Monitoring and control

1
Monitoring and control

• Sam H. Parker
• Director
• Management Systems Center
• ATT Laboratories

2
Monitoring and Control at ATT

• What is the Management Systems Center?
• Our focus
• Our history
• Our place in ATTs research community
• The composition of our center
• The future

3
Basics and Infrastructure

• Monitoring is evolving to be an essential
  management process must
• Auditing and strategic monitoring are evolving
  fields
• Critical processes are being monitored
• Transactions in e-brokers
• Transfers to foreign countries
• Package tracking

4
Our Expertise

• CPAS Experience in 1986-1990
• Continuous Audit
• Model for AICPA committees
• FOS (Access Financial Assurance)
• MOSS (Consumer Bill Accuracy)
• GECKO (Consumer LD Transactions)
• LEARN (Consumer Local Provisioning)
• INSYNC (Consumer PIC Revenue)
• Dashboards and Scorecards

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CPAS OVERVIEW
System
System Operational Reports
Workstation
Operational Report
Operational Report
DF-level 2
Operational Report
DF-level 1
DF-level 1
DF-level 1
Filter
Alarm
DF-level 0
Data Flow Diagrams
Database
Reports
Analytics
Metrics
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FlowFront - Interactive Flow Diagram Viewer -
ATT Bell Laboratories - Murray Hill, NJ
fer
04/01/89
Date
Set Date
Recalculating With Check.
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FlowFront Hierarchy
Billing System - Customer Billing Module
Customer Database
Extract Customer Accounts
Calculate Amount Due
Update Billing Info
1000
1000
Journal Files
Format Bill
998
988
Accounts Missing 10
2
Journal Files
Table
Process Errors
0
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Sales lead Process Monitoring for SMART
Dallas Sales Center --chart type A --chart type
B --chart type C
RSM 1 --chart type A --chart type B --chart type
C
Agent production -- Active user xx --chart type
A
Incoming toll free lead -- chart type A
Number type 1
Number type 1
Number type 1
RSM 2 --chart type A --chart type B --chart type
C
Agent production -- Active user xx --chart type
A
Incoming toll free lead -- chart type A
Number type 1
Number type 1
Number type 1
Convergys --chart type A --chart type B --chart
type C
Number type 1
Incoming Web site leads -- chart type A
Number type 1
. . .
. . .
Number type 1
Tucker Sales Center --chart type A --chart type
B --chart type C
RSM n --chart type A --chart type B --chart type
C
Agent production -- Active user xx --chart type
A
Incoming toll free lead -- chart type A
Number type 1
Number type 1
Number type 1
Marketing Operation
Sales Center Operation
Alliance Agent Operation

• -Number type 1 is the cumulative number of leads
  for current day
• Chart type A bar chart showing the hourly
  incoming leads for current day
• Chart type B line graph showing the total
  cumulative leads (x-axis is hours)
• Chart type C bar chart showing lead status
  distribution

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Monitoring and Control Structures
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Internet
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A la MIMS
A la CPAS
A la GECKO
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Monitoring

• Is one of the key processes of management
• Is changing substantially with online technology
• Audit is an instantiation of the monitoring
  process
• We have many tracking and monitoring projects
  assurance is a specific type

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What is Needed?

• A flexible platform for observing business
  activities and providing automated alerting of
  adverse conditions

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Business Model (1)

• Auditor partners with Monitoring and Control
  provider and service is part of audit fee-
  Auditor pays MC provider
• Variation 1
• MC provider is commissioned to provision
  un-responded alarms to a third party

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Business Model (cont.)

• 2. MC provider is directly linked to auditee.
  Audit Committee pays MC provider
• -Variation 1
• A data stream is directed to regulatory
  authority
• - Variation 2
• A data exception stream is directed to peer
  review partner
• -Variation 3
• Data exception streams are directed to bank and
  insurers for direct payment (Must clear SEC
  rules)
• 3. MC provider also provides
• Monitoring for the regulatory process
• Monitoring and control of the audit process

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MC layer
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Pseudo report secondary assurance

• We have been engaged on a continuous assurance
  engagement for the fiscal year of xxxx for the
  purpose of covenant monitoring. We will monitor
  the organizations covenants, using the ATT MC
  platform, as described in our agreement with bank
  XYZ using a specified set of covenant figures and
  wide set of analytics as described in
  http//www.ca.com/analytics and other analytics
  we deem appropriate and will report on an audit
  by exception basis when more covenants are
  violated by more than xx for a day or when we
  deem it appropriate. This exception report will
  be issued to bank XYZ immediately when the
  variance day is completed and to all customers
  registered ( paying ) at http//www.ca.com/analyti
  cs/customers.
• ATT is engaged to report any non-resolved
  discrepancy that persists for yyy hours /days to
  the peer review entity / SEC / Audit committee .
  Etc.

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Markets

• The worldwide assurance market is about 40
  billion with many peripheral services
• Current audit services do not satisfy these needs
• There will be some replacement and some market
  expansion
• In the systems area other players like EDS and
  IBM are emerging

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Conclusions

• The monitoring area is an emerging opportunity
• Many opportunities exist across business areas
  such as marketing, production and finance
• Assurance is a specific instantiation of system
  monitoring
• New systems architectures, concepts, and
  approaches are needed
• Extensive research is needed