Five reasons to outsource your firm's C level IT roles

As the financial markets grow increasingly complex, compliance requirements become more stringent and investors are more demanding, many firms are seeking new ways to drive efficiencies and transform operations. Attitudes to outsourcing are mixed; many firms are open to the idea of outsourcing IT support functions or fund administration, but only a brave few consider outsourcing their CTO function, despite anecdotal evidence that suggests it can benefit firms financially and operationally.

If you are considering outsourcing your CTO or other C-level IT roles you may need some compelling reasons to help you make a decision. Here’s how I believe you could benefit:

1)     Acquire top talent for less money

Firms gain access to experienced and knowledgeable professionals at a fraction of the cost of hiring a full-time person. The firm doesn’t bear the costs of training, retention and recruitment associated with full time employees.

2)     Objectivity

Outsourcers can assess a firm without bias or influence to make objective decisions and recommendations that will benefit the firm, not individuals. An outsourced CTO can provide a vendor independent review and make recommendations for your firm with regards IT requirements, which are based purely on strategic needs, not on pre-existing relationships.

3)     Align technology with business operations

An outsourced CTO or other C-level IT leader will be skilled in matching technology requirements to those of the business, to ensure they are aligned now and into the future.

4)     Wide experience

Firms benefit from the wide range of experiences and connections an industry expert outsourcer brings to the business. A quality outsourced CTO may draw on these connections and their wider team expertise to advise on cloud strategies, provide strategic advice on risk management, compliance and driving efficiency gains. These might not be skills that are easy to find in a single individual, so the large pool of expertise that an outsourcer brings is invaluable.

5)     Flexibility

An outsourced C-level IT leader is a flexible arrangement and can be used as a short-term solution between permanent appointments, or as a longer term, full or part-time valuable service. An outsourced arrangement can be adapted or ended more simply than a permanent member of staff.

On a more cautious note, it’s important to remember that you may be outsourcing the role, but it’s still your responsibility to make sure that your service providers are meeting standards and regulatory requirements. If your outsource partner fails, it is your responsibility and no investors or regulators will give you the benefit of the doubt. Under GDPR the ICO will be looking for a certain level of oversight which means that the manager and firm is completely in control. The soon to be extended Senior Managers and Certification Regime will also place responsibility for firms’ failures at the feet of the senior manager in charge of that area, which could be the COO, CEO or Managing Partner and not the outsourced CTO or other C-Level IT professional.

On a final note, try and maintain transparency wherever possible. The FCA published a paper in 2016, called FP16 which was around managing the supply chain and third parties which contained an item on minimising the supply chain. Firms should not allow outsourced services to be masked by other service providers, so try and build a transparent model where contracts with different providers are taken out directly.