In May 2000 Marlborough Stirling, a leading provider of software and services to the mortgage, life, pensions and investment market sectors, won a lb2.5 million deal, over five years, to provide Wesleyan Financial Services with Lamda, Marlborough Stirling`s life and pensions administration system, on an Application Service Provision (ASP) basis.
Lamda enables Wesleyan to manage the entire life cycle of its life and pensions products from initial customer enquiry through to final policy maturity.
Lamda also provides Wesleyan with the ability to handle the large transaction volumes associated with administering its portfolios. Since going live in September 2000 the system has enabled the company to reduce its administration costs, and has given it the flexibility to launch a variety of products much more quickly and more cost effectively.
But it is not just the functionality of the system that has enabled the company to see such benefits. Wesleyan firmly believes that the combination of Lamda and its decision to access the solution via an ASP channel has made a deep impact on the organisation.
Under the agreement Lamda has been developed to provide Wesleyan with a system tailored to support its multiple brands. The ASP model has enabled the provider to bring an innovative range of products speedily to market and to benefit from a more transparent cost structure.
As well as providing its own Lamda system via ASP, Marlborough Stirling has integrated it with existing Wesleyan systems to facilitate straight through processing.
Birmingham-based Wesleyan has effectively outsourced the control of the software (Lamda) to Marlborough Stirling. Using ASP means Wesleyan can benefit quickly from the shared upgrades to Lamda as the responsibility for the maintenance, development and support of the application lies with Marlborough Stirling. In addition to the provision of ASP services, Marlborough Stirling manages Wesleyan`s system management functions, batch processing and controls and actions its reporting functions, related to Lamda.
Although the hardware for the system is kept on Wesleyan`s premises, location is irrelevant as the entire system is linked by a network. Marlborough Stirling can control the system remotely from Cheltenham or on site in Birmingham. This is something that Wesleyan sees as a huge benefit as it provides a disaster recovery solution. And, having contingency plans in place against unforeseen events is crucial for all financial organisations.
One reason Wesleyan chose the ASP model was to avoid the up-front licence costs of traditional IT contracts. It found the simplicity and flexibility of ASP pricing deeply attractive.
After an initial set up charge Wesleyan is only then charged per transaction. For instance every time a user processes a pension on the system Marlborough Stirling makes a single charge to cover the use of the system and the processing of the transaction. Wesleyan thereby eliminates disproportionately high overheads and in essence, pays only for the system capacity it requires to support its business volumes. This makes it easier for the finance department to control costs.
Marlborough Stirling and Wesleyan have built evaluation techniques into their relationship, in order to ensure that cost control remains a key focus. Marlborough Stirling provides regular, ongoing consultancy to ensure Wesleyan is getting the most from the service. As part of this it provides a regular financial audit of the accounts to ensure that the system is being used efficiently. This way problems can be remedied quickly.
Ray Lowe, head of IT at Wesleyan, commented:
"ASP is all about flexibility. We can now chop and change the functionality of our system to suit the needs of, and changes within the business. In an age where change occurs on a daily basis, I believe that many companies will simply not be able to afford to make static investments in IT, better to partner with an ASP where appropriate and focus on their core business."
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