In this final article of our series, we turn our attention to the possibility of achieving your objectives from an operating model review and in doing so a different outcome to the current setup whilst maintaining the same scope of services for your outsourcing arrangements.
Throughout this series, we have covered how managers are responding to market conditions through reviewing their operating models and outsourcing arrangements, the four value drivers that underpin an operating model review, and the key considerations when changing the scope of services outsourced.
Now, we explore whether meaningful improvements can be realised without altering the outsourced scope of services.
Running a tender process
Running a tender process to validate pricing levels or empirically support a reduction. Apply caution to significantly lower pricing because new providers won’t understand the requirements in the same way as your existing service provider(s).
Following a robust process and having a consistent methodology is key to reducing the time on your team to run a process, for example the BVCA[1] provides a template for running a Request for Proposal (RfP) for fund administration services that could be requested from a tendering party.
Feedback and service improvement monitoring
Any material outsourced provider, particularly your fund administrator should have a mechanism in place for feedback to be provided. If there isn’t one, request one is setup and identify areas of improvement well ahead of time to ensure the best possible outcome.
Once the meeting is held, there should be a reporting mechanism agreed whereby the service provider can demonstrate whether they’ve met the agreed service improvements requested and/or explain the action they’re taking.
The stronger the relationship, the more this type of meeting will be encouraged particularly if there’s an opportunity to champion examples of outperformance.
Technology
Are there technology solutions that can be deployed to achieve your objective(s) whether cost reduction, operational efficacy, risk reduction or an improved investor experience?
These solutions may be available under your current service provider(s) or may some direct require investment.
Recap
In this ‘Outsourced Models are Changing’ series, we hope we’ve emphasised how adapting and evolving your outsourced models can enhance performance, ensuring that your business remains responsive to changing market conditions and are partnered with the best outsourced providers to meet operational demands. Maintaining a balance between cost, quality, and strategic alignment is key to deriving maximum value from your outsourcing arrangements.
Belasko offer tailored, full scope fund administration, focused on delivering the highest quality solutions across the entire fund lifecycle and across multiple asset classes. We’ve worked closely with our clients on developing and improving their operating models to enhance their performance. If you’d like to discuss further, get in touch with Nick McHardy, Group Head of Funds at [email protected].
[1] bvca.co.uk/policy/Industry-Guidance-Standardised-Documents/RFP-for-Fund-Administration-Services
