Now more than ever, selecting the right technology is critical to the successful operations of any organization. Given the advances in financial services industry, this is particularly true in the Investment Management and Hedge Fund industry. The fervent controversy surrounding Michael Lewis’ new book ‘Flash Boys’ illustrates how technology has become the most important competitive differentiator for hedge fund managers. Selecting the right IT services for hedge funds is critical to addressing investors’ growing desire for secure, robust and reliable infrastructure.
Below are Six Considerations for Hedge Funds evaluating outsourced IT providers
1. Quality of IT Consultants
In today’s environment, your IT provider will be the most important service relationship you will have. When selecting an outsourced IT provider, it is important to know whom you will potentially be working with. What is the quality of the management team? Are they seasoned and reputable? What about their support staff? Are they a skilled technical staff of engineers who can help in all stages of the infrastructure build-out and maintenance?
2. Breadth of IT Solutions
A key criterion that any Hedge Fund CTO must consider is the scope of the firm’s service offering and capabilities. Does the IT provider in question offer all of the solutions and services necessary to address the technical requirements needed for your firm to operate effectively, consistently and efficiently? Remember, these needs will vary based on your firm’s specific business requirements. They can range from private cloud services, backup & recovery services, security, application hosting, business continuity planning, disaster recovery, data storage and mining, telecom services, IT consulting, electronic communications systems and software development.
3. Industry-Specific Deployment Expertise
Specialization is critical. Make sure you find out if the service provider possesses deep experience in deploying enterprise solutions and services in an investment management environment. What is the scope of this experience? Do they have a wide range of experience having worked with small start-ups as well as larger, well-established firms? IT firms are a commodity so be sure to select one that is experienced in deploying systems that are specific to your industry with a track record to prove it. Check references of past clients and ask for examples of clients whose technical needs and scope are a match to your firms.
4. Disaster Recovery approach
Things happen. Hurricanes, blackouts, floods, disasters, are all too common. So it’s important to know the IT firm’s disaster recovery process and procedures. Do they employ proper risk controls designed to allow continued performance and availability? What are their data security and retrieval protocols? Will the provider ensure that your data is secure, protected, and accessible even in the face of disaster?
5. Cloud Infrastructure
Cloud computing has become the de facto infrastructure option for investment firms. While Cloud services have been in the market for a number of years its still a very specialized and nuanced aspect of the IT service industry. Be sure to look for a provider that has a robust, scalable and secure cloud infrastructure protocol. As mentioned earlier, Cloud computing for the financial services sector is a specialized skill, so make sure that the firm employs highly trained and certified professionals with experience in financial services operations. As a standard, Tier II or III data centers that are SAS 70 or SSAE-16 certified are a good bet for critical data hosting.
6. Vendor Partners and Network
No IT firm does it all. Any good IT firm maintains key relationships with partner vendors who fill critical service gaps. This is a simple reality and the quality of these partners – and their relationship with them – is of high importance. Does the firm have strong vendor relationships? Are they the right mix of best-in-class providers for your unique needs? Strategic partnerships with top-tier technology companies are crucial to maintaining a world-class IT environment for your firm.
GCInfotech offer IT Services for Hedge Funds and Financial Companies in CT, NY and NYC area. Call us 203 327 5700 to discuss your technology needs.