Selecting the Right IT Managed Service Provider the FinServ Way

Are you happy with your IT MSP? Many funds are not. Selecting the right IT MSP is not something you should keep putting off. Learn how FinServ helps its clients find the right IT provider for their unique needs.

Managing your IT infrastructure touches every team member and can create significant issues if not handled effectively. From extensive downtime to user frustration having an IT team that does not act as a business partner can hurt your whole fund.
FinServ completed an IT MSP Vendor Selection for one of our Private Equity Fund clients experiencing these exact issues. When the head of the fund could not access his systems during the pandemic, and their service provider had let the problem sit for over 24 hours, the fund decided a change had to be made.
The client was already aware of FinServ’s Vendor Selection methodology, as a few months earlier, we helped them select a new Third-Party Fund Administrator.

FinServ’s Vendor Selection methodology ensures that our clients select the right service provider for their unique requirements. Our comprehensive approach includes three stages of selection.

 

Phase 1 – Initiate

FinServ works with our client to inventory/collect all essential documentation and support for the new vendor culminating in a detailed set of user requirements. FinServ leverages our functions of an IT MSP to reconcile all possible functions to ensure all possible services are covered. Getting from a long list of vendors to a shortlist based on a detailed Request for Information (“RFI”).

Phase 2 – Assess

At the core of our selection approach, we use a 35-Page RFP including over 320 detailed questions. This level of detail ensures that the vendor provides the services and support in a way that meets each client’s requirements. Every client has their own way of doing business, and this approach ensures that the vendor that best fits that model is selected. The key to this stage is FinServ’s team with unparalleled attention to detail combs through the provider’s documentation and answers. It creates a qualitative and quantitative scoring that investors and auditors call world-class.

 

Phase 3 – Recommend

In the final stage of our selection process, we use scripted demos, which force each vendor to show, not just tell us, how they address the client’s most complex challenges. It is in this step that the right vendor rises to the top. Most salespeople hate this step because they know that often they want to stretch the truth about their systems. The right vendor can show how it is done to seal the win. In our final step, we conduct comprehensive reference checks that often uncover issues that may not disqualify a vendor but help the client with crucial advice as they move forward with the winner. The final step is a recommendation deck that summarizes all the detailed work, including the cost analysis across the finalist vendors supporting the client’s final selection. Many clients have used this document to show potential investors the quality of diligence in selecting a key service provider.

 

Beyond the Methodology

The process is key to making the right choice, but more important is ensuring that you focus on the essential areas these service providers offer. Technology is constantly evolving, be sure there is a focus on what is needed today and in the near term to meet your firm goals and requirements.

FinServ makes it our business to always stay on top of the latest requirements from regulatory agencies like the SEC and the latest technologies that the best providers are using.

Your IT Managed Service Provider (“MSP”) typically handles 2 to 3 of the most critical aspects of your business:

1) Cyber-Security & Risk Management

2) Monitoring & Management of IT Infrastructure

And for funds that have chosen not to keep IT resources in-house.

3) Service Desk / Desktop Support for Users / Company

 

1) Cyber-Security & Risk Management

With the war in Ukraine and the increased likelihood of focused cyber-attacks, there has never been a more critical time for a financial institution to ensure that they have the best possible risk management and cyber security coverage possible.
The offerings from the best IT MSPs have changed drastically over the past few years as the technology for cyber security and risk management has been forced to evolve as quickly as the sophistication of attacks.

The Not So Obvious Requirements Matter Most
One of the nuanced aspects of these services is less about your direct protection and more about how communications about potential IT security issues are raised. Our clients desire to limit the noise created by non-critical communications, so only the most critical issues are escalated for review. Some vendors have more advanced issue monitoring and alert systems that use rules and triggers to raise only the most important messages to clients, limiting “boy who cried wolf” scenarios.
The best vendors also proactively provide webinars and training for your employees to stay on top of the latest attack approaches. A knowledgeable team is your best defense against constantly evolving and changing cyber threats.

 

2) Monitoring & Management of IT Infrastructure

Has your network ever gone down, leaving you unable to work? Have any of your remote employees ever lost access to your network? Has a crucial executive of your firm ever been frustrated by not getting the IT support they need?
If the answer to those questions was yes, you probably don’t have the right service provider with the proper setup and response management systems. The best IT MSPs have formulated approaches that ensure redundancy and backup of essential systems, so you never have downtime during regular business hours. Similarly, they have all created world-class service systems that support intelligent routing of critical issues with complete status transparency. Essential issues are solved in minutes, not hours or days. When they take longer, your support staff can see real-time updates on 1) who is working on the issue, 2) when it will be resolved, and 3) all the latest activity and communications to the key executive.

