The many definitions of operational resilience

The Bank of England and the UK’s top financial regulators define operational resilience as “the ability of firms and the financial system as a whole to prevent, adapt, respond to, recover, and learn from operational disruptions.” IBM takes a more expansive view, defining the term as “the ability to rapidly adapt and respond to dynamic changes – opportunities, demands, disruptions, threats – with limited impact to the business, and with a scope that spans people, process and IT.” PwC calls operational resilience a “Swiss army knife to survive the next crisis.”

Operational resilience asks organizations to focus on the nature of the business itself. This means examining exactly how the company  operates, and what elements of the business are necessary. Once these core elements have been identified, the next items to consider are 1) the minimum operational requirements to deliver those core elements, and 2) what happens if those core elements are not delivered effectively  (i.e. the economic impact). Providing the tools to answer these questions is the essence of how process mining supports operational resilience.

Beyond disaster recovery

Clearly, operational resilience is more than simply business continuity and disaster recovery planning, although it does incorporate both these elements. Any modern business will have a business continuity plan in place; many larger organizations will have more than one, covering a range of different scenarios, business units, and/or physical locations. Often, organizations will have a separate technology disaster recovery plan, focusing on critical IT infrastructure and similar.

The challenge is that these plans too often sit in isolation. The risk team prepares a plan without input from other departments, or front-line workers have their own (written or unwritten) plans to keep the machinery running in the event of a disaster. Aligning an entire business under one recovery plan is far more complex than the alternative offered by an operational resilience approach. That is, deciding the core functions the business must offer, then orienting the phases of recovery towards maintaining or re-starting those functions as quickly as possible.

An example from the banking sector

What is a likely response if a bank’s ATMs stop working, through a technological hitch, a cyber-attack, or some other difficulty? A traditional disaster recovery approach would be to make sure the ATMs are working again as quickly as possible. 

However, an operational resilience approach looks at this a different way, and asks, “What is the core function here?” In this example, the core function is not whether the ATMs are working or not—the core function is the bank’s customers being able to access their money when they want to.   

Process mining would be able to help the bank identify whether, in the absence of functioning ATMs, more people are walking into physical branches to withdraw funds, or switching to other forms of payment. This would lead to the question of what additional stresses are being placed on branches or other payment systems, and if this means more staff or additional technology bandwidth are required. Operational resilience means being able to forecast this alternate demand, while also having at least a broad idea of the maximum amount of time customers will tolerate ATMs being unavailable.

How process mining supports operation resilience

The fundamental goal process mining is an understanding of operations across all levels, and a regular feedback loop to refine these processes when new challenges arise. When crisis strikes, process mining can rapidly identify pain points, so your business can quickly find a solution to ensure it gets back on track quickly and smoothly.

With this mindset, ‘stress testing’ core business functions with various scenarios and closing out any gaps identified becomes a crucial element of preparing for the next crisis, and a clear example of how process mining supports operational resilience. Process mining is an example of an analysis tool that seeks out these vulnerabilities, allowing for detailed insights and a transparent visualization of how an organization’s processes actually work.

An effective process mining tool will be able to simulate the impact when a particular process flow is interrupted, building a response to questions like:

  • Exactly which parts of a given process come under stress in different possible crisis situations? 
  • What are the variants or alternate services that can be implemented? 
  • What are the most common areas of process breakdown, and how can these be reinforced?

Another way process mining supports operational resilience is through a streamlined approach to compliance. With a process mining tool like Signavio Process Intelligence, organizations can make quick and easy real-time compliance checks based on their own data, by comparing the way a process should run, to the way it actually runs. 

This can be extended to create a compliance view into a company’s operational resilience strategy. If a crisis occurs and core business elements are impacted, which of the controls already in place may fail as a result, and what are the regulatory obligations that are at risk of not being met? Answering tough questions like these in advance is how process mining supports operational resilience—by simulating the impacts of a crisis before it ever hits.

Operational resilience with Signavio

Process mining doesn’t just aid in planning for a crisis—it’s useful to have right in the middle of any challenge. Find out more about how process mining supports operational resilience in times of a crisis with Signavio’s exclusive webinar, or download a comprehensive guide to the topic from one of the world’s leading consultancy firms. If you’d like to learn more about how Signavio can support your business to plan for the future, why not sign up for a free 30-day trial, today. 

Published on: June 25th 2020 - Last modified: August 21st, 2020