Outsource Magazine Issue 26 - (Page 40)

GETTING SMART The challenges facing the financial services industry are vast – but intelligent outsourcing can not only save costs but deliver a solid competitive advantage both on and off the beaten track... Adrian Guttridge Adrian Guttridge is VP for Financial Services, UK & Ireland for HP Enterprise Services. n today’s challenging economic climate, the financial services sector is grappling with change on every front. Institutions are having to justify spend like never before whilst dealing with more demanding clients and investors, hungry new competitors and facing increased scrutiny by regulators and the press. Customer retention has come to the fore again as revenues have been dropping. NatWest’s ‘Customer Charter’ is one example of how important customer loyalty has become. Previously, the term “outsourcing” has been synonymous primarily with cost savings. Moreover, in this tempestuous economic climate it is easy to see these savings as the be-all and endall. At Hewlett Packard (HP), however, we strongly believe that intelligent outsourcing has the power to do more for a business, helping address issues in customer retention, regulatory reporting and more. Outsourcing can also free up much-needed capital for a business to innovate and in doing so get ahead of the competitive curve. I Beating the 70/30 spending trap Recent HP research, conducted by Coleman Parkes, showed CIOs across Europe and the US are seeing up to 70 per cent of their budget swallowed up by the cost of maintaining legacy applications. It is widely acknowledged this spend ratio needs to be urgently reversed and by changing the very way a business consumes IT through outsourcing, this can be achieved. Rather than an organisation owning its own set of physical components that sit on a firm’s balance sheet and depreciate, an organisation can consume IT as a service, either through the cloud or through sale and leaseback agreements whereby a vendor buys the infrastructure and leases it back to the customer, essentially removing assets from its balance sheet. Exchanging fixed costs for variable ones is particularly advantageous for financial services institutions which are seeking to reduce the size of their balance sheets. Further, many vendors will also refresh the obsolete infrastructure as part of the service, costly if managed through the business itself. “All business proceeds on beliefs, or judgments of probabilities, and not on certainties.” – William Reddington Hewlett 40 www.outsourcemagazine.co.uk ● ● http://www.outsourcemagazine.co.uk

Table of Contents for the Digital Edition of Outsource Magazine Issue 26

News & Comment
2012 in outsourcing
Fine – but what does it all mean?
Steering Steria
Separate Ways?
Getting Smart
Northern Lights
Heads in the Cloud
Connecting Service
Bigger and Better
NOA Round-Up
Breaking Through
You Cannot be Serious!
Back to the Future
Accounts Payable
The Power of Two
Public-Private Partnerships
Kill or Cure
Public Problems
Top Ten
The Legal View
HfS Research
Online Round-Up
Inside Source
The Last Word

Outsource Magazine Issue 26