Research by the software and technology company Sungard has found that business process outsourcing, accelerated migration to the cloud and third party managed services are key global trends for the financial services industry over the next 12-18 months.
Sprawling infrastructures and siloes can slow innovation and growth, whilst the internal resources needed to manage complex IT systems in-house can make the total cost of ownership (TCO) unviable – especially at a time when many financial services are ploughing time and manpower into meeting new regulatory requirements. For many companies, handing over the management of IT services to third parties has become a far more attractive option.
Externalising services has its issues, though, and firms will need to tighten up their vendor management, focusing on strong relationships with trusted partners that have deep expertise in the field. For companies that who are concerned about efficiency and operational risk, a good option might be to combine software deployment with business process outsourcing (BPO) or an outsourced business process as a service (BPaaS) platform, the study suggests.
“Third party specialists need to offer the security, scalability, global expertise and local presence to help firms reduce complexity, enhance efficiency and focus on business objectives to drive profitability internationally and regionally,” said Steven Silberstein, Chief Technology Officer at SunGard.
“By 2016, approximately 50% of financial institutions will use managed services to outsource the management of their IT infrastructures,” added Larry Tabb, Founder and CEO of the TABB Group. “Due to the benefits of managed services – increased agility, flexibility and responsiveness, faster time-to-market for new products and tighter security – this model will become more mainstream in helping firms address the evolving challenges in our industry.”