Posts tagged practical

QuantOps

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Recently, I was interviewed for the ActiveState blog on DevOps & Platform as a Service (PaaS); that interview made it to Wired.com (here). A discussion on the topic was timely, as I’ve been thinking about DevOps and other agile delivery chain mechanisms quite a bit lately, mainly as I am applying them in my current gig which my colleagues are I describe as “Business Ops”. Next month at Nordic Security 2013 I’ll be presenting “Operating * By the Numbers” (If you’re wondering why there’s no abstract, it’s because I’m still perfecting “Just In Time” deck development…just kidding. Sort of.*)

Anyway, I thought it might be a good idea to explain What I’m Talking About When I Talk About DevOps (apologies to the incomparable Haruki Murakami). This will be my first time trying to explain where I’m going with this whole DevOps thing, so it might get fuzzy. Bear with me. I reserve the right to change my mind later, of course (I’m cognitively agile that way, haha), so if you have comments or criticisms I’m very open to hearing your thoughts.

Connection between DevOps & Risk

DevOps, if you’ve not heard of it before, is a concept/approach to managing large-scale software deployments. It seems to be most popular/effective at software-based or online services, and it is “big” at highly scaled out companies like Google, Etsy, and Netflix. Whether consumer-facing or B2B, these services need to be fast and highly-reliable/available. The DevOps movement is one where deployments and maintenance are simplified (simplicity is easier to maintain than complexity) through standardization and automation, lots of instrumentation & monitoring, and an integration of process across teams (most specifically, Dev, QA & Ops). More on “QA” later.

But…the thing about DevOps is, that while it is a new concept in the world of online services, it draws heavily from Operations Management, which is not new. The field of Operations Research was forged in manufacturing but the core concepts are easily applied across other product development cycles. In fact this extension is largely overdue, since a scan through semi-recent texts on operations management shows IT largely described as an enabling function (e.g. ERP) but not a product class in and of itself. (BTW, in some curriculums, Operations Management is cross-listed or referred to as Decision Science, which is a core component of risk/security analytics.)

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Impressionist Risk Management, or, the Whole Insurance Policy Fallacy

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Risk management at a systemic level is complicated enough that many organizations deem it practically impossible. The mistake many risk managers make is to try to identify every potential exposure in the system, every possible scenario that could lead to loss. This is how risk managers go crazy, since not even Kafka can describe every potential possibility. Risk management as a discipline does line up nicely with probability theory, but holistic approaches to risk management deviate from the sister science of insurance.

Venice. Yeah. Try and get flood insurance *there*.

Insurance presents expected value of specific events taking place: what is the probability this car and this driver will be involved in a collision — and how much will the resulting damage cost to replace/fix? Factors include the age and quality of the car as well as the age and quality of the driver, average distance driven per day, geographic area and traffic conditions. The value of the vehicle is estimated, ranges of collision costs assumed. Flood insurance is similarly specific: what is the probability this property will sustain damage in flood conditions — and how much will it cost to protect/fix the property? Average precipitation, elevation, foundation quality, assessed property value are all factored into the decision.

As complicated as actuarial science is, insurance can be written because insurance is specific. Risk management is not specific: it is systemic.

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