Managed Services Podcast
In the aftermath of the financial crisis, buy-side firms are leveraging managed services by application vendors to enhance competitiveness and support growth strategies.
In addition to helping manage costs, Charles River's managed services increases application ROI by supplying expertise that is difficult to build and maintain in-house.
In this podcast, Ed Fitzpatrick, director, Managed Services, Charles River Development, discusses buy-side firm’s growing reliance on managed services to optimize IT resources and manage for growth.
We’re here with Ed Fitzpatrick, director of Managed Services at Charles River Development. Ed, a lot has been written lately on buy-side firms’ growing uptake on ‘best sourcing’ to optimize IT resources and manage for growth. How would you define best sourcing for buy-side firms?
To put best sourcing into a context, most people are familiar with the traditional term of outsourcing, which historically has been a cost-focused business decision. People typically would outsource more non-strategic types of systems or functions; more of a commodity.
Best sourcing on the other hand is much broader; it’s much more strategic. It’s where people leverage expertise, not only at commodity-level types of infrastructure, but in systems and software. Fundamentally, it allows both organizations to focus on and leverage their core competencies.
What’s driving the trend for best sourcing solutions?
There are several items that are driving the trends towards best sourcing of solutions. The key thing is the competitive nature of the industry. People, especially coming off the last couple of years in the worldwide financial situation, it’s about: proving competitiveness; lowering costs; driving operational efficiencies; getting more value out of their investments in technology and systems; better aligning costs and values; and of course, reducing the strain on limited internal IT resources.
What makes an investment management system a good candidate for best sourcing?
What has happened is the investment management software, as the industry has evolved, has become increasingly complex. It takes a variety of skills in order to properly manage an investment management system. It includes not only business expertise; software expertise; fundamental technology infrastructure, such as managing servers and systems and databases, on a 24x7 basis.
Many shops do have internal IT departments that can handle this; especially larger ones in general can assume these duties. But, for smaller shops or even mid-sized shops where those with very limited internal IT resources or even larger ones that have a strategic focus on outsourcing, it’s not realistic to be able to rely on those internal resources. It tends to be too much for a single person to handle, or a limited IT staff to handle.
So what we do with our service is we actually complement the internal department. We’re kind of an extension of their capability and partner very closely with clients to fully support the Charles River solution. And with Charles River, and our expertise, for basically less than a cost of a single person – especially where you consider a fully-loaded staffing cost – Charles River can supply the overall system management capability.
The interesting thing to note is that over the past year in 2010, our Managed Services business has grown by 40%. We expect to grow by at least that much in 2011.
How can Charles River’s Managed Services solution help clients manage for growth?
In helping clients manage growth, it allows each entity, the client and Charles River, basically to focus on their core competencies. It allows the client to optimize their internal IT resources. They don’t have to make large or up-front or incremental investments in staff and hardware and software resources. Clients are able to better predict and align their IT costs with the business. It allows clients also to mitigate operational risk. In some cases we see where a client is heavily reliant on one or two individuals, and if those individuals are out of the office or otherwise leave the company they’re in a really tough situation.
With Charles River and our Managed Services, we have a whole team of Charles River application experts available to support each client. From a hosting point of view, the data is in a very secure environment. Each client’s instance of Charles River is dedicated and separate from other clients’ Charles River instances. Charles River has structured the Managed Services, and with each client having its own dedicated instance of Charles River, we’re still able to tailor the Charles River solution to meet your individual business requirements.
Another key plus to our service is that each client has an assigned Systems Analyst. There is an individual that you get to know very well, who also gets to know and understand you and your business very well. That makes for a very tight relationship between us and helps deliver on that idea of us being an extension of your team. It’s not like you make a phone call to a general help desk and that person has to try to figure out who you are and what your system is all about.
Thank you, Ed, for sharing your perspectives on Charles River’s Managed Services solutions.
You’re very welcome.