Managed services, sometimes referred to as outsourced services, are often dismissed by decision makers with technology remits in financial institutions. As we explored in our recent blog, the misconception that these services result in a loss of control when compared to a proprietary, in-house model is one of the primary reasons for this inhibitive mindset. But a range of other misconceptions also prevail.

In the highly specialised world of capital markets technology, where intricate and highly customisable platforms like Sophis and Fusion Invest are deployed, such misconceptions can be especially acute and restrictive.

For example, business leaders may assume that a managed service approach is more costly. Or that it necessitates the adoption of a standardised, shared platform. Or that both the platforms themselves and the requirements of the business are too complex to be handled by an external party.

To an extent, low-value, low-quality service provision from low-cost outsourcing companies has helped perpetuate these myths. Regardless, the reality is that the right partner, offering a specialised and premium managed service, can actually reduce your costs, optimise your solution and better meet your unique needs.

In this article, we’ll examine why it could be time to think again about managed services for trading solutions. Read on to find out more.

MISCONCEPTION: A managed service will cost more.

TRUTH: The managed service model is inherently cost effective.

Flexibility. Scalability. Agility

Intuitively, institutions may doubt the cost-efficiency of managed services, believing that internal teams cost less and can match the value offered by a consultancy. However, not all managed services are created equal. A partner who has deep understanding of the industry, the trading application and cloud technology, and who brings optimal service delivery frameworks, can help you reduce costs, while also driving improved performance.

One of the main reasons a managed service model represents superior value for money is that it facilitates scalability and flexibility. In terms of personnel and expertise, an outside provider can offer mutualised services, giving you access to a whole team of highly specialised professionals whenever you need them. This negates the considerable costs of finding, hiring, training, managing and retaining internal people – a major drawback of the in-house approach.

Utilisation challenges – making sure your team members have optimal workloads – are another disadvantage of in-house models. In times of high demand, internal teams must prioritise tasks, tackling urgent requests as they arise. Invariably, this leads to a reactionary culture where ‘firefighting’ takes precedence over strategic activity that could add long-term value for your business. Conversely, when things are quiet, the in-house model puts you at risk of incurring costs while teams are not fully utilised.

With a managed service, the whole package is inherently flexible. Mutualised services from a provider with economies of scale mean that you pay only for what you use, and it becomes the provider’s responsibility to manage fluctuations in demand. Subscription-based commercial models and a-la-carte services mean you are not ‘locked in’ to fixed solutions – your costs can flex as your requirements change. It’s a far more agile way of working.

If your chosen partner offers cloud hosting as well as application services, this agility extends to providing on-demand environments with consumption-based, pay-as-you-go pricing, eliminating the need for huge upfront investments in infrastructure.

Reduced governance overheads

Engaging with a managed service provider introduces cost-efficiencies by lowering management overhead and governance costs. The training and supervising of internal teams requires time and investment. If you rely on external contractors, often with higher turnover, additional oversight is required. There’s a cost that comes with the co-ordination of internal departments with disparate objectives and perspectives, and also with managing competing priorities such as production support and change.

All of this is compounded when you rely on teams across multiple geographies.

With an outcome-based managed service, the valuable time of your senior leaders can be re-focussed towards strategic activities.

MISCONCEPTION: I can get a better result with an internal team

TRUTH: Specialist managed services empower you to get maximum value from your technology.

Unlocking the benefits of the cloud

As we’ve already touched upon, moving Sophis or Fusion Invest to the cloud can yield significant savings for your business because it opens the door to scalable infrastructure and pay-as-you-go pricing models. Beyond this, highly-available, high-performing, secure and resilient cloud architectures improve outcomes. And standardisation and automation decrease operating costs and reduce risk.

However, achieving effective cloud transformation of your trading solution without the support of an expert managed service provider is extremely difficult. Successful cloud migration and ongoing platform management require deep expertise of both the cloud platform and the application.

Building up an internal cloud capability is not a trivial undertaking. Even if your organisation has the budget and the headcount allowance to build up a team of cloud architects, engineers, network specialists and database administrators, all available 24×7, these individuals won’t have experience of designing and operating effective cloud architectures for your trading system. And, they will likely have a broader remit, different reporting lines, and competing agendas.

While it’s not quite accurate to suggest a cloud-managed trading platform is unattainable with in-house resource alone, such a feat is unequivocally expensive, and impractical for most, if not all, financial institutions.

Experience, insight and certainty

A specialist managed service partner can give you access to world-leading expertise, the likes of which any financial institution would be unable to maintain internally. More than this, the partner can bring a broad perspective across the entire market of what works best. They have the advantages of having solved every kind of problem and of having developed a deep understanding of applied best practice.

As regulations, financial markets and technologies evolve, a specialist partner need only solve those challenges once. Their accumulated wisdom brings benefits to every client for a fraction of the price.