 

3) Service Desk / Desktop Support for Users / Company

If a key executive’s camera is suddenly not working and they have a full day of Zoom or Teams calls ahead, not having someone come to their desk immediately to fix the issue can be a significant problem.
Alternative asset management firms often choose not to hire a CTO or desktop support staff. With predominantly SaaS-based applications, the need for in-house physical support has been dramatically reduced. Many smaller funds prefer to rely on an outsourced IT support person along with a part-time Virtual CTOs (“vCTOs”) to focus on complex technology strategy. Separately, while remote desktop support can work for many issues, in-person physical support is still something many funds require. While many IT MSP Vendors have moved away from offering this service, it is still an essential requirement for many funds.

If you are one of these funds, FinServ has you covered. We know which IT MSPs truly champion this type of support and which vendors only give it lip service. Additionally, If you are unhappy with any existing onsite IT support you are receiving today, we can help you move to a vendor that will cover all of your needs.

 

Conclusion

The IT MSP Vendor space is filled with many sub-par providers that cannot cover the mission-critical services that alternative asset managers require. In a world where one mistake could cost your firm its reputation or paralyze your operations, it seems crazy to leave this essential operational risk under-serviced and exposed.
There is no one-size-fits-all vendor. Many of the best IT MSPs have focused their services in certain areas, so choosing the right partner that fits your firm’s unique requirements is essential. FinServ’s knowledge of the marketplace and our rigorous selection methodology ensure you get the provider and services your fund requires.

To learn more about FinServ Consulting’s services: info@finservconsulting.com or (646) 603-3799.

About FinServ Consulting

FinServ Consulting is an independent, experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks, and industry service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle, and back-office. FinServ provides managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience working with the world’s largest and most complex asset management firms and global banks.

Vendor Management Systems Take Center Stage

If the pandemic has taught businesses anything, it is that they need to plan for the unexpected and ensure they have a robust, effective and comprehensive vendor management system. Such a system is not a “nice to have” but the best way to keep track of the myriad of service providers and the detailed work that needs to go into this effort.

No matter the fund or company size, vendor management systems are an integral part of the smooth running of a firm. Recently, FinServ Consulting implemented a vendor management system (VMS) for an alternative asset manager, helping it to customize the system. Based on this experience, FinServ identified six key elements of a top vendor management system.

#6 – Tickler System 

Top of the list of “must-haves” is the ability to trigger events automatically. This is at the heart of any VMS and should handle all the rules and actions around contract renewals. Part of this will be automatically sending out vendor risk questionnaires internally to determine if a vendor is performing well and externally to the vendor to ensure its own internal processes, risk assessments, and business continuity plans are robust enough to support the fund. A good VMS will handle all these notices automatically and allow the firm to customize what it needs to do and when.

The best systems provide the functionality to support nested logic, workflow-based action step processes, multiple forms of notification, and automated updates to the data in the system.

Whatever the system, it should ensure the various components can be set up by the end-user with little or no technical expertise through user-friendly user interfaces. The system must also have a dynamic messaging capability, so emails or texts sent to the user and/or vendor provide contextual information needed to understand the details of the alert and be able to act on it in a timely fashion.

#5 – Business Continuity Plans

The primary focus of a VMS is on the vendors. It should be able to produce a business continuity plan and scrutinize its response to events it can foresee as well as the unknown unknowns. For example, if it is impossible to be physically in the office, the plan should outline the steps needed to ensure the smooth functioning of the fund, including naming key members of the team and what to do it they are incapacitated physically or because of technical problems.

 

The best vendor management systems have all the key pieces of a rigorous business continuity plan. This means a firm’s plan can be created on the fly each time a new vendor is added, updated, or changed when something significant happens within the business.

It should also provide a detailed system and organization controls (SOC) II level questionnaires and links to detailed analysis of all aspects of a vendor’s risk assessments and pull in details of the vendor’s responses to automated surveys. This allows the operations team and/or the chief information security officer (CISO) if a fund has one to document their own findings and risk mitigation strategies for anything flagged during the risk vetting process.

Capturing incidents in the vendor’s history that may require legal or other actions by operations or compliance teams is another essential related element.

