Outsourcing and Automation are Not Mutually Exclusive
Outsourcing an institution’s core processing and other key workload processes can generate numerous benefits, including increased efficiency, lower costs, improved business continuity planning and better deployment of existing staff and skillsets to focus on long-term, strategic development initiatives.
However, as their operational infrastructure grows more complex, many financial institutions are finding it increasingly difficult to integrate across multiple function-specific software platforms, including those housed on-prem and outsourced to third party providers. This can result in reduced access to siloed data, less control of recurring daily processes, and limited visibility into integrated systems and solutions.
If processes are not properly documented, outsourcing may also lead to the loss of years of accumulated institutional knowledge. Financial institutions must be careful not to outsource strategy and decision-making along with their repeatable processes, or else risk losing competitive advantage, agility, and the ability to scale effectively.
Outsourcing can also increase operational, regulatory, and reputational risks if proper vetting of a potential partner during the vendor assessment and analysis stage is not performed. It is important to establish robust service level agreements (SLAs) and ensure the provider has effective downtime and business interruption procedures in place. According to Deloitte, “without identifying critical risks and properly monitoring, the likelihood of such risks becoming material greatly increase.”iv
This is why more organizations are choosing to implement workload automation to maintain visibility and control, even while outsourcing more of their operations. According to a 2018 industry survey, “around 64% of the respondents identified IT workload operations as the most automated function in the industry.”v
Leading workload automation solutions can connect multiple, diverse environments, whether in the cloud or on-prem, serving as both a system-wide orchestration platform and a porthole into the entire interconnected ecosystem.