Certainty of outcome; continuous improvement

In-house teams are unable to achieve the guaranteed outcomes that managed services make available through robust service level agreements (SLAs). Typically, this is down to capacity and skills limitations in-house, the potential for unclear accountability across application and infrastructure teams, and competing priorities across support and development.

What’s more, the best managed service providers will operate with clear CSI (continuous service improvement) objectives. With outcome-based service models, providers are incentivised in such ways that you can expect quality to continue improving over time.

Together, these elements ensure that managed services unlock significantly higher value from Sophis or Fusion Invest than is feasible with internal teams.

MISCONCEPTION: Managed services mean standardised, shared platforms.

TRUTH: There are no shared platforms with Phi Partner’s PaaS model.

Phi’s revolutionary Platform-as-a-Service is built around you

It’s understandable that many financial institutions would be reluctant to move to a managed service for Sophis or Fusion Invest if they have poured significant time and money into tailoring their trading solution to meet their needs. The assumption that they would be throwing away their investment by reverting to a standardised platform often sees these institutions favour the status quo.

The reality is that managed services are not necessarily synonymous with standardised platforms. Phi’s revolutionary Platform-as-a-Service for Sophis and Fusion Invest maintains everything that makes your system unique to you, introducing standardisation only where it makes sense to improve operational efficiency or provide you with better outcomes.

As world-leading Finastra product specialists, we understand that every business has unique data, configurations, customisations and interfaces across their trading solution and wider technology landscape. When we implement PaaS, nothing is lost; we don’t just take over the core application but also everything you’ve built around it.

We migrate your Sophis or Fusion Invest platform in your own cloud tenant environment, then operate it for you. If you’d prefer Phi to handle everything, we can provide a secure, single-tenant cloud environment on your behalf, ensuring complete insulation.

For cloud, we apply best practice target architectures, tailoring your environment to meet your specific needs. Our standard service components are also tailored around you, adapted through our ‘service readiness’ workstreams according to your processes, organisational makeup and software development life cycles (SDLCs).

Standardisation and automation of operating processes do form an integral part of our PaaS model to drive cost efficiency and reduce risk. But we always leave your unique functional setup unchanged and never compromise your user experience. Although we tend to find that interfaces don’t require alterations, we analyse every point of integration when designing your platform, providing advice and assistance if minor re-engineering is necessary.

Annual upgrades, no obligations

Annual platform evergreening, included as standard, is one of the key benefits of our PaaS for Sophis and Fusion Invest. It’s important to clarify that upgrades are run according to your preferred schedule. We don’t force the adoption of interim service packs on clients who don’t want them and we don’t force our customers to be version-aligned with other customers.
However, evergreening gives you access to all the latest features from Finastra, thereby limiting the need to customise to those circumstances where it will bring real value. Everything about our cloud-enabled service is focussed on what brings benefits for your unique business.

MISCONCEPTION: My trading technology setup is too complex for a managed service provider.

TRUTH: Phi Partners successfully delivers services for the world’s most complicated trading software environments.

No challenge too big

Here at Phi Partners, we often hear businesses question whether their highly complex and customised trading system can ever be understood by an external provider. Our response is always the same. If you choose a partner with deep knowledge – not just of the vendor technology, but of how it is installed and integrated in a client environment; a partner who brings experience of the wider technology landscape and who understands your business – then complexity is no barrier.

We’ve worked with the most intricate, customised trading applications in the world, which means we fully anticipate the high degree of unique complexity that comes with legacy Sophis and Fusion Invest installations. We are comfortable taking these over. And we know how to drive improvements.

Our approach to implementation and ongoing service delivery is designed around gaining client-specific insight. We allocate ample time for knowledge transfer to understand your extensions and integrations, and we bring proven methodologies to ensure the process is both thorough and effortless for your team.

A complete documentation refresh is included as part of PaaS, while our service delivery model ensures ongoing document updates via an explicit knowledge management function.

Depending on your preferences and your unique business case, we can either take over maintenance and enhancement of your customisations or leave you in control. Our bespoke PaaS provides as much or as little development and testing assistance as you require.

And while standardised approaches and automation do streamline things like monitoring, alerting, operational processes and testing, our architectures and implementation plans are always specific to your complex needs.

Take a smarter, simpler approach

Phi’s PaaS for Sophis and Fusion Invest is redefining the way that financial institutions approach the management of their trading solution. Utilising the cloud, drawing on deep expertise of both vendor and ancillary technologies, as well as offering unparalleled industry experience and insight, our solution shatters misconceptions surrounding managed services.

To find out more about how Phi Partners can help you unlock the full value of your trading solution, speak to one of our experts today.

Visit https://www.phipartners.com/sophis-fusion-invest-paas/ to learn more about Sophis / Fusion Invest PaaS, and discover what it can do for you.