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12 April 2021

Maximizing Back-office Performance with Investment Planning for the Firm

I am a bit of a nerd when it comes to personal finance. I follow the markets and finance thought leaders in my spare time, and talk my wife’s ear off about our finances and how we’re investing our money. A consistent theme taught to investors is the importance of creating a plan for your investing. We constantly hear about the push and pull between the heart and the mind and how we need to remove emotions from our investment management by creating and sticking to plans. The investment plan is central to how I manage my own money, and also how you manage your client’s investments.

If you are part of an investment management firm, your team is an expert at developing investment plans for clients, evaluating them for opportunity, and measuring the success of the plan with monthly, quarterly, and annual reviews. You do this strategic work daily for your clients, but have you completed this process for your firm’s back office investments as well?

As part of the SS&C Advent Professional Services team, when working with a client on a new initiative, or helping them justify the cost of some automation or utility, I like to ask how the investment in question fits into their overall back office strategy or investment planning for this year. Typically, clients do not have an answer to this question.

This begs the question: why would we view a firm’s investments in software, services, and automation any differently than the investments made for client portfolios?

If there were not an overarching investment plan today, how would one look to measure success? This is where the back office investment planning comes in.

Not quite sure where to start? Some questions worth considering:

  1. What are you measuring today? There are certainly many measures of back office success we could look to; but how do these metrics feed into the success of the firm? These will vary wildly from firm to firm depending on the firm’s stage and roadmap, the most important thing is that there are tracked, and the relationship between them and firm success is known.
  2. For the metrics you track, what does success look like to you? Is there a direct dollar cost other than labor for this? Are you paying for data/licenses/hardware/contractors that you don’t need? Are you sacrificing front office agility and missing business? Opportunity costs are everywhere and often hard to find.
  3. What metrics and KPIs are other firms using? It is very important to be able to compare your firm against peers to help find areas of improvement within your own business.
  4. What is your plan? Without a plan to execute against, it’s difficult to pick your performance measures, and what investments to make at any given time. Further, you run the risk of myopic focus on whatever the last thing someone complained about was, or perhaps that burdensome task that feels like you spend too much time doing. While these may warrant laser focus while they’re happening, it’s often the secondary, auto-pilot low stress tasks that are easily automated and often overlooked.

In addition to these considerations, another critical pain point is that the back office is often tied up with reactive tasks from front and mid-office initiatives, putting an additional strain on non-optimized operations outside of just technical capabilities, and reducing the likelihood that improvement initiatives are undertaken at all.

If your firm is at a crossroads with managing back office efficiencies and getting a better grasp on your technology’s overall value and contribution to your firm’s strategy, we can help.

Whatever your digital or operational challenge looks like, this is an area where a partnership with SS&C Advent Professional Services can provide tangible value to your firm. We can work with your team to help you define and evaluate your current tech investment planning strategy, build metrics to measure your firm’s success, and help plot a new course that better matches your firm’s overall goals. Request a consultation with our team to start driving positive change and improvement in your firm.