Dear CEO - Mitigating IT Outsourcing Risk

Transcription

1 Dear CEO - Mitigating IT Outsourcing Risk Choosing an Institutional Quality IT Vendor Alexander Brown Technology Partner, Simmons & Simmons Ray Bricknell Managing Director, Behind Every Cloud

2 Dear CEO - Choosing an Institutional Quality IT Vendor Context : IT Outsourcing within Dear CEO concerns Is it in Scope? Impact of growing trend toward Cloud Operational IT Risk Mitigation Local and Endemic What does a rigorous IT Vendor Selection Process look like? IT Vendor Selection Criteria Areas for Improvement: Endemic Market Risk Mitigation Cloud Vendor input? Cloud Vendor selection: A better way? Panel Discussion (Please hold questions until this session) What constitutes an Institutional Quality IT Vendor?

3 Is IT Outsourcing In Scope for FCA Dear CEO Concerns? Concern driver: endemic risk through financial interdependence But reading with IT Outsourcing and especially Cloud in mind Surely Outsourced IT is a critical activity in the support of regulated activities?

4 Is IT Outsourcing In Scope for FCA Dear CEO Concerns? IT Outsourcing Operational Risk: Local versus Endemic Local e.g. Infrastructure Platform Event i.e. Single Vendor, Single Fund Endemic e.g. Major Vendor Liquidation or BCP Event i.e. Single Event affects Multiple Funds - and even Wider Markets With CLOUD (vs. On Premise or Co-Lo/Mgd Service on own kit) these two risk exposures begin to grow and merge UK Asset Management IT Outsourcing Market: Small number of providers; Shared risks (e.g. E14 Flood) Hundreds of funds: Shared Vendor exposure; Shared BCP exposure So BEC View: If it isn t already in scope it should be!! Partially mitigated by thorough and ongoing Due Diligence

5 The Good (hopefully) 6 4 Internet The typical IT Vendor Selection process: Identify Vendors Word of Mouth Expos & Conferences Events Webex s Free trials Experience High-Level Assessmen t Provider Meetings CTO Discussions Technology Reviews Demo s Follow-up Meetings 1000.ppt slides Business Case Formal RFI/ RFP Business Requirements RFI Development RFI s Out / In / Review Data Capture RFP Creation Solutioning Workshops Reference Site Visits RFP Out / In / Review Solution Presentations Contract Negotiations Final Vendor Selection Highly prone to Garbage In- Garbage Out 2 0 The Bad The Downright Ugly! Far too little Open Market Feedback

6 The Two Stage Formal RFI & RFP Process: RFI/RFP Scope Agreed - Approval to Proceed Identify Wide Range of Potential Vendors Desk Based Analysis of Vendors / Offerings Select Long List Target Vendors Execute Non Disclosure Agreements Issue RFI Multi-Vendor Briefing Presentation and Open Q&A Develop RFI Content 1 1 Review Indicative Cost Models Develop RFP Response Template Develop Capture and Collection System Closed 1:1 Vendor Q&A Sessions Expect Approx. 2 No-Bids Review Formal RFI Responses Select Short List Target 4 to 6 Vendors Release RFP to Short List Vendor Q & A Cycle Review RFP Submissions Review Product Collateral Develop RFP Content Agree Selection Criteria and Weightings 2 Review Public Domain Collateral

7 RFI & RFP Process (cont.) Develop Like-For- Like Cost Models Legal Terms and Conditions HL Review Financial Due Diligence Client Side Q&A Cycle Select Internal Short List for Presentations and Due Diligence Vendor Presentatio ns (4-6) Review, Analyse, Score and Report Reduce Internal Short List to 2-3 Vendors Site Visits * 3 per Vendor (DC s and NOC) 3 Conduct Security Audit 3 Review, Analyse, Score and Report Now 2 Preferred Vendors High Level Design Finalisation Commercial Negotiations Contractual Negotiations Announce Final Successful Vendor Decision Conduct Technical Due Diligence Average Timeframe and Internal/Consultancy Cost: 4 6 Months 100k 150k

8 IT and Cloud Outsourcing Vendor Selection Criteria e.g.: Pre- Requisites Assessment of Key Risks and Issues Internal Requirements Definition Internal Cost Model ( Like for Like ) Strategy Incl. Technical; Incl. Tactical Incl. Timing and Resourcing Business Case Approval Selection Criteria (for panel discussion later) Regulation and Compliance Clients Profile Breakdown incl. By Size By Revenue Client References - ALL Financial Viability Revenue and Profitability Profile Business Model Ownership Independent Accreditations Contractuals i.e. T&C's Flexibility and Scalability Topology (Local / Global) Sector Alignment Risk Profile Technical Teams (Support/Migration/Management) Platform Components Onion Layers Vendor Relationships Active-Active => Always On Application Layer Support

9 Dear CEO - Choosing an Institutional Quality IT Vendor Areas for Future Focus and Improvement Endemic Market Risk Mitigation Cloud Vendor input to potential solutions? Whole of Market Cloud Vendor Dependency Data Cloud Vendor selection: A better way? The Clover tm Cloud Vendor Rating Engine

10 Constant Immersion in the Cloud Ecosystem Buying Cycle 50+ Suppliers Analysed (and counting ) Data Ratified Bi-Annually Existing Asset Management Customer Feedback IT Strategy & Business Case The CLOVER Cloud Vendor Rating Engine Detailed Client Output Vendor Feedback - 3 * Recommended: - The Good - The Good - The Good Requirements Gathering & Service Catalogue Client Specific Inputs External Financial s & Media Multiple RFI s & RFP s Regular Vendor Self- Updates via Portal + Qualified Leads Customer Confidential

11 Dear CEO - Choosing an Institutional Quality IT Vendor Interactive Panel Discussion: What constitutes an Institutional Quality IT Vendor? Your Panellists: Ian Bowell CTO Prologue Capital Alex Brown, Technology Partner - Simmons and Simmons Mark Fowle CEO and co-founder Attenda Jon Gasparini Financial Services CTO Fujitsu Alex Parker CTO Commensus Roy Wood Sales and Marketing Director Advanced 365 Chair: Ray Bricknell MD Behind Every Cloud

12 Dear CEO - Choosing an Institutional Quality IT Vendor Thank you for your time, please join us for coffee outside. Contacts for any follow up questions: Alex Brown, Technology Partner - Simmons and Simmons [email protected] Ray Bricknell MD Behind Every Cloud [email protected]