Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
_la force de l’engagement MCAn informal ReportIT Performance Management in aFinancial Crisis
2Index• Historical causes of the Argentinean financial crisis• IT situation at the Bank• The crisis starts• Impact of the ...
3Argentina in the worldArgentina USA CanadaArea 1M 3.8M 3.9MPop. 36M 310M 31M
4Economic evolution of Argentina
5Causes of the poor economic growth• Protectionist policies• Populist governments• Commercial deficit• Fiscal deficit• Inf...
6Inflation & hyperinflation
7Growth & Unemployment in the 90s-5051015201980 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000% GDP per capita % U...
8Situation at the Bank (2001)• From 40 to 130 branches• From 1500 to 4,000 employees• From 300,000 to 900,000 accounts• Ma...
9Chronology of the crisis• 30/11/01 : A run on the banks begins, withthe central bank reserves falling by $2billion.• 01/1...
10Internet transactions•The number of concurrent user increased 5 to 6 times from one day to the other.•We proceeded to ch...
11Internet infrastructureInternet
12Call center•The talk time increased•People don’t like to talk with machines when in a crisis•Try not to be too cheerful ...
13The trick of the withdrawal limitBank 1Bank 2Bank 3Bank 1Bank 2Bank 3Interchange banksystemThe system became saturatedTh...
14Mainframe – The perfect StormThere weren’t enoughresources for the on-lineThe branches workedin extended modeThe nocturn...
15Chronology of the crisis• 30/11/01 : A run on the banks begins, withthe central bank reserves falling by $2billion.• 01/...
16The solution• Default on the national debt. The countrydeclares itself in bankruptcy.• End of the dollar as a legal curr...
17The people were not happy with the solution…
18Working in the Solution• Modify or replace almost all the core programs of the bank.• Checks, mortgages, savings account...
19How they worked in the Solution• There were only 3 environments :• unitary test• integration test• production• The tests...
20Can it happen to you? Can it happen now?YESThe IQ of the governments doesn’t look like ithas improved in the last yearsT...
21But in 10 years it should have new solutions…YES, and new problems…The mainframe has reserve capacity like CPUs that can...
22Long duration impact in the bank1992 2001 2003Branches 40 130 60Empl. 1500 4000 2000Accounts 300,000 900,000 700,000Hw =...
23Long duration impact in the country• -11% GDP in 2002 alone (the 2008 financial crisis in US was a - 3.8%)• 40% inflatio...
24Lessons learnedThe possibility of a financial crisis has to be part of the IT contingency plan
25Always have a plan “B”“Plan B” for the rescue effort of the Chilean trapped miners
26Document the way that performance can beimproved
27Design infrastructures as flexible as possible
28Never underestimate “ad-hoc” solutions
29Keep an eye on your team’s morale
30Be prepared to throw everything you know outof the nearest window
31Don’t worry about what top managementthinks
32CMG 2010
Upcoming SlideShare
Loading in …5
×
Upcoming SlideShare
Application Performance Management - 5 Steps to Performance Assurance for Dynamic IT Environments (451 Group & eG Innovations)
Next

Share

IT Performance Management in a financial crisis context

This a presentation presented in the CMG International conference in 2010 about my experiences as Performance Manager during the Bank Panic in Argentina in 2001. It won the Edward Mullen Award in that year.