#4 – Managing Costs

A vendor management system is only as good as the quality of the data put into it. If the system uses planned and actual spending from an enterprise resource planning and/or general ledger system, it will give a powerful view of spending by vendor.

One of FinServ’s clients took this a step further by tracking spending by employee for certain subscriptions. This gave a fuller picture of overall spending at the individual employee/trader level. With this data, the financial and operational teams could make decisions quickly on spending allocations in key areas and where spending on vendors was redundant or unnecessary.

A good vendor management system will offer application programming interfaces that make it easier for technology teams to interact with other systems such as the general ledger, customer relationship management, or document management systems. When all these systems talk to each other and automatically pass data back and forth, there is no need to have manual entry. This means a firm can ensure all its data are in sync, avoiding discrepancies.

#3 – Contract Management

Most legal departments are overwhelmed with managing negotiations and deal-related matters. The contract management component of a good VMS allows a legal team to coordinate with other key areas such as the business owner for the vendor, as well as the compliance and finance teams.

Contracts can then pass through risk management and legal processes in a timely and efficient manner. With key inquiries sent to vendors – requests for documents or other information – the vendor management system ensures the contract process goes smoothly. Prior to the end of a contract, the tickler feature automates the notification for vendors and the internal team responsible.

The vendor management system should be able to link to the firm’s enterprise-level document management system to make sure a “golden copy” of each contract is kept in one place only. By linking to the document management system, the firm centralizes the security of these documents, ensuring permissions only for the people who should have rights to see or update these documents. This is where a good vendor management system covers various aspects of the due diligence and overall compliance processes.

#2 – Compliance

Ensuring vendors are compliant with key items such as certificates of insurance, non-disclosure agreements (NDAs) and SOC II is critical for investors, auditors and regulators. The vendor management system should simplify and automate the process of collecting and managing these documents as well as provide integration with other key systems. The system should track not only the receipt of any documents but also expiration dates that require a new document.

One of the more sophisticated and user-friendly features of a system FinServ Consulting implemented for one of its clients was the ability to reveal certain parts of the system only when necessary. For example, only when a vendor required a certificate of insurance would it show the section of the document tab for loading the COI. This made it much clearer and easier for the client’s administrative team to manage the documents it needed to collect from each vendor.

#1 – Onboarding Challenges

How a vendor is onboarded is another area where a vendor management system is essential. It can help streamline processes, identifying who is able to add vendors and what controls, assurances, and guarantees are needed for each type of vendor.

For example, during the vendor onboarding process, the operations due diligence team answered certain key questions through a wizard. The responses determined which document sections would show for the administrators who needed to collect the documents. When all the required documents were collected, it notified the vendor sponsor that its vendor was up to date and ready to go live. The system also notified legal that it should engage the vendor to finalize the contracts while letting all interested parties know that a new vendor was now live in the system without the need for any manual emails or intervention.

Conclusion

Vendor management systems have become an essential system for all alternative asset managers. An effective system must be able to provide a place to store essential data and offer user-friendly support to investor relations, operations, legal, and compliance teams so they enjoy working with the system. When all these pieces are in place, it makes working on due diligence questionnaires and regulatory reviews much easier and enables the firm to avoid last minute panics when trying to meet deadlines.

FinServ Consulting has the systems integration expertise, experience, and depth of knowledge to create vendor management capabilities with nearly any platform including VMS specific systems like Onspring to broader platforms like Salesforce and many others. It understands alternative firms and how a well-designed vendor management system can help limit exposure risks and ensure a firm is prepared for whatever the future may bring.

To learn more about how FinServ Consulting can help your firm build and integrate a new vendor management system, or customize one you already have, contact us at info@finservconsulting.com or (646) 603-3799.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

What You Need To Consider When Choosing A New OMS

Undergoing technological change or implementing a new system is not something to be taken lightly in ordinary market environments, much less during a time of extreme or abnormal market volatility. If your fund or organization is planning to implement a new OMS or replace a legacy OMS, there are several things you should consider.

From a business and investment standpoint, there are the usual key considerations, including: the need for integrated OMS/EMS functionality, whether ease of use important, ability to customize workflows and if there is a desire for extensive client/marketplace connectivity. From an operational perspective, one must also consider other non-functional items like data migration (and how easy it is to implement), the software support model, modularity and future expandability.

​The aforementioned list only touches the surface; the overarching themes involve automation, workflows, analytics and decision-support tools. In fact, in a recent Refinitiv/Greenwich Associates paper, traders ranked an EMS as the most impactful technology in the short-term.

