Demystifying Observability for Business Leaders

A Guide to Building a Sound O11Y Strategy

Monitoring and Observability used to be buzzwords exclusively in IT Operations Management (ITOM) parlance, but no more. As systems get more complex, interconnected, and difficult to manage, business leaders are also taking a keen interest in the unique challenges faced by ITOM teams on a day-to-day basis, since these have a direct bearing on the way customers and partners perceive the organization.

Kris loved his job as the CEO of the country’s largest private sector bank. Life was good – he had been at the job for 5 years, he lived in a plush gated community, both his daughters attended private school, and he was good at what he did. Yes, he got stressed sometimes – after all, being responsible for the day-to-day functioning of a financial institution as large as his, and being accountable to the Board for the bank’s financial performance, risk management, regulatory compliance, and stakeholder engagement, was not child’s play. But all in all, Kris was the sort to count his blessings.

That is, until digital payments came into the picture. Suddenly Kris felt out of his depth for the first time since he had assumed the mantle of the CEO. Prior to this monumental shift in the way the bank engaged with customers, he was very clear about his goals, and was seldom concerned with the day-to-day happenings in the War Room (or the Network Operations Centre). He would receive a weekly summary of issues (mostly to do with the bank’s core banking and net banking systems) and the time taken to resolve them. He would summarize these on a slide in his weekly presentation to the Board, and that was the extent of his engagement with the bank’s ITOM function. 

Digital payments turned this system on its head. For the first time, Kris had to contend with questions from the Board and stakeholders on how the bank planned to scale, how he planned to address customer complaints on social media, and how he could guarantee minimal downtime and maximum availability of the APIs the bank would use to interact with partner ecosystems. It was the first time Kris started questioning how Observability could work for him. It was time to talk about O11Y! 

Observability is no longer an ITOM problem – it is a business problem

With the increased focus on how digital-first enterprises can guarantee a zero-latency and zero-error customer experience, how they can transition to complex, heterogeneous deployments with multi-API transactions, and how they can maintain and increase their market share, business leaders are faced with a new set of challenges:

• Increased competition: Digital payments have lowered the barriers to entry in the financial services industry, allowing non-traditional players to enter the market and offer similar services to customers. This has increased competition and made it more difficult for enterprises to differentiate themselves from their competitors. Business leaders need to plan for the future and invest in technologies that can help them stay ahead of the competition. This means continuously exploring new technologies, identifying new business opportunities, and embracing change.
  
  
• Planning for Scale: It is probably the first time that “traditional” companies like banks have seen a scale and volume of transactions akin to web-scale companies like Google and Facebook. In order to handle large volumes of digital transactions, these companies need to adopt modern technologies and practices such as cloud computing, big data analytics, and artificial intelligence. They also need to have robust and scalable IT infrastructure that can handle the increased demand of today’s digital economy.
  This can strain the budget of organizations and make it difficult for business leaders to balance the need for innovation with cost considerations.
  
  
• Cybersecurity risks: Digital payments have increased the risk of cybersecurity breaches and fraud, which can cause reputational damage and financial losses. Business leaders need to ensure that their payment systems are secure and invest in cybersecurity measures to protect their customers’ data.
  
  
• Regulatory compliance: The rise of digital payments has led to increased regulatory scrutiny, and financial institutions need to comply with a complex web of rules and regulations. Business leaders need to ensure that their payment systems are compliant with applicable standards, which can be challenging and time-consuming.

In summary, while digital payments have brought significant benefits to financial institutions and customers, they have also created new challenges for business leaders. Addressing these challenges requires strategic planning, innovation, and effective risk management – all of which are key elements of a sound O11Y strategy.

How O11Y Matters to Business Leaders

Here are a few reasons why observability is important for business leaders:

• Improved decision-making: Observability provides leaders with real-time insights into how their systems are performing, allowing them to make informed decisions that can improve efficiency, reduce costs, and drive revenue growth.
  
  
• Faster problem resolution: By monitoring and analyzing system data in real-time, leaders can identify and resolve issues quickly before they escalate, minimizing downtime and reducing the risk of customer churn.
  
  
• Better customer experience: Observability enables leaders to gain a better understanding of how their customers and partners are interacting with their products, APIs or services, helping them to identify areas for improvement and deliver a better overall customer experience.
  
  
• Enhanced collaboration: Observability fosters collaboration across teams, as it enables different departments to share insights and work together to solve problems more effectively.

