Investment firms today are well aware of the benefits outsourcing can bring to their operations – decreased costs, enhanced risk and compliance practices, and greater agility in scaling, just to name a few.
Despite these potential advantages, trusting a third-party provider to complete critical functions for your firm is a significant decision, and firms should be thoughtful in how they go about forming such partnerships.
Even if you choose to outsource with an existing vendor, it is critical to do due diligence to validate or revalidate the provider’s risk, security, and regulatory practices.
And, to ensure you’re engaging with an outsourcing provider that is committed to a successful, long-term partnership, due diligence shouldn’t end there. There are other items to be on the lookout for to make sure the provider’s operations, approach, and objectives are aligned with your firm and its strategic vision.
What to Look for in an Outsourcing Provider
To help you determine whether your potential vendor is up to the task, we’ve compiled a list of questions to consider when looking for an outsourcing provider:
Investment in Outsourcing Teams, Size, and Tenure
Begin by assessing the vendor's outsourcing operations. What is the organization’s investment in this group? How many people do they employ in this department, and what is their tenure?
Outsourcing Infrastructure: Reliable Systems, Processes, and Technology
Next, evaluate the infrastructure and methodologies that back the vendor’s outsourcing team. Does the team have the systems and technology they need to perform their roles as efficiently and effectively as possible?
Transparent Pricing Structure
Before committing to an outsourcing solution, make sure you thoroughly understand the offering’s pricing structure. Does the price involve fixed fees, hourly charges, or performance-based incentives?
Efficient Onboarding
Before partnering, discuss the onboarding process with your potential vendor. What are the steps for getting the outsourced team up to speed on processes and regulatory requirements? What does each phase of the process look like, and how long will it take?
Ongoing, Open Communication
Regular communication is essential for maintaining a strong partnership and ensuring an outsourcing provider meets your firm’s expectations. On what cadence can you expect to check in with or receive updates from the vendor? Do they foster open lines of communication outside of check-ins in case your firm has questions or needs assistance?
Experts Who Know the Subject Matter – And Your Business
One key benefit of working with an outsourced provider is access to their subject matter expertise. Before choosing a provider, learn about their experience with firms of similar sizes, strategies, and challenges and whether they can apply this expertise in the context of your business.
Scalability and Adaptability
Choose a provider that has the flexibility and scalability to grow and evolve with the firm. To do this, ask about the breadth and depth of the vendor’s outsourcing offerings and make sure it can accommodate your firm’s needs in the face of changing market conditions or regulations.
Industry Reputation
A provider’s reputation in the industry tells a lot about what working with that vendor will likely be like. What is the provider’s industry reputation? What role do their services play in the success of their existing clients?
Cultural Alignment
An outsourced team should feel and act like an extension of the firm’s investment operations. What is the culture of the vendor’s teams? Is it a good fit for your firm?
Building a Long-Term Partnership for Growth
Choosing the right outsourcing provider is a critical decision that can significantly impact your firm's operations and overall success. By conducting thorough due diligence and carefully evaluating potential partners based on these criteria, you can find a trustworthy, experienced team that understands your unique business needs and strategic goals.
The SS&C Advantage: Partnering for Your Success
For over 30 years, investment firms across the globe have trusted SS&C experts to provide comprehensive outsourcing solutions designed to meet their specific needs.
We believe in fostering a collaborative environment where open communication, cultural alignment, and continuous improvement are paramount.
We are committed to becoming a true extension of your investment operations, helping you achieve your strategic objectives and navigate the ever-changing market landscape with confidence.
Dive deeper into the criteria discussed in this blog and discover more secrets to successful outsourcing in our comprehensive guide, Partnering for Success: The Art of Strategic Outsourcing. Or contact us to learn more about how SS&C can enhance your investment operations with outsourcing.
