Interest in hosted services will increase

Having read the recent article on how the downturn could help IT get banks off legacy systems, it came as a surprise to learn that these financial institutions are not interested in the hosted model

Having read the recent article on how the downturn could help IT get banks off legacy systems, it came as a surprise to learn that these financial institutions are not interested in the hosted model, writes Doug Remington, head of document solutions, Premiere Global Services. I have to agree with Ian Benn of Fidelity Information Services that this will change.

The current economic climate calls for a different approach to the way IT departments deliver their services to the user and we are seeing that the introduction of cost-effective, externally hosted applications have a big part to play. Understandably, the hosted model does raise the old arguments around the relative merits of in-house versus outsourced services. However, what is needed now is not an all-or-nothing approach, but for both models to be tactically applied to the mix of services that IT is required to deliver.

By considering variables such as manageability, capacity and cost-efficiency, those in charge can decide which services are better handled in-house and which are more appropriate for a third party to manage. This is true of areas where provision of the service is not considered a core competency of the business, for example the fax server. It is in such situations, where the technical expertise may not be found in-house or the cost of implementing the service too high, that the hosted approach is most relevant.

The benefits of the hosted model are that implementation can be achieved with great speed and with very low costs. Integration at the client end is minimal and because, in many cases, the company pays only for what it uses, there are no additional expenses associated with equipment and software.

For instance, we were able to take charge of the document delivery services of one of our banking clients within a month. Capacity issues disappeared and worries about meeting regulations were quashed as the time taken to transfer documents was cut in half. Also, the complexity of managing and delivering the service has been greatly reduced, as has the cost. The result is that service levels have risen and pressure on the IT department has lessened.

So it comes as no surprise that more of our clients are coming to us to increase their effectiveness and the breadth of services they supply by increasing the number of externally hosted services.

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