By Tom Shefford, Head of IT at Opus Technology
Financial services organisations face a relentless need for modernisation with rising regulatory demands, cost pressures, and the constant threat of agile fintech companies reshaping the market.
These challenges are compounded by ageing IT and complex contracts. Legacy systems introduce security vulnerabilities and slow the business down, while fragmented, multi-vendor contracts limit the flexibility needed to innovate.
In response, financial firms are increasingly outsourcing their IT to managed services providers (MSPs), whether that’s on a full or co-managed basis.
This is a relationship that needs careful management too, particularly reviewing performance and value. But most IT leaders only reassess their managed service provider when the renewal letter arrives, which is exactly the moment they have the least leverage.
Timing: when to start considering switching or staying
When contract renewal comes up, IT decision-makers are under pressure. Auto-renewal clauses are designed around this inertia and new contracts often end up being signed on unchanged terms.
Instead, the best time to consider switching or staying is well in advance of the notice arriving. This is the leverage window, providing time and space for thorough consideration and review.
Reverse engineer the process, locating your notice period and renewal date first. For highly regulated industries like financial services and multi-site businesses, MSP contract complexity will be greater, and a rushed switch is a compliance risk as much as an operational one.
For a typical multi-year managed IT contract, you should carry out an internal health check at the year-to-go mark, considering if the current provider is delivering against SLAs and current business needs.
At 6-9 months out, it’s time to decide whether to go to market as well as the key points you plan to raise as part of the renegotiation process. If you decide to consider alternative providers, it’s best to run the comparison and RFP process in parallel with negotiation at 3-6 months to go.
Before the notice deadline approaches, you should then be in a strong position to make a final decision with time to renegotiate terms or execute a switch cleanly.
Investigation: reviewing current relationship and the market
The main goal here is not to negotiate at all, or even signal that you’re considering switching. It’s time to understand your own position, discreetly.
Gather hard performance data on your current MSP. Consider SLA adherence, ticket resolution times, first-time fix rates, uptime and downtime, and any recurring issues you have experienced.
Ask yourself: is the partnership collaborative? Are they proactive? Am I receiving a quality service? These soft metrics matter as much as performance.
Finally, you need to consider if they are still the right fit for your business: have you outgrown the service they can offer or moved in a different direction they can’t follow?
For your provider, it should be framed as a routine performance review. Internally, don’t trigger a formal procurement process until you have the evidence to make your case.
Once you’ve looked inwards, you can look outwards. Exploratory, informal discussions with your top pick MSPs is the best way to begin before sending out RFPs. Consider their service model and pricing, SLA standards, security, sustainability and compliance credentials, cultural fit, and financial services experience.
Even if you decide to stay, this intelligence is useful in renegotiations and getting buy-in internally.
Execution: how to de-risk and streamline a switch
Making a switch can seem daunting but it doesn’t need to be. It’s a known, plannable risk which should be a smooth experience, led by your new partner.
The discovery and audit stages are thorough for a reason; it’s time intensive but gets them up to speed on your environment, challenges, and future vision. This is followed by transition planning which is jointly agreed and defines clear phases, owners, and timelines.
Then comes the knowledge transfer which includes structured documentation and admin credentials handover under contractual co-operation. Your new MSP can then carry out full onboarding and set up before anything is switched off.
The go-live is staged and scheduled, often phased or out-of-hours, to ensure continuity and protect against costly downtime. You may have a short period of parallel costs, but this is de-risking the transition process rather than wastage – especially important for regulated sectors like financial services.
Expect your new MSP to be in close contact with you post-switch as they monitor and resolve any teething issues. It’s also the perfect opportunity to align IT to business goals and prioritise early collaborative technology road-mapping.
