As the world constantly changes around us, CEOs are transforming and reinventing their businesses in response to economic and geopolitical challenges, technological leaps — particularly AI, climate risk and evolving customer preferences. PwC’s 27th Annual Global CEO Survey revealed that 45% of global CEOs doubt their companies' long-term viability if they continue their current path. This need for transformation is heightened by a shifting regulatory landscape, where regulators worldwide (including Australia's APRA) are increasingly demanding operational resilience be on par with financial resilience. This has led to new policies and guidelines to strengthen critical systems and processes.
So, how can leaders best prepare their organisation to prioritise operational resilience and better serve stakeholders? How can they build business resilience, improve trust, minimise risk, and unlock new opportunities for innovation and growth?
Observability — the steel thread, connecting systems, applications, infrastructure.
Operational resilience is no longer a luxury but a strategic imperative. In the modern business world — with its many interconnected systems, applications and infrastructure —'observability’ has emerged as a steel thread to build this resilience, weaving itself through every layer of a business transaction.
Observability is the strategic design of a system to enable continuous monitoring and analysis, providing real-time insights, incident management, seamless integration, resilience evaluation, and feedback for iterative enhancement. From initial customer interaction to the fulfilment of service level agreements and obligations of service providers, it provides comprehensive end-to-end visibility for businesses to track, monitor and optimise every step of the process. Observability — with its ability to provide deep insights into system behaviour and performance — fosters agility, resilience and insights-driven decision-making.
Observability enables organisations to:
- Proactively identify and mitigate risks: By detecting anomalies and patterns in telemetry data, organisations can address potential issues before they escalate into major incidents, minimising the impact on business operations.
- Respond to incidents more quickly and effectively: Observability data provides valuable context and insights into the root cause of incidents, enabling faster diagnosis and resolution.
- Optimise system performance and resource utilisation: By identifying bottlenecks and inefficiencies, organisations can fine-tune their systems to improve performance and reduce costs.
- Make data-driven decisions: Observability data can be used to inform decision-making across the organisation, from IT operations to business strategy.
- Establish the foundation for AIOps: Observability provides rich, real-time data that fuels AIOps, enabling intelligent automation, anomaly detection and predictive insights for proactive IT operations.
Now, there can be obstacles to implementation. They often stem from the inherent complexities of modern IT environments, the limitations of traditional monitoring approaches and the evolving nature of technology itself. However, they are not insurmountable. The cost of inaction can include:
- Increased downtime and service disruptions: Undetected issues can escalate into major incidents, resulting in prolonged downtime and service disruptions, impacting customer experience and revenue.
- Financial losses: Downtime and service disruptions can lead to significant financial losses due to lost productivity, revenue and customer churn.
- Reputational damage: A lack of operational resilience can damage an organisation's reputation, eroding customer trust and loyalty.
- Regulatory non-compliance: In regulated industries, failure to meet operational resilience standards can result in fines and penalties.
By instrumenting customer-facing applications and digital channels, businesses can track user interactions, monitor engagement patterns and identify pain points in real time. This enables businesses to proactively address issues, personalise experiences, and ultimately, enhance customer satisfaction and remain compliant.
Observability can also extend its reach beyond internal systems.
Today, organisations often depend on multiple third-party service providers for critical functions. Observability enables businesses to monitor the performance and reliability of these external dependencies by tracking key metrics and service level obligations (SLOs). This ensures providers meet their contractual commitments and maintain agreed service levels, safeguarding business operations while promoting accountability and transparency. Consequently, this reduces the risks associated with third-party dependencies, improves system reliability, decreases downtime and leads to cost savings. In an environment where CEOs are concerned about inefficiency, observability provides a clear solution for optimising resources and enhancing productivity.
Observability is not about maintaining the status quo; it drives innovation and agility by offering a complete view of system behaviour, allowing organisations to safely try new technologies and methods while effectively monitoring and managing risks.
If you would like to learn more or to discuss undergoing an Observability assessment and implementation of an enterprise observability strategy — tailored to your specific industry and context — contact arya.choudhury@au.pwc.com
