I attended the FSO Knowledge Exchange “5th Annual Asset Management Industry Forum” event in December last and was lucky enough to be asked to contribute as a speaker on the panel discussion “Expert Perspective: Best practices in data management outsourcing“.
The core thread of the discussion centered on the criticality of enterprise data management to investment management processes in front, mid and back-office. This panel also explored how outsourcing data management can be used to generate a sustainable competitive advantage in key areas such as research, analytics, risk management, compliance, investment performance measurement and client reporting.
Some of the discussions themes for the panel were:
- What challenges and opportunities do you see in your EDM strategy in the current environment?
- Which parts of your current EDM strategy do you see as the best candidates for outsourcing?
- What makes a good outsourcing relationship work?
- One of the bigger challenges for organizations that outsource back/middle office is the loss of the data management platform to the outsourcer – how do you now support the front-office?
- The biggest concern with any outsource process is loss of control – how do you deal with this?
- How can outsourcing data management be used to generate sustainable competitive advantage and how do you measure the ROI of such an initiative?
- How do you see upcoming regulatory requirements impacting the outsourcing of data management?
A key theme from the floor was whether outsourcing data management led to a loss of control – the overwhelming response was that if managed badly, the process would lead to the feared loss of control, but with the right partner in place and with a true partnership oriented approach to working together there was no reason that any control would be lost, in fact the consensus was that such an arrangement would actually put many asset managers back in control of their data.
Since the event had a strong ‘outsource’ slant – a recurring theme throughout the day centered on how to achieve a true partnership with your outsource vendor – the successful relationships identified all had shared risk and reward and flexibility in approach to service level specifications – with regular service reviews and open dialog.
The following is a quick video interview I gave to FSOkx after the event. I have some further video content of the panel discussion which I hope to post soon.
BTW FSO have an interesting webinar on March 9th which has a very similar theme to a post I made recently, and finally they also have an event in the UK in April – “The 2nd Annual Investment Management Industry Transformation and Outsourcing Strategies Forum“.
