Remember Your Keys When Outsourcing

Dave Allen

Senior Director, Consulting

Dave is a vastly experienced program and implementation manager with 25-plus years of experience delivering solutions for investment management and financial institutions. He brings significant expertise on strategy, search and selection, and delivery across front-office, risk, outsourcing, and data management functions. He is adept at defining and delivering business and technical strategies for front-, middle-, and back-office functions, including extensive experience in developing program plans and building program teams, to deliver solutions covering all investment processes, asset classes, and delivery of robust operating models.

Before joining Cutter, Dave served as a director at Reformis, a Deloitte company, working on outsourcing initiatives for key investment management clients and outsourcing providers. He also worked with key wealth management clients to define strategic direction for next-generation investment platforms and delivered key data management strategies for a number of clients. Dave is DCAM accredited.

Chanelle Crabtree

Consulting Principal – Investment Operations and Outsourcing

Chanelle Crabtree has extensive experience consulting for the asset management industry in Australia for the past 20 years. Chanelle has considerable knowledge and expertise in investment management, outsourcing, and the development of operational models that support the investment management lifecycle. Chanelle leads Cutter Associates’ Investment Operations and Outsourcing practice, and oversees Cutter’s Australia office. She has decades of experience working for investment management firms, custodians, and consulting firms, in roles that included middle-/back-office operational, business analyst, project management, consulting, and senior management. She has a deep understanding of investment management, covering the operational, governance, and system requirements to support all types of clients, products, and asset classes.

A former Director at Deloitte, Chanelle led key engagements, particularly for complex clients with diverse asset classes, covering target operating model design, sourcing, and implementation. Prior to Deloitte, Chanelle was a Lead Consultant at Morse Consulting Pty Limited, where she led various engagements that covered target operating model design, sourcing of custodians/systems, and implementations with investment managers and superannuation clients.

Jun 06, 2024

Keys, phone, security pass … I always need to remember these three things when I’m leaving the house in the morning (because if I forget any one of them, it’s a real pain). The same can be said of operational readiness as part of outsourcing programs.

Cutter consultants have taken part in many outsourcing initiatives, during which we have found that firms should not overlook the following three key items to ensure they achieve a smooth transition into production:

1. Don't underestimate the value of implementing a robust oversight model.

An effective and robust oversight model plays a critical role in providing the right level of governance and accountability when you’re not involved in the details of day-to-day operations.

It’s important that both parties establish a clear understanding of the model and reach full agreement ahead of any service transition. This will get the partnership off to the best possible start.

Do not underestimate the effort needed to define and establish the model.

Remember to include the following:

A definition of specific roles and responsibilities
Communications: How data and issues will be communicated with clearly defined escalation paths.
Resources: The resources that you’ll need to retain to execute the oversight model (often your expert resources).
SLA, KPI, and dashboard reporting.
Document the new business processes, including error handling.
Remember this is a partnership: Ensure both parties are in total agreement with the model and understand the need to continuously review the model as you progress through your partnership.
Make sure each business unit is signed up to the model: The program team should not approve the model on behalf of the business.

See our infographic, 5 Keys to Successful Outsourcing.

2. Don’t forget to define a clear communications plan

Your communications plan should cover both internal and external communications and deliver coordinated, consistent, and targeted messaging to different audiences and stakeholders. Be sure your plan identifies each group, and decide the level of messaging that each group needs to receive with sufficient time to adapt their model.

Send the right level of information to each group to avoid information overload.

Remember to cover the following:

Define your different audiences and their information requirements
Define when and how often you will communicate
Detail the different communication channels you will utilize
Solicit feedback to improve your plan. Are you providing enough information? Too much? Is the frequency correct?

3. Don’t lose control of your data

This area often is where it’s assumed your supplier has a robust data governance framework. As part of your operational readiness, however, you need to ensure that you’ve clearly defined roles and responsibilities.

Who are the data product owners for each data domain (e.g., prices)?
How are data quality and timeliness measured?
Is the process for adhering to data regulations, such as GDPR, clearly defined and tested?
Has the process and reporting of data breaches been documented? Are the responsibilities clear?
With business requirements around data constantly changing and expanding, has the change management process been agreed upon?

Consider Your Keys

Outsourcing initiatives are often complex and multi-phased. Planning your firm’s operational readiness activities will help ensure both a smooth transition and the start of a successful relationship with your supplier.

The Cutter Consulting team has direct experience in helping asset managers navigate outsourcing challenges. To learn more, or speak with a consultant, contact us at [email protected].