The influence technology has within financial services companies means there is a careful balance between what you keep in-house and what is outsourced to third parties. From application providers to infrastructure, outsourcing IT is a more complex question than one with a binary answer.
Looking specifically at IT infrastructure provision, if you are considering a move from in-house to outsourcing, careful steps must be taken to ensure you plan the change correctly and understand how a relationship with an outsourcing company such as a managed service provider could work compared to running in-house.
Some important factors to consider are:
1) Regulation: How do you manage compliance and regulation? Will these be retained roles and how would they interact with a third-party infrastructure provider?
Financial services companies operate in a highly regulated industry, and they must comply with various regulations and requirements. You need to ensure the outsourcer has experience and expertise in providing IT infrastructure services to financial services companies and complies with all relevant regulations including those set out by the Financial Conduct Authority (FCA). Also, consider what elements are needed internally to manage part of your business and how these will interact with the outsourced third party. Be clear about where responsibilities lie when scoping out what your service needs to look like and throughout the selection process.
2) Security: How do you currently manage your IT security and how will this change when you outsource services to a third party?
Is this also a good time to take a fresh look at your overall security requirements? Financial services companies deal with sensitive and confidential data, such as customer financial information and confidential investment data, and need to guarantee their data is secure. Make sure that the outsourcer has a robust security service in place and can manage your systems and ensure all services provided cater to all end-user needs including mobility and hybrid working. It is important that you are clear and detailed on all your requirements before selecting a provider rather than making assumptions.
3) Business Continuity: Who runs your disaster recovery and business continuity planning and is it tested?
Financial services companies need a robust disaster recovery and business continuity plan in place, that is regularly tested, to ensure their critical IT systems are quickly up and running in the case of a disaster or outage. The outsourcer needs to showcase a comprehensive disaster recovery and business continuity plan. This is also a good time to consider what infrastructure type is most suitable for your specific organisation. You need to understand your systems to know what you are asking for from the third party. Disaster recovery and business continuity can have many different flavours between public cloud services and dedicated hardware or smaller hosted services. In addition, with the move to modern working in recent years, has your business adapted to this new approach and is now a good time to understand your overall workplace plan as part of a move to a managed service provider?
4) Growth: How will you scale your business during the course of the contract with a third party?
Financial services companies need to platform their IT infrastructure so that it can scale to meet their needs (both up and down). The outsourcer that you choose to partner with needs to be able to accommodate your business’s growth and future IT infrastructure needs. This is also a great opportunity to look at the key differences between public and private cloud offerings and confirm you understand how charges will change and affect budgeting as you scale.
5) Performance: Guarantee the performance and availability of the IT infrastructure.
Do you have a clear view of how your service levels are managed and how your users are currently supported? It may be that this is done on an informal basis using in-house resources. Moving to an outsourced provider, you need to be prepared to formalise how this works and what level of support is needed and where. The outsourcer needs to provide clear and measurable Service Level Agreements (SLAs) that guarantee the performance and availability of the IT infrastructure. Ensure you understand how outsourced and managed services work for your business.
Other factors to consider
Other factors to focus on can include doing a cost analysis of in-house vs outsourcing, ensuring the outsourcer truly understands your business and has a credible track record of servicing similar companies within the financial services sector.
It is worth considering whether you need expert help in selecting a third-party supplier. There are companies that specialise in managing procurement processes to select technology providers. They can help you document your current state, draw up your requirements in detail and support you in selecting a new provider by creating clear scoring criteria and assessing bids from an experienced standpoint.
Time to focus on your business
By considering these factors, financial services companies can find a reliable and effective outsourcer to manage their IT infrastructure needs. Outsourcing IT infrastructure can offer significant benefits, such as improved security, scalability, and compliance, and allow financial services companies to focus on their core competencies.