The key factors when deciding to outsource have changed in the new post-pandemic environment that fund operators find themselves in 2022 and beyond.
This, says Joe LaFemina, Senior Manager, Outsourcing Services, SS&C | Advent, is both an opportunity and a challenge.
Clear Path Analysis’s October 2022 report, “The Post-Pandemic Office: Operations, Technology, Outsourcing & Managed Services in the Investment Management Industry,” covers these issues with industry leaders at companies such as abrdn, SS&C | Advent, Mackay Shields LLC, and MetLife.
“Define what you want to accomplish and ask your vendors how they can handle it. Firms retain an accounting system while working with our team. We view it as a partnership.”
On the specific topic of what the key factors are when deciding to outsource and how most firms could continue to retain an in-house accounting system even when outsourcing, LaFemina was firm that it involves knowing your limitations and what you need.
“First, define what you want to accomplish and ask your vendors how they can handle it,” he said. “Firms do retain an accounting system while working hand-in-hand with our team. We view it very much as a partnership.”
The idea of where outsourcing remains controversial to some. “Opinions regarding outsourcing models have always been passionate,” said an article from Deloitte. “No doubt because they try to identify the very scope of what makes a difference, and hence the value, in the complicated alchemy of a successful asset manager.”
This attitude of where the value lies – can it even be found in outsourcing – was something LaFemina was keen to explore.
Vendor approach and KPIs
LaFemina also spoke on the complex world of differentiating yourself as an outsourcing organisation. The hows, and more importantly, the whys and what it gives you as an organisation.
For many firms, the Tier one and Tier two technology organisations generally give you the same across the board and can operationally support your organisation easier but are they easier at differentiation?
“Having the proper audit reports in place so they prove they have a level of knowledge so they can do what they can say they can do is key,”
LaFemina said firms should show exactly what needs to be done and when and must offer them the tools because there are different levels of managed service providers. “You have smaller ones with a few people who can do certain things very well and then you have a broader organisation.”
“Having the proper audit reports in place so they prove they have a level of knowledge so they can do what they can say they can do is key,” he added. “Do they have references that can vouch for them? Plenty of due diligence is necessary, but the client and the managed service provider must understand the relationship.”
Key performance indicators and Service Level Agreements are important, he added.
When it comes to data and technology outsourced services, areas to watch and monitor closely are customer satisfaction and quality, how it ensures business continuity, delivers services on time and within budget, and keeps finances in order.
“If the managed service provider isn’t forthcoming in asking questions about how that will be measured, then you probably have your answer as to whether they are the right provider for you,” LeFemina said.
To see more of LaFemina’s comments and to read the interview in full and report in full, please click here.
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