Software Stress Testing: A Significant Component of the Overall Governance

Software Stress Testing: A Significant Component of the Overall Governance
March 10 12:00 2011 Print This Article

There is a good percentage of stress testing companies across leading offshore destinations like India, China etc., where stress testing is carried out. It forms an integral component of the overall governance of an enterprise. It’s used as an effective tool for spotting, calculating and scheming the liquidity risks associated with funding. The application load testing also is an important aspect to be considered in the risk communication with the bank. Not just internal communication, it also pays a crucial role in external communication. A bank also prefers to decode its load test results to help the market entities to have a fair idea about risk profile and management.

The overall accountability of the software stress testing exercise rests with the directors; however, the implementation of the load testing programme is taken care of by the higher management authorities. This allocation of responsibilities optimizes the efficient use of application load testing. A lot of particular choices are made in software load testing along with their major implications. Hence, these should be properly listed down so that the higher management authorities of the stress testing company is fairly acquainted with the limitations of the load tests being performed.

The higher management must be able to locate and lucidly enunciate the risk factor associated with the bank. Also, it must be able to comprehend the effect of load events on the bank’s risk profile. Then the review and detection of potential stress events must be done to chalk out the effective risk mitigation strategy.

The application load testing results can be utilized as tools in decision making as these are fairly valuable in decoding the vulnerabilities, which are seen as costly affair by the bank to afford. The entire exercise of load testing must be actionable and taken into the account for the decision-making process such as strategic business decisions at a managerial level.

A wide range of decisions are supported by the load tests, which must be used for creating the risk profile of the enterprise. Else, these can be used for establishing the exposure limits. Strategic business preferences are evaluated using stress tests when the discussions of long-term business roadmap are done. Also, the results of these tests are made a part of the liquidity planning process.

Software stress testing is an important component of the ICAAP, which is internal capital adequacy assessment process. This prompts the bank to opt for thorough and futuristic load testing that labels probable events or dynamic market conditions, which can have an adverse impact on the bank.

Adam George is a well known writer. He has written many articles on various topics including outsourcing, Presently writing on Software services, Offshore Product Development, Software Stress Testing and other Software testing services.

Source: http://www.vietnamesetestingboard.org

Related Posts:

  • No Related Posts

About Article Author

view more articles
Nataliia Vasylyna

View More Articles