Agile Procurement in Financial Services
November 25, 2019

Ben Henshall
Red Hat

Share this

In today's ever-changing business landscape, more and more companies are operating like software companies. Through the adoption of agile technologies, financial firms can begin to use software to both operate more effectively and be faster to market with improvements for customer experiences. Making sure there is the necessary software in place to give customers frictionless everyday activities, like remote deposits, business overdraft services and wealth management, is key for a positive customer experience.

It has long been established that procurement is an important stage in the adoption of technology to drive innovative investments in the financial services industry. And just as the business looks to be more agile in the use of technology, the technology supplied need to be available to the business quickly. This gives way to the notion of agile procurement.

Agile procurement is the idea that the supply of technologies and the associated services can also be acquired in a flexible, agile manner. Agile procurement follows a similar principal as agile development and operations (DevOps) practices in that it introduces new policies and ways of working and can become a better means of accelerating procurement of next-gen applications. Agile procurement processes work to improve technology adoption to be more timely and in step with business and development teams. Indeed, improving collaboration across teams and improving technology vetting processes, policies and organizational barriers in this redefinition of procurement procedures.

In today's business landscape, it is important that companies work quickly and are not bogged down by long lead times and requirements gathering, slow feedback cycles, multi-tier governance and approval policies. And when these detriments to speed to market are combined, they can stymie company goals leaving customer needs unfilled. Agile procurement is focused on the longer term success and adoption of technology, focusing the results that can be gleaned from applying new, innovative technology in practice, rather than in concept. Starting with business and technology teams agreeing on a specific minimally viable product (MVP) necessary to reach the desired business outcomes, a portion of the procurement budget is used to acquire only the necessary technology to use in the pilot.

This more inclusive decision-making replaces process, focused on business outcomes counters traditional, central planning approaches and by default, makes processes more agile given all parties needs are included from the start. The focus is then able to turn to delivering code and features into a production-ready application within tight timeframes. During this process, development, testing and ops, in addition to an assessment of a technology's impact on policy, processes and people are considered, so that the impact of the application and associated technology adoption become integral to the pilot process. This in turn, alleviates the traditional after-thought of technology acquisition, namely adoption.

In order to have agile procurement, financial services first must ensure they have agile development in place — in fact the two, hand-in-hand makes it easier to be able to keep up with changing market factors and business requirements.

One of the main outcomes of agile procurement is that compared to traditional procurement methods, it results in lower procurement and production costs. It costs far less to make changes to MVP deployment done in a short production window (especially with a microservices approach) than one done over a longer period of time, using processes that don't account for micro-adjustments. This is partly because when agile procurement is in place, the organization can more quickly develop and deliver code, and the quicker code is delivered, the longer the company has to cross-sell and pursue other revenue-generating options.

Agile procurement can lead to positive business outcomes, and the culture and road to get there is quickly realized with the use of enterprise open source. Secured by design for organizations, enterprise open source is a path to new, innovative technologies. Organizations that have agile procurement in place can more quickly adapt to business change, solve shared problems faster and use open source standards to preserve business agility while cutting down costs and providing new innovations that can keep up with business needs and customer demands.

Ben Henshall is Senior Director, Financial Services, at Red Hat
Share this

The Latest

March 19, 2024

If there's one thing we should tame in today's data-driven marketing landscape, this would be data debt, a silent menace threatening to undermine all the trust you've put in the data-driven decisions that guide your strategies. This blog aims to explore the true costs of data debt in marketing operations, offering four actionable strategies to mitigate them through enhanced marketing observability ...

March 18, 2024

Gartner has highlighted the top trends that will impact technology providers in 2024: Generative AI (GenAI) is dominating the technical and product agenda of nearly every tech provider ...

March 15, 2024

In MEAN TIME TO INSIGHT Episode 4 - Part 1, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at Enterprise Management Associates (EMA) discusses artificial intelligence and network management ...

March 14, 2024

The integration and maintenance of AI-enabled Software as a Service (SaaS) applications have emerged as pivotal points in enterprise AI implementation strategies, offering both significant challenges and promising benefits. Despite the enthusiasm surrounding AI's potential impact, the reality of its implementation presents hurdles. Currently, over 90% of enterprises are grappling with limitations in integrating AI into their tech stack ...

March 13, 2024

In the intricate landscape of IT infrastructure, one critical component often relegated to the back burner is Active Directory (AD) forest recovery — an oversight with costly consequences ...

March 12, 2024

eBPF is a technology that allows users to run custom programs inside the Linux kernel, which changes the behavior of the kernel and makes execution up to 10x faster(link is external) and more efficient for key parts of what makes our computing lives work. That includes observability, networking and security ...

March 11, 2024

Data mesh, an increasingly important decentralized approach to data architecture and organizational design, focuses on treating data as a product, emphasizing domain-oriented data ownership, self-service tools and federated governance. The 2024 State of the Data Lakehouse report from Dremio presents evidence of the growing adoption of data mesh architectures in enterprises ... The report highlights that the drive towards data mesh is increasingly becoming a business strategy to enhance agility and speed in problem-solving and innovation ...

March 07, 2024
In this digital era, consumers prefer a seamless user experience, and here, the significance of performance testing cannot be overstated. Application performance testing is essential in ensuring that your software products, websites, or other related systems operate seamlessly under varying conditions. However, the cost of poor performance extends beyond technical glitches and slow load times; it can directly affect customer satisfaction and brand reputation. Understand the tangible and intangible consequences of poor application performance and how it can affect your business ...
March 06, 2024

Too much traffic can crash a website ... That stampede of traffic is even more horrifying when it's part of a malicious denial of service attack ... These attacks are becoming more common, more sophisticated and increasingly tied to ransomware-style demands. So it's no wonder that the threat of DDoS remains one of the many things that keep IT and marketing leaders up at night ...

March 05, 2024

Today, applications serve as the backbone of businesses, and therefore, ensuring optimal performance has never been more critical. This is where application performance monitoring (APM) emerges as an indispensable tool, empowering organizations to safeguard their applications proactively, match user expectations, and drive growth. But APM is not without its challenges. Choosing to implement APM is a path that's not easily realized, even if it offers great benefits. This blog deals with the potential hurdles that may manifest when you actualize your APM strategy in your IT application environment ...