectively manipulating and reporting on IT actions will not be sufficient if auditor certification of business operations is required. IT departments must establish and maintain an ongoing record of all business activities. Precise details of who did what where and when need to be captured, so that auditors can independently analyse and report on business operations.

The bottom line
Automating and streamlining business processes can provide direct financial gain. Reducing the time it takes to get new orders into a company’s financial systems and generate customer invoices will improve cashflow. More efficient tracking of actual project performance against forecast data will help ensure projects complete on time and within budget.

As well as satisfying regulatory compliance and governance directives, auditing processes provides IT operations with a tool to analyse and optimise workload. Historic audit files automatically archived to long-term storage can be retrieved and processed alongside performance data for trend analysis and capacity planning. IT management becomes better informed and can respond more strategically when advising on how technology can support business growth.

IT process automation technology should be a key component of an organisation’s compliance and risk management strategy. Automation ensures best practice execution of critical processes, increasing reliability and reducing exposure to business risk. It can also help reduce overheads by ensuring timely processing of business requests. Optimised processes make better use of business services as well as hardware. Acquisition of additional computing resources can be avoided, or at least deferred. Companies can get more from their resources through more efficient workload balancing and removing inherent latency.

Surveys show that up to 80% of the annual IT budget for many organisations is spent maintaining systems. Automation can help alleviate operating costs and support enterprises in getting a better yield from investments. At the same time, automating the processes that support business operations enables enterprises to mitigate IT risk and become fully accountable for their actions.

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