Posted on April 18, 2023
Estimated reading time 2 minutes
It is clear that to achieve operational effectiveness, vendor consolidation and consistent costs for budgeting are a high priority, but to achieve operational effectiveness also requires expertise and a holistic approach to cloud and overall IT architecture.
With just 13% of financial institutions surveyed my McKinsey having more than half their IT footprint in the cloud, there is still work to be done in the finance sector.
This piecemeal approach to cloud adoption could stand in the way of the real benefits, according to Azure. Productivity can be increased by 206% by moving away from a hybrid/on prem/multi cloud model, according to their latest figures. By reducing the number of software licences and by understanding what functionality current licences can provide, a process of reviewing digitised workflows can begin. Cost optimisation as part of a cloud review and adoption programme is vital.
Gartner’s 2020 IT Symposium survey noted that without cost optimisation as part of a cloud lift-and-shift programme, around 45% of organisations would overspend on their project.
For funds, expertise is rarely an in-house requirement for all IT specialisms. Most firms in the alternative investment sector will have an outsourced partner to support their technology needs. The question is more about which outsourced firm to partner with. The FCA are clear in their guidance on cloud provision “We view the provision of cloud services for the delivery of important business functions as a form of potentially material outsourcing. Firms can use cloud services, if they comply with our rules.” The FCA’s guidance goes on “Compliance [with Principle 11] includes a firm disclosing to us anything relating to the firm which may have a serious regulatory impact. This includes notification and reporting requirements on critical, important or material outsourcing.”
The FCA leaves no question that firms must ensure their cloud partner is capable, knowledgeable of regulated markets, transparent, adhere to KPI’s and comply with risk assessments. More and more, the regulator and firms themselves are also looking to partner with firms who will have a positive impact on their ESG goals; outsourced partners who can evidence they work with the same principles, culture and approach to doing good business should be a consideration.
Azure’s recent figure state those organisations who had partnered with them on their cloud programme have increased their revenue on average by 61% from empowering faster decision making and growth using their data transformation modelling. This is achieved by strategically building a cloud solution with a strong approach to partnership and a holistic view of business goals and needs.