 

 

OMS vs EMS

In general, hedge funds treat the Portfolio Manager (PM) and Trader workflows as a single unit, whereas traditional asset managers may have additional bifurcation between roles and responsibilities. At a hedge fund where the PM sends orders via email/chat/voice to a trader to execute, they may want a single, integrated OEMS. On the other hand, an asset manager often has multiple PMs who route orders to a centralized trading desk. In this case, the institution may want a solution with specific standalone OMS and EMS functionality, in order to access best-of-breed functionality.

The trend in the marketplace for a while has been OMS vendors integrating additional trading functionality by buying or building EMS solutions. This results in the ability to capture and allocate client orders while also capturing execution details to help the firms comply with regulatory requirements. Additionally, this allows them to market themselves as an all-in-one solution and would insulate the client from having to integrate yet another vendor into their technology stack.

 

Source: Charles River Development

 

Ease of Use

Being able to get your operations, back office and front office users onboarded and using the software as quickly as possible can be a heady concern for most clients. In theory, this sounds simple, but many legacy OMS were designed with a single asset class in mind. If your client is now multi-asset, multi-strategy and trading a variety of instruments in volume, it’s even more imperative that a system be easy to use and operate as one cohesive platform.

A modern interface with intuitive workflows can be a competitive advantage especially if the fund’s current OMS platform is antiquated and requires, in a worst case scenario, dual entry or swivel-chairing in order to execute and fill an order. (Swivel chairing involves a PM creating orders/allocations in an OMS and then sending them over to trader for execution in an EMS).

 

Ease of Customization

A vendor’s product team always has to find the right balance of customization and the notion of a standard offering for the client. However, in this day and age where customizability is king, most vendors are client-driven and willing to bend over backwards for their clients. Enfusion Systems, whose product features weekly upgrades, has marketed their product as being easily customized. In a recent implementation with an asset manager, Enfusion agreed on development of specific functionalities within their platform that would position them well for the changing OEMS marketplace. The client agreed on an OMS implementation, while also using Enfusion’s Services team for reconciliations (the client still kept some functionality in-house, like collateral management).

 

Client/Marketplace Connectivity

Most multi-strategy funds that trade a wide breadth of products across different asset classes and venues will always be excited at the prospect of having a vendor whose product comes pre-packaged with existing API connectivity to brokers, venues and marketplaces. Many clients have a baseline expectation of connectivity with a full suite of partners across the spectrum of asset classes. If this is not currently in the vendor’s repertoire, the expectation is that connecting to new trading venues and brokers would be trivial.

 

Data Migration

One of the most underestimated Issues that can be the source of delays for most implementations is data migration. What seems like a simple exercise to port accounting/trading data from the client’s old system to the new system can lay bare a client’s unreconciled data and inconsistencies between trading data and official books and records. Having clean, reconciled source data from the client that can be matched to the client’s custodian or fund administrator sounds simple. In practice, many things can go wrong and be a source of delays. Finding a vendor who has experience successfully migrating trade data, for funds that are similar to their current structure, in a timely manner is the holy grail.

 

Our Implementation Project with Enfusion and an Asset Manager

FinServ is currently engaged with an institutional asset manager on the implementation of Enfusion’s comprehensive front-to-back trading software product. The asset manager is looking to implement a new front-to-back office system for one of their businesses. Because their current portfolio management system is a legacy product, the product features were outdated and users found the workflows to be inefficient. By implementing a new portfolio and order management system, they would be able to control service levels and more importantly, they would be able to custom develop functionality that match their growing business needs.

After an extensive vendor selection process, the asset manager chose Enfusion Systems. Enfusion was able to make their choice easy due to their cloud-based solution, which provides integrated order and execution management as well as middle office and IBOR services. Although not the focus of this article, the asset manager was also looking to outsource part of their back office to Enfusion’s Services team. Using one vendor for both OMS and back office was one of the key drivers behind their decision. In addition, having a single data model also provided a golden copy for data for all users across all functions. Since the asset manager’s business model involved trading a diverse set of product types and made use of heavy derivatives, Enfusion’s ability to handle multiple asset classes also made sense.

Considerations

Because implementing a new OMS was such a large effort, the timelines for launching and migrating an initial account and eventually the entire business spanned much longer than a year. A decision was made to have a phased approach, where specific sets of strategies and funds would be moved to the new platform in stages.