Related Books

Free with a 30 day trial from Scribd

See all

Related Audiobooks

Free with a 30 day trial from Scribd

See all
  • Be the first to like this

IT Performance Management in a financial crisis context

  1. 1. _la force de l’engagement MCAn informal ReportIT Performance Management in aFinancial Crisis
  2. 2. 2Index• Historical causes of the Argentinean financial crisis• IT situation at the Bank• The crisis starts• Impact of the crisis on the transactional channels• The “solution” to the crisis• Financial impact of the “solution”• Impact of the “solution” on software development• Long duration impact on the country and the bank• Lessons learned
  3. 3. 3Argentina in the worldArgentina USA CanadaArea 1M 3.8M 3.9MPop. 36M 310M 31M
  4. 4. 4Economic evolution of Argentina
  5. 5. 5Causes of the poor economic growth• Protectionist policies• Populist governments• Commercial deficit• Fiscal deficit• Inflation• Public debtCommercial deficitFiscal deficitInflation&Public debtProtectionist policies&Populist governmentsPoliticalInstability
  6. 6. 6Inflation & hyperinflation
  7. 7. 7Growth & Unemployment in the 90s-5051015201980 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000% GDP per capita % Unemployment
  8. 8. 8Situation at the Bank (2001)• From 40 to 130 branches• From 1500 to 4,000 employees• From 300,000 to 900,000 accounts• Mainframe• 30 AIX servers• 300 Windows servers• Transactional channels• Human tellers• ATMs• Call Center• Internet• A Capacity planning and performance process in place andworking
  9. 9. 9Chronology of the crisis• 30/11/01 : A run on the banks begins, withthe central bank reserves falling by $2billion.• 01/12/01 : The government imposes a$1,000 per month limitation on personalbank withdrawals in cash. Checks andelectronic transfers go up.• New Year’s Eve party, the president told usthat “this will be a hard year”.• The Internet traffic and the call center callssuddenly skyrocketed. ATMs becameempty in a matter of hours.
  10. 10. 10Internet transactions•The number of concurrent user increased 5 to 6 times from one day to the other.•We proceeded to change the architecture of the main page of the bank to reducethe workload in the system, but it was only a partial solution.
  11. 11. 11Internet infrastructureInternet
  12. 12. 12Call center•The talk time increased•People don’t like to talk with machines when in a crisis•Try not to be too cheerful in the recorded message during the waiting time•Try not to be too obvious in the recorded message during the waiting time•Having young call center operators is cheap, but it could backfire•Having call center operators abroad is probably inconvenient
  13. 13. 13The trick of the withdrawal limitBank 1Bank 2Bank 3Bank 1Bank 2Bank 3Interchange banksystemThe system became saturatedThe checks clearing took more time than theallowed legal periodThe number of bank accounts exploded,branches started to open Saturdays to copewith the demand
  14. 14. 14Mainframe – The perfect StormThere weren’t enoughresources for the on-lineThe branches workedin extended modeThe nocturnal batchprocess took moreThan 24hsThe PerfectStormThere wasn’t an easy way to increase the capacityThere wasn’t hardware available to increase itAll the banks had the same problem
  15. 15. 15Chronology of the crisis• 30/11/01 : A run on the banks begins, withthe central bank reserves falling by $2billion.• 01/12/01 : The government imposes a$1,000 per month limitation on personalbank withdrawals in cash. Checks andelectronic transfers go up.• 20/12/01 : A riot leaves 28 people dead, thepresident has to resign. The twosubsequent presidents last only days.Several supermarkets are looted. Argentinadeclares itself in default.• 02/01/02 : President Duhalde takes office.• 06/01/02 : The “solution” is approved by theCongress.• New Year’s Eve party, the president told usthat “this will be a hard year”.• The Internet traffic and the call center callssuddenly skyrocketed. ATMs becameempty in a matter of hours. The ITinfrastructure collapses under the workload.• The software development team starts towork to adapt the systems to the “solution”
  16. 16. 16The solution• Default on the national debt. The countrydeclares itself in bankruptcy.• End of the dollar as a legal currency inArgentina.• The old parity 1 dollar = 1 peso became 1dollar = 3 pesos.• The mortgages are converted to a 1 = 1parity.• All the bonds that the banks and thepersons held became “junk bonds” with 0value.• All the bank accounts in dollars had to beconverted to pesos, the same withmortgages and investments.• All dollar investments lose 66% of theirvalue.• Most of the bank assets are reduced to33%, all the banks are technically broken.But, didn’t all this mess help protect the financial system from becominginsolvent?
  17. 17. 17The people were not happy with the solution…
  18. 18. 18Working in the Solution• Modify or replace almost all the core programs of the bank.• Checks, mortgages, savings accounts.• General Ledger, financial reports• Transactional channels (web, IVRs)• New programs like the system to manage the legal claims ofthose people which were on “especial situations” were madeto extract more money that the central bank allowed• Everything had to be done in a question of days.
  19. 19. 19How they worked in the Solution• There were only 3 environments :• unitary test• integration test• production• The tests were reduced to their bare bones.• The emphasis was on the communication not in thedocumentation.• The development teams were all on the same floor.• The technical support team was 2 floors below.• The operations people that had to interpret the Central Bank measureswere there.• Everybody understood the importance of what they were doing.
  20. 20. 20Can it happen to you? Can it happen now?YESThe IQ of the governments doesn’t look like ithas improved in the last yearsThe financial system is more and moredependent on IT
  21. 21. 21But in 10 years it should have new solutions…YES, and new problems…The mainframe has reserve capacity like CPUs that can beactivated on demandCloud computing could also help…But the providers of these services could have an attitude of “paynow, use later”If the cloud is shared by companies of the same market (e.g.banks), and the cloud is in the same geographical place it couldbecome saturatedWhat will be the impact on new technologies like smartphones?
  22. 22. 22Long duration impact in the bank1992 2001 2003Branches 40 130 60Empl. 1500 4000 2000Accounts 300,000 900,000 700,000Hw = ↑ OutsourcedSw = ↑ Opportunity
  23. 23. 23Long duration impact in the country• -11% GDP in 2002 alone (the 2008 financial crisis in US was a - 3.8%)• 40% inflation in 2002• 20% of unemployment• 63% of families below the line of poverty• 20% of families without enough money to buy food• The emigration rate multiplied by 6 in 2 years• Larger between university graduates and post-graduates
  24. 24. 24Lessons learnedThe possibility of a financial crisis has to be part of the IT contingency plan
  25. 25. 25Always have a plan “B”“Plan B” for the rescue effort of the Chilean trapped miners
  26. 26. 26Document the way that performance can beimproved
  27. 27. 27Design infrastructures as flexible as possible
  28. 28. 28Never underestimate “ad-hoc” solutions
  29. 29. 29Keep an eye on your team’s morale
  30. 30. 30Be prepared to throw everything you know outof the nearest window
  31. 31. 31Don’t worry about what top managementthinks
  32. 32. 32CMG 2010

This a presentation presented in the CMG International conference in 2010 about my experiences as Performance Manager during the Bank Panic in Argentina in 2001. It won the Edward Mullen Award in that year.

Views

Total views

226

On Slideshare

0

From embeds

0

Number of embeds

6

Actions

Downloads

0

Shares

0

Comments

0

Likes

0

×