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22 July 2020

Work From Home Warrants a Fresh Look at Outsourcing

What’s the outlook for outsourcing in the wake of work-from-home? I recently took part in a panel discussion on outsourcing during Hedgeweek’s Emerging Manager Digital Summit in June. And though the panel was set up to explore the merits of outsourcing in general, the conversation was certainly shaped by recent events.

There’s no question that the COVID-19 pandemic has had a disruptive effect on asset and fund management operations. Not only were teams displaced from their offices, their computing environments and each other, but the market’s gyrations and investor anxiety have put an enormous strain on operational processes and systems. Nonetheless, firms that had outsourcing services in place have fared better than others. Most of our outsourcing clients report that it’s largely been business as usual from an operational perspective. For others, the question of whether and what to outsource has taken on a new urgency. At SS&C Advent, we have continued to field inquiries from firms that are evaluating technology solutions and providers, pretty much at the same pace as before the pandemic hit, but with a notable uptick in interest in technology hosting

In the past, discussions of outsourcing revolved largely around cost considerations. Client firms are still interested in reducing operational overhead. Increasingly, however, they are seeing the value of having experts:

  • Manage and monitor automated processes, ensuring systems are running optimally
  • Run specialized tasks like corporate actions processing so that operations and firm admins can help teams focus on clients

Not only does outsourcing reduce the need for in-house resources to handle routine and often tedious tasks, but it also gives firms the ability to scale up or down as business demands, along with the agility to expand into different fund types, strategies and geographies, with more focus on clients.

The panel also addressed the growing variety of services that investment managers can now assign to third-party providers. This is a reflection of the evolution of outsourcing from a fairly rigid and narrow offering to a broader, more flexible and customizable set of solutions and services. Firms can now be very specific about the areas and functions where they want help, for example, ranges across a spectrum from software hosting and maintenance to full business process outsourcing. Business continuity is often an afterthought when firms consider outsourcing – but the pandemic has brought it to the forefront. The uncertainty of when and how firms will return to their offices is bound to drive demand for anytime, anywhere access to the critical systems and services firms depend on.

SS&C Advent’s award-winning Geneva platform is now available as a managed service through Advent Outsourcing Services, along with an ecosystem of complementary solutions and a customizable menu of operational services. If the prospect of indefinite remote work has you rethinking your operations, that’s reason enough for a serious conversation about outsourcing.