VuNet’s Approach to O11Y for Business Leaders

It can be daunting for business leaders to deal with Observability. Logs, Metrics and Traces – which form the 3 Pillars of Observability – are often voluminous and difficult to visualize and correlate. When faced with a plethora of dashboards showing seemingly unrelated data, a CEO might be hard-pressed to contextualize the information presented to make a decision, or understand how to service customers and partners better. 

Thankfully, VuNet understands these challenges. Using a unique approach to observability via monitoring of business journeys and the proprietary vuSmartMaps™ platform, we present business leaders with a simplified view of the system focused on customer journeys. All the data in vuSmartMaps™, whether it is used for ITOps or BizOps or AIOps, is distilled into a set of metrics that convey the customer’s point of view. This is primarily done in the form of 2 indices called the User Experience Index (UEI) and the Operational Performance Index (OPI) – which accurately and succinctly capture the customer satisfaction and system performance in a form that CxOs can consume and understand better. 

Fig 1: Distilling the plethora of information gathered via Observability into journey metrics and the derivation of two indices to convey the idea of how satisfied customers are, and how well the system is performing – via UEI and OPI respectively.

In today’s blog, we will be talking about the UEI.

User Experience Index as a measure of Customer Satisfaction

The intent of any business is to serve customers better and its Network Operations Center is essentially a customer experience monitoring center. To that end, when business leaders arrive at any dashboard showing them the performance of their systems across the board, what they are most interested in seeing is a metric indicating how happy their customers are. 

The UEI is an index ranging from 0 to 10, and provides a real-time assessment of the user experience based on IT operational data. It is akin to the speedometer gauge on the car being turned up or down based on the speed of the car. The car’s dashboard has a number of knobs, dials and displays conveying the internal state of the car – whether an oil top-up is needed, the battery status, what range it will provide on the current fuel level, and what mileage it provides. At any point, however, the most concise, precise and real-time feedback on the functioning of the car is the speedometer gauge. If a user accelerates and it reflects the same, it means everything is running as expected. 

UEI is similar – it is the most indicative and concise index for user experience in real time. The algorithm uses a combination of Bayes and expectation probabilities based on past and current data, including operational parameters such as turn-around times (TATs), response times, errors, technical/business declines, and transactions per second, as well as elements of user psychology. The UEI can be extended to include additional metrics from mobile users through mobile analytics platforms. The UEI provides a benchmark for application performance and helps stakeholders from IT support, operations teams, DevOps, and CXOs understand the state of the enterprise. Historical analysis of UEI data can be used to improve performance, availability, and overall user experience.

The function of the UEI is to capture the psychology of customers and their expectations of a business journey’s experience. In our context, UEI depends on minimum and maximum TAT as computed from historical trends. If the actual TAT is less than or equal to the minimum TAT, the value of UEI is ten, indicating the best possible user experience. Similarly, if the actual TAT is more than or equal to maximum TAT, the value of the UEI is zero. Between these two extremes, customer satisfaction varies in a nonlinear fashion. We compute the satisfaction of the customer on any journey based on an empirically arrived-at value called the “psychological” TAT, which is a value less than the maximum TAT, when customers start getting frustrated. The UEI formula takes minimum and maximum TAT as inputs and models the customer satisfaction with the help of a smooth continuous function.

Benefits of UEI

Not only does the UEI provide real-time feedback on user experience, but its historical variations and trends can provide valuable insights and comparative analyses on the performance of various journey types (or transaction types), channels, payment systems, partners and banks vis-a-vis each other. For instance, if a lending journey is consistently reflecting a low UEI versus a payment journey, the financial institution might want to reassess the partner APIs it is interacting with for the lending workflow. If a payment aggregator is seeing low UEI on one bank’s transactions versus another, it can recommend an infrastructure revamp to the former. 

Fig 2a: Scaled UEI shown on a dashboard detailing a particular customer journey. Due to low technical declines, the UEI is high, which means customer experience has been largely satisfactory.

Fig 2b: Low UEI on a particular day due to high rate of technical declines

With a single metric denoting customer experience, operational health and the overall state of the system and customer journeys, business leaders now no longer need to get into the nitty-gritties of ITOM dashboards or try and make sense of the plethora of data thrown up by the Observability tool(s). The UEI is a quick way to make sure everything is okay, and the number of times it falls below a certain threshold is the yardstick for when CxOs need to take stock and reassess certain deployment, infrastructure, partner engagement and scaling decisions. 

To know more about how VuNet can help you make decisions faster and better via its pioneering Observability tools for business leaders, contact us at info@vunetsystems.com.