Commentary on Transactions Systems - Our 21st Century Dependence

Transactions Systems – Our 21st Century Dependence
The past two weeks have been significant in how our lives have been affected by online realtime transaction systems. Traditionally we’ve thought of these as the phone switches, airlines, the stock exchanges, and card-based payments systems. With the advances in technology over the last two decades, transaction systems now touch many aspects of our lives: how we file our taxes, how we communicate with each other, and how we use realtime payments systems every day that were once thought of as batch processes.

In the past two weeks, we’ve observed an unusual number of extended issues and outages on critical systems which have created hiccups in lots of ways.

• In the UK, the BACS system (the equivalent of ACH in the US) slowed down so significantly at the end of the month that paychecks missed their deposit windows, almost 40,000 of them according to Banking Technology.
• A week later, the system which handles authorizations for Visa cards in Europe slowed down and was perceived as down in many European countries for about twelve hours.
• In North America, Intuit’s automated e-file capabilities slowed and were rejecting tax filings on the day of the IRS deadline for 2006 taxes.
• That same day, and extending for two days, RIMM experienced issues with their North American operations which made Blackberries either slow or useless.

The number and durations of these impacts were significant. What happened to robust capacity planning and backup system planning as implemented in the airlines, credit card processors, phone switches, and stock exchanges in the 70s, 80s, and 90s?

With our lives now based on instant communications and online realtime management of our money, we’ve come to be very dependent upon these systems. Extended slowdowns and outages are not something most of us can deal with in our increasingly electronified lives. We’ve come to expect and rely on instant access and responsiveness from these online systems. Extended outages leave us hanging - disappointed in the promise of these technologies when we know that, with today’s advanced capabilities, it doesn’t have to be this way.

Each of these systems issues from the last two weeks has affected business as well as personal finance. Many of the individual and anecdotal experiences indicate that such issues may reshape user optimism and have longer lasting impacts to providers than the outages themselves. Businesses who based at least part of their value proposition on fault tolerance in the past should be studied by those new comers who offer compelling services, but have found that always-on service requires finesse, precision and constant attention.