Portfolio theory method of managing operational risk with respect to network service-level agreements

• US 7,343,337 B1
• Filed: 10/27/2000
• Issued: 03/11/2008
• Est. Priority Date: 10/29/1999
• Status: Expired due to Term

• Current Assignee: International Business Machines Corporation
• Original Assignee: International Business Machines Corporation
• Inventors: Liver, Beat, Cieliebak, Kai
• Primary Examiner(s): PATEL, JAGDISH
• Application Number:
  US09/699,262
• Time in Patent Office: 2,692 Days
• Field of Search: 705/36, 705/36.R, 705/7, 705/10
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 10/0631 Resource planning, allocation, distributing or scheduling for enterprises or organisations
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A method for managing operational risk and return with respect to a portfolio of service-level agreements is provided, wherein the method uses a noncompliance risk measure to calculate risk; and wherein, principals of portfolio theory are applied to characterize the portfolio for comparison with other possible portfolios.

Claims

1. A computer-implemented method for utilizing a computer for managing operational risk and return of a production infrastructure with respect to a current portfolio of service-level agreements (SLAs) offered by a service provider, the method comprising:

a. calculating by said computer an efficient frontier that identifies efficient portfolios of SLAs each having a first value of a desired level of risk and return for the service provider using inputs comprising at least one of characteristics of the production infrastructure, traffic characteristics, QoS characteristics, and the price of each class of SLAs;

b. determining a second value of an actual level of risk and return for the service provider under the current portfolio by evaluating performance of the current portfolio of SLAs using a portfolio evaluator means;

c. said computer comparing the second value of the actual level of risk and return for the service provider under the current portfolio and the first value of the desired level of risk and return; and

d. identifying and implementing at least one corrective action to dynamically adjust at least one of the characteristics of the production infrastructure, traffic characteristics, QoS characteristics, and price to change the actual risk and return for the service provider to the desired risk and return, based upon the comparing of the second value of actual risk and return and the first value of desired risk and return.

2. The method of claim 1, wherein the corrective action is selected from a group of actions consisting of:

a. adjusting marketing strategy;

b. changing the degree of multiplexing in the network;

c. changing network capacity;

d. changing the cost of network capacity;

e. defining relative compliance guarantees where networks support definition of adequate policies on the basis of priority;

f. changing prices and comparing with baseline prices of SLAs; and

g. trading contracts of different classes of SLAs.

3. The method of claim 1 wherein, after corrective action is taken, the method further comprises the steps of:

taking new inputs, and,

with the exception of the corrective action of trading SLAs, re-executing the method by calculating a new efficient frontier having a new desired risk and return for comparison with the actual risk and return of the current portfolio, calculated by the portfolio evaluator means.

4. The method of claim 2 wherein, for implementing corrective action comprising trading, the method further comprises:

determining a number of to-be-traded SLAs of a certain class by subtracting the number of SLAs of the certain class in the current portfolio from the number of SLAs in a desired portfolio, and

taking action that tends to narrow the difference;

thus moving the contents of the current portfolio to that of an optimal portfolio.