Outsourcing of financial services IT is certainly not a new phenomenon; MSPs have been around practically since the birth of computers. So why do we see this issue being increasingly discussed lately?
Bart McDonough: For financial services firms generally, and for our alternative investment clients in particular, there is one overriding consideration: the increasingly changing role of today’s CTO. Look at any of the top alternative investment CTOs and what you see is a leader who is playing an active role in the success of their firm. They choose to focus their team’s efforts on achieving important growth goals and not worrying about backups, patches and other day-to-day tasks, particularly when there are outside service providers that are infinitely capable of doing those tasks. Beyond the need for more time to help grow their firm, there are three additional reasons that are at the heart of every outsourcing discussion: compliance, flexibility and cost. The financial regulatory environment has changed, and will continue to change in the months and years ahead. Compliance, of course, is not a choice; one must simply comply and change whatever operations are necessary to meet the regulations. Often, legacy systems lack flexibility and require major costly, and time-consuming, overhauls to adjust to these new realities; this provides the perfect opportunity to look at alternative solutions. The build/buy/rent question is always with us, and in periods of accelerated change, that question becomes more difficult to answer. However, if the objective is to preserve capital, gain flexibility and control costs, the solution is clearly outsourcing.