In an increasingly digital world, small and mid-sized software firms face unique challenges when selling their solutions to large enterprises. Operational resilience, due diligence, and risk management are critical areas for these organisations. These firms must demonstrate value and build trust within these areas.

Ensuring robust operational resilience not only mitigates risks but also provides a competitive edge, especially when working within highly regulated markets, such as the financial services space.

Alex McCulloch, Director of Global Strategic Accounts at NCC Group’s Escode shares his insights on how small and mid-sized software providers could use solutions such as Software Escrow, a strategic agreement that protects both software licensees and licensors against unforeseen events, to gain a competitive edge when selling to enterprises.

Industries that are heavily regulated such as finance, healthcare and aviation require their software partners to have robust risk management solutions in place. How could software firms meet these expectations and stand out in a crowded market?

Mitigating operational risks

Enterprises demand reliability and security from their software vendors. IT disruptions - say cloud outages - can lead to significant downtime resulting in reputational damage and financial losses. Such disruptions can stem from many and untold sources, even natural disasters. Software firms must adopt proactive risk management strategies to ensure service continuity in these instances.

Enhancing client trust and credibility

In a competitive market, providing clients and customers with the reliability and stability of your service is critical. Enterprises need assurance that their software partners can deliver uninterrupted support and services.

Transparency in risk management practices and offering guarantees, through solutions such as Software Escrow agreements, could significantly enhance client trust. And as not every software provider offers these agreements, it could help them stand out from the competition.

Regulatory compliance and business resilience

Navigating the regulatory landscape is a significant challenge for any organisation. This is particularly the case within the financial market. Bodies like the Financial Conduct Authority (FCA) in the UK and the Digital Operational Resilience Act (DORA) in the EU impose strict standards on how financial institutions manage third-party ICT vendors – such as software suppliers. Compliance with these regulations is not only mandatory but also a mark of credibility.

By partnering with Software Escrow providers, software firms are more likely to meet regulatory requirements because they help manage third-party compliance, mitigate penalties, and maintain trust with clients and regulators. This proactive approach is crucial for gaining a foothold in the enterprise market. It also provides an extra level of trust for potential enterprise customers, as they know their software providers with these agreements are fully compliant.

Mambu, a software as a service (SaaS) banking engine, exemplifies how small and mid-sized software firms succeed in supporting enterprises in highly regulated markets. By leveraging strategic risk management solutions and partnering with Escode, Mambu implemented an Escrow-as-a-Service (EaaS) solution. This helped Mambu comply with stringent financial industry regulations and provided its clients with confidence in the resilience of their software.

Mambu’s proactive approach to risk mitigation supported its digital-first strategy. So, it aligned with broader goals of enhancing regional connectivity and economic development. This robust risk management positioned Mambu as a leader in secure and compliant financial services.

By adopting robust risk management solutions on behalf of customers, small and mid-sized software firms could safeguard their operations and foster strong client relationships. Success stories like Mambu illustrate how proactive risk management leads to market leadership and client trust when getting in front of enterprises.

Software firms must leverage every tool at their disposal to overcome challenges and gain an edge. Partnering with escrow providers ensures compliance with industry regulations, builds credibility, and fosters trust with enterprises.

The tri-party agreements between enterprises, software firms, and escrow providers mean business-critical data and digital systems are accessible even in the event of supplier failure. This assurance is invaluable for enterprises looking to minimise operational risks in an increasingly digitally connected world.

Neil Bellamy, Head of TMT and Services, says: “Offering escrow services to your large enterprise clients as an upfront and integral part of your sales process could really help with any initial concerns from the business about engaging with a much smaller but mission-critical software provider. It’s also more likely to help when you arrive at contract negotiation and governance stages and could help to significantly reduce the sales and onboarding timeline.”

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