Harmonizing IT while avoiding risks and vendor lock-in
As banks grow their IT complexity and needs grow in parallel. In this process, many banks end up with a patchwork of solutions from a plethora of vendors.
This situation is a double-edged sword. On the good side, it reduces the dependency on a single or a few vendors. On the other side, this patchwork creates additional complexities and inefficiencies. This is a difficult tradeoff: How to balance the need for a harmonized IT while minimizing risks and avoiding vendor lock-in?
Reducing the number of vendors your bank works with is the simplest way to achieve this goal. Indeed, this will naturally increase efficiency and reduce costs by streamlining operations and maintenance. But what about risks and vendor lock-in? These factors can be eliminated provided you select the vendors carefully.
Select perennial vendors. Minimizing risks requires that a provider will be there to support your growth and long-term plans. Therefore, avoid companies with troubled financials or without support from a larger group.
Select vendors that deliver the source code. This eliminates all potential risks as you remain in control of your IT and your business.
Select vendors that follow industry standards. This will improve interoperability and allow high levels of specific functionalities and differentiation by mixing and matching components as needed.
By limiting the number of vendors and choosing them with the above characteristics, you’ll get a neat, harmonized, and sustainable IT system while remaining in control. This will allow you to develop your vision and long term goals, using technology as a business differentiator.
David Andrieux, PhD