In order to alleviate some concern that the execution tools, order management workflows and trade compliance functionality would not be replicated completely (due to extensive in-house custom enhancements over the years), Enfusion worked closely with the client to address these items.

From the client’s standpoint, adding a new system would also add additional complexity – additional integration points, extra feeds into and out of their books and records system, the necessity to have Trading operate out of multiple platforms simultaneously, a bifurcation of the client’s Operations team to handle both sets of systems and lastly, having PMs manage portfolios and strategies across multiple systems during the phased implementation.

“Enfusion and FinServ worked side-by-side during this project – we ran implementations, gathered clients’ requirements and dived deep into the use cases. Both parties were truly collaborative and this enabled accountability with the client. FinServ has tremendous project management experience and it was great partnering with them.”

– Brad Flax, VP of Business Development at Enfusion

Summary

If you are interested in learning more about our current and past Enfusion implementations, please reach out to FinServ. Throughout our 15 years of existence, we have proven that our deep industry knowledge combined with our project management and overall best practice methodologies can be an asset to your organization. To further continue the conversation or to discuss more of FinServ’s capabilities, please contact FinServ at info@finservconsulting.com or give us a call at (646) 603-3799.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

HCM for Asset Managers: Find the Right Solution for Your Firm

An HCM solution is an integrated system that automates HR functions combined with finance, planning, and analytics and allows for employee self-service capabilities, thereby reducing labor costs, optimizing business processes, and increasing efficiency. Companies that transition from manual processes and disparate legacy systems to modern, cohesive digital workforce management technologies can realize up to 15-25% cost savings related to HR and IT spend.

Most current HCM solutions are offered as a cloud-based, SaaS delivery model and include modules for payroll, HR, time and labor management, and recruitment. This type of solution does not require an expensive hardware investment and constantly updates software to the latest version while maintaining secure backups. These systems are monitored at all times and provide the utmost reliability. An added plus for asset managers is that the solutions can be customized to suit the size of any company and grow as the organization grows.

At FinServ Consulting, we have experience working with firms of various sizes in the alternative asset management industry to select, implement, and/or upgrade their HCM systems. While there are numerous benefits of having one comprehensive, integrated HCM, there are other options available on the market such as lite solutions that meet basic needs without all the added features that may not be necessary for some firms, as well as point solutions that cater to the industry’s unique needs, like complicated compensation structures. FinServ can help assess your company’s specific requirements to identify what to be aware of in terms of missing features, implementation issues, and cost-benefit analysis of different HCM options.

 

Benefits of a Consolidated HCM

Attract and Grow Talent

Recruiting top talent and keeping them engaged is no longer just HR’s responsibility—talent objectives can have a significant financial impact on growing a financial services business. Implementing a new HCM system can help enhance performance management processes to eliminate bureaucracy and encourage meaningful conversations between managers and employees focused on performance improvement. In addition, better compensation data and visibility of top talent allow managers to make more well-informed decisions regarding performance and rewards.

Some clients in the alternative asset management space that FinServ has previously worked with used manual spreadsheets to manage staff performance, as well as recruiting and other functions in some cases. However, by opting for a consolidated HCM system, these organizations were able to use more sophisticated workflows to provide employees with more meaningful feedback. Also, they could track and monitor operational outcomes and staff development across the company to ensure a payback from their HCM investment.

Make Better Informed Decisions

Asset management firms in the current environment face increasing regulatory scrutiny, such as GDPR, AIFMD, and Form PF, and constantly evolving standards. In order to meet the new generation of demands, these companies need to make well-informed investment decisions with visibility into all business lines. However, this is a difficult task when the data required to deliver these insights is housed in disparate legacy systems with varying formats and level of detail. This is where having consolidated HCM comes in—a single system for finance, HR, planning, and analytics can offer the necessary foundation to gain better insights, save time on data aggregation, and proactively solve business problems. A digital solution of this type can help improve business margins, provide competitive differentiation, attract and retain customers, and identify lucrative areas for growth.

Harness the Power of Modern Data

Today’s financial companies have an unprecedented amount of valuable data across their organization. However, many are still not able to access this data due to isolated, unorganized, and inaccurate legacy systems. The data warehouses that are typically accessed by business intelligence tools to create reports or perform financial analyses hold data that was accurate at the time it was loaded and refreshed from legacy systems, resulting in a high likelihood that it is out-of-date and unreliable. As a result, financial services firms often turn to add-on custom software solutions to try and achieve real-time data extraction, but these products often produce further challenges because they require continuous maintenance to keep up with the changing needs of the business.

