Project:
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Outsource Vendor Due Diligence
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Client:
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Confidential
- CC Pace
was prime contractor |
Benefit:
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The client was considering
placing a mission critical system into the hands of an
outside Application Service Provider - they were
"betting the farm" on the relationship. If the ASP was
unstable, the system was unreliable, or communications
were insecure, the client's business could fail due to
an unreliable system. Also, if customer mortgage loan
application data was insecure, the client would be
liable for information theft. My due diligence
investigation provided an unvarnished view of the ASP's
business and technical strengths and weaknesses so the
client could make an informed decision. The value to the
firm is dramatically higher than the due diligence fee. |
 Highlights
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Client's
core
loan origination system was hosted internally
-
Client
was contemplating redeploying IT staff to higher
value-add activities
-
An ASP
offered the client's LOS on a subscription basis via
Internet or private communications link
-
Tasks:
-
Assess
whether the LOS outsource provider credible and
reliable
-
Compile
an approximate incremental cost be for outsourcing
the system
-
Assess
whether there were
any unreasonable risks in outsourcing this mission
critical application to a third party
-
I
modified the CC Pace technology due diligence
methodology to focus upon the client's situation
including assessing ASP management strength and
financial health, infrastructure robustness,
security posture, and contract terms
-
The
assessment was performed through a combination of
records review, including the ASP's SAS-70 report,
onsite inspection of their facilities and interviews
with key staff members, and teleconferences with
other key players and references
-
The
assessment was accomplished on schedule and on
budget with the involvement of the client's VP IT
and CFO
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