How to implement data-driven incident management in business operations (5-step approach)

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Introduction

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Operational incidents are commonplace in any businesses. But how you deal with them can make all the difference between success and failure in the long term. Most companies take a best-effort approach to incident management, which is simply not sustainable in the long term. The solution is data-driven incident management - and this blog post will show you how to get there in 5 steps.

Most companies resolve operational incidents on a best-effort basis

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Operational incidents happen at all companies - even in the best performing ones. Delays or missing items in deliveries, forgotten customer requests or unsettled invoices are just some of the issues that can crop up on a daily basis.

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Teams with the right ownership mindset resolve operational issues as best as they can. They communicate with each other in-person or via Slack to find quick solutions and close the issue, but hardly take the time to take learnings and systemise the incident response process.

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While ownership may be sufficient to manage operations at a smaller scale, this approach becomes unsustainable beyond a certain size or level of growth as the increasing complexity of the business usually multiplies the number of incidents at an exponential rate.

Why ad-hoc incident resolution is not sustainable in the long term

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If incidents are quickly resolved, they're often unseen to management. While they may not affect the main business KPIs significantly if dealt with rapidly, they take away precious time from the operational team members that could be spent on structural, forward-looking improvements and ultimately on more efficient operations.

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When incidents are resolved via informal mechanisms, there are no logs or data to analyse them without which it's difficult to implement structural changes in operations. It becomes difficult to decide which areas to improve with better processes, more automations or simply hiring more staff.

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Not to mention that this approach will also lead to burnout among team members. They are constantly reacting to incidents and never have time to step back and assess the situation. As the company grows, this can lead to mistakes being made and important details being overlooked.

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As such, while ownership is a necessary minimum to operate a successful business, it's not sufficient to achieve long-lasting competitive advantage as the company expands.

The solution is data-driven incident management

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Data-driven incident management helps companies improve their team's efficiency and effectiveness in resolving operational issues, and ultimately in managing day-to-day operations. Not surprisingly this approach puts data into the center and suggests that companies shall monitor their operations to identify incidents real-time, take logs of their end-to-end incident resolution process and recognise patterns and trends that help them avoid future incidents before they happen.

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Teams mastering data-driven incident management have a complete overview of all operational incidents happening in their business. They know not only what happened in the first place, but also who solved them, through which steps, how quickly and with which outcome. Having such an understanding can provide companies valuable insights, such as how much capacity day-to-day incident management takes from their teams or what are some issues that are most relevant for automation.

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With data-driven incident management teams are capable of identifying team members that found ways to resolve incidents with much better outcomes. Knowing that they can create playbooks and replicate these solutions as standards.

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Furthermore, teams having data about their incidents can pinpoint problematic customers or partners that generate significantly more frequent issues. Being aware of this they can work together with them to eliminate them and uplift both of their businesses' results.

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All of these benefits - and more - are available when you implement data-driven incident management in your organisation.

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How to implement data-driven incident management in 5 steps

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1. Direct incidents into a dedicated incident management system

While it may sound primitive, but first and foremost incidents shall be identified by someone or some systems, and then logged in a dedicated tool as a data input.

The ideal way is to generate incidents automatically by implementing data-driven triggers. This can be done by monitors that systematically and real-time scan operational data and generate incidents based on pre-set conditions.

If this is not possible due to lack of suitable data setup, alternatively teams can also start with manually creating tickets in the incident management system and automate observation and ticket generation later on as it becomes feasible.

2. Notify the responsible persons in the right time and right channel

As soon as the incidents enter the system, the next step is to ensure that they are routed to the right team members. Therefore it's important that companies pre-define various incident types and attach to them dedicated owners and urgencies.

In a best practice setup, these owners (and all other relevant stakeholders) are notified at the right time and channels in an automated manner. Based on the importance of incidents these channels may vary. Usually less urgent incidents are shared via email or Slack, while urgent ones are escalated to SMS messages or phone calls.

Teams that master incident management even have data-driven escalation rules pre-defined for operational issues and on-call rotation systems to ensure that no incident is left unresolved for too long.

3. Capture all logs of the resolution process

In order to find improvement levers, it is crucial that companies capture the logs of their incident response steps. By collecting this data, they can identify prioritised areas and make the necessary changes to streamline their processes.

Teams can do that by collaborating on incidents within their dedicated incident management system that creates full transparency and traceability. The best incident management tools also provide playbooks so that incident owners receive suggestions how to best resolve the underlying issues.

With dedicated system integrations companies can also log actions that are happening outside of the incident management system by syncing email or Slack activities or other relevant backend system operations.

4. Regularly analyse incident data to capture learnings

Teams that follow the steps above in case of operational incidents have already generated significant value in their business by shortening the time to reaction, decreasing the effort for resolution and maximising the outcome.

However, even more benefits can be gained if incident logs are regularly analysed to find patterns or trends that help them avoid future incidents, automate the resolution processes or at least ensure that all colleagues follow the best practice playbooks.

In this step companies look at metrics such as number of incidents across various periods, at specific locations or related to certain customers or partners to pinpoint problematic spots. The resolution time per team or agent can also generate new insights to improve reaction and resolution speed. Last but not least, comparing the outcomes, such as customer satisfaction scores (CSAT, NPS) or reorder rates can help teams find best practice resolution approaches that shall be replicated through the organisation.

5. Improve operations to avoid or automate future incidents

The outcome of these analyses or team retrospectives in the previous step shall be actions that can improve the future incident resolution process.

Teams will find that many of the incidents can be avoided by better planning, more attention to detail by team members or improvements in processes. If certain issues happen frequently and can result in high business impact, then they should be good candidates for automation to avoid even the slightest chance of manual errors.

Needless to say, in most companies it's impossible to avoid all incidents or automate all processes, therefore companies should also take the time to create playbooks for the most common incident types, set up an automated monitoring system to detect these issues as early as possible and ensure a standardised, transparent and best practice resolution process within a dedicated incident management tool.

Build or buy - the right decision for the incident management tooling

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Building such a system can take a lot of time and money, therefore most companies don't do that - as they don't develop their own customer service ticket management or CRM tools.

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However, it's difficult to find the right incident management system - one that is easy to use, integrates well with the other systems and applications used in the company and that can become a central platform for all business incidents happening across the entire organisation.

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While there exist great incident management tools in IT operations already, this is not the case for business operations. That's why we're building Flawless, a central place to monitor and manage all business operations incidents. In Flawless teams can set up data-driven notification and automations easily and without coding, building on their existing database or data warehouse. Furthermore, Flawless can be implemented in minutes, as it doesn't require an API-based heavy integration work from the development teams.

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If you are interested in learning more about Flawless as a monitoring & incident response tool for business operations teams, feel free to reach out to me here on Linkedin, or request a demo on our website.

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