Escrow Release Event Case Study

Use case

Cloud Resilience, Release Event

Industry

Financial Services

Services

EaaS Replicate

Challenge

As organisations increasingly outsource critical applications and adopt cloud-based solutions, managing the risk of third-party supplier failures becomes crucial. To safeguard a business-critical application, a leading financial institution took proactive steps by implementing an Escrow as a Service (EaaS) Replicate Agreement.

The financial institution launched a new cloud-hosted employee ecosystem platform as part of its HR and employee experience program. This platform, hosted on Amazon Web Services (AWS) and Microsoft Azure, enabled employees to manage healthcare costs, access well-being resources, and engage with critical HR services.

Given its centrality to employee well-being and the operational efficiency of the company, the institution recognised that any supplier failure could severely disrupt internal HR processes and have broader business implications.

Without a robust contingency plan, a vendor failure could have jeopardised business processes, leading to widespread operational disruption that would have been time-consuming and costly to recover from.

As part of their business continuity plan, the financial institution partnered with Escode to implement an EaaS Replicate Agreement, ensuring continuous access to the platform in the event of supplier failure.

When the supplier failed to meet its contractual obligations, the financial institution successfully invoked the EaaS Replicate Agreement, accessing the necessary source code and build reports.

Solution Implemented

As part of the EaaS Replicate Agreement, Escode undertook comprehensive verification and validation of the escrowed materials. This provided assurance that the financial institution could take over the platform’s maintenance if necessary and that the source code could be compiled and deployed within a replicated cloud environment.

The process involved two key steps:

• Verification: Ensuring all deposited materials were accurate, up-to-date, and included the latest source code, configuration files, and build reports.
• Validation: Confirming that the source code could be compiled and deployed effectively within a mirrored cloud environment, ensuring full platform functionality.

Escode securely stored all validation reports and deposits within its Virtual Vault Cloud Environment, releasing them only under the escrow agreement’s terms. This ensured that the institution could seamlessly continue platform operations in the event of supplier failure.

Having Software Escrow in place allowed the business to transition platform maintenance in-house smoothly and ensure uninterrupted employee access to critical HR services.

Release Event

The employee platform, which supported key HR functions for thousands of employees, was developed and maintained by a third-party vendor. When this vendor failed to meet its contractual obligations and subsequently went into administration, the financial institution initiated a release event under the escrow agreement. This was a critical moment, as access to the source code and application materials was essential to maintaining continuity and avoiding disruption of key HR services.

Release Process

The EaaS Replicate Agreement provided the financial institution with access to a separately hosted, mirrored instance of the application.

The key steps involved in the release process included:

1. Notification of Release Event: Upon the supplier’s failure to meet contractual obligations, the financial institution immediately notified Escode, triggering the release event.
   
   
2. Vendor Notification: Escode promptly informed the software vendor of the release event, initiating the process for releasing the escrowed materials.
   
   
3. Service-Led Daily Meetings: Escode conducted service-led daily meetings to manage and coordinate the release process efficiently. These meetings ensured timely updates, swift resolution of issues, and alignment with the financial institution’s needs.
   
   
4. Appointment of In-House Legal and Technical Experts: A dedicated team of in-house legal and technical experts was appointed within Escode to oversee and facilitate the release process. This team ensured smooth execution, effective communication between all parties involved, and addressed any legal matters, providing support in resolving potential disputes.
   
   
5. Release of Deposit Materials: In the absence of a dispute from the vendor, Escode released the escrowed materials to the financial institution. This included the validated source code, build reports, and all necessary application components stored in Escode’s secure Virtual Vault Cloud Environment.
   
   
6. Rebuilding and Maintaining the Platform: With access to the escrowed materials, the financial institution independently rebuilt and maintained the platform. This allowed the institution to transition maintenance in-house seamlessly, ensuring smooth and uninterrupted operation of the platform and continued employee access to critical HR services.
   
   
7. Dispute Procedure (if applicable): In the event of a dispute, a formal resolution process would have been followed to address any concerns raised by the vendor.

Results

When the supplier failed to meet its contractual obligations, the financial institution successfully invoked the EaaS Replicate Agreement, accessing the necessary source code and build reports. This allowed the institution to transition platform maintenance in-house smoothly, enabling the bank to move ongoing maintenance and deployment in-house by using the technical document secured in Escode’s Virtual Vault facility. Avoiding operational disruptions and ensuring that critical HR services for employees continued without interruption.

The case study highlights the importance of a robust third-party risk management strategy and the value of an effective escrow solution. By implementing the EaaS Replicate Agreement, the financial institution safeguarded its cloud-based application and ensured long-term business continuity. For organisations with critical business applications hosted by third-party vendors, having an EaaS Replicate Agreement in place provides an essential safety net. In this case, the financial institution’s decision to implement an escrow agreement with Escode allowed it to minimise downtime, protect employee services, and maintain operational resilience despite supplier failure.