Implementing a contemporary, consolidated HCM system allows firms nimble access to the real-time data that is necessary for constantly changing business needs. These solutions include technologies, such as cloud computing, open APIs, artificial intelligence, and machine learning, that make insights transparent and accessible across lines of business.

Build Organizational Agility

Being agile is key to an asset manager’s long-term success and there are several factors at play in building organizational agility:

  • Adaptable: A flexible technology foundation is essential to be able to change organizational structures and processes in response to regularly shifting business needs.
  • Skilled: Financial services firms, among others, face a widening skill gap and must find ways to upskill their workforce.
  • Empowered: In order to perform at the highest potential to meet evolving consumer expectations and drive success, employees need full access to data to make business decisions.
  • In Control: The need for measurement and control goes hand in hand with agility and speed. Asset managers must measure more relevant KPIs to learn from what works and what doesn’t when it comes to new digital revenue streams.

There are common obstacles that firms must overcome to meet the guidelines above, including inflexible legacy technologies, bureaucratic organizational culture, and a lack of relevant employee skills. By using a comprehensive HCM solution to add intelligence to business tasks, financial firms can move past these challenges and employ integrated, real-time planning in order to build organizational agility and realize their digital growth aspirations.

 

Choose the Right Solution

As mentioned previously, there are many HCM offerings available on the market and it is important to select the right one to meet your firm’s unique needs. There are several factors to consider, such as the needs and priorities of the business, size of the firm, and desired metrics and reporting abilities. FinServ Consulting has experience working with asset management firms to identify and implement a suitable HCM solution. We can help you make the right decision and take full advantage of the capabilities and rewards that the new solution will provide.

 

Summary

If you are interested in establishing or improving your firm’s HCM platform, FinServ Consulting is the right partner to help you reach your firm’s strategic objectives.  Throughout our 15 years of existence, we have proven that our deep industry knowledge combined with our project management and overall best practice methodologies can be an asset to your organization. To further continue the conversation or to discuss more of FinServ’s capabilities, please contact us at info@finservconsulting.com or give us a call at (646) 603-3799.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

Controls Meet Cost Savings: Market Data Expense Management Systems

Global market data spend recently exceeded $30 billion per year1. In an increasingly data-driven investment world, market data spend is only expected to rise, as firms seek out new alpha-generating data sets to enhance returns. Additionally, quantitative investment strategies have never been more in vogue with investors; the literal arms race to find better, more powerful data sets is sometimes merely just a struggle to “Keep Up with the Joneses”.

Market data is a critical component of modern fund management; however, wrangling market data expenses has never been more important due to rising costs and increasing complexity. In this article, FinServ will cover:

  • Why is Market Data Expense Management Important?
  • What Makes Market Data Expense Management Hard?
  • What Technology Solutions are Available?
  • Complementary Solutions and Services
  • How FinServ Can Help

Why is Market Data Expense Management Important?

Market data is a Top 5 expense at most investment managers, but it is often the #1 headache. Although other expenses like employee compensation, real estate, and general technology spend reach similar (or greater) heights, market data expense management often lacks the same direct and consistent level of stewardship. Everyone wants to decrease market data expenses, even though they tend to be the least understood (e.g. complex contracts, metered services) and it is easy to pass the buck on ownership between technology, finance, operations, and the front-office. Strong, centralized control of the market data management process can help firms save millions by eliminating unused and underutilized services; however, even when market data has an organization’s focus, there are several inherent challenges with managing market data expenses without help.

What Makes Market Data Expense Management Hard?

Market data is incredibly costly and difficult to manage due to its complexity. Market data expense managers are tasked with providing structure to market data programs facing an ever-growing list of responsibilities and related challenges. These include managing a variety of execution-focused priorities, while also driving organizational change via strategic initiatives like optimizing data usage/flow and cutting out unnecessary costs. These activities include:

Expense Allocations & Invoice Reconciliation Controls:

  • Market data allocations are usually more complex than vanilla corporate expenses. A single invoice could get allocation to some combination of individuals, groups, departments, and/or strategy (e.g. fund AUM-based allocations).
  • This requires a clear understanding of the market data services and solutions currently in use, including an understanding of services purchased. How you pay matters as well; any soft dollar payments should be tightly managed along with appropriate firm compliance officers.
  • Due to the volume and complexity of market data vendor invoices, the invoice reconciliation process demands a strong technological solution to facilitate daily market data expense management.

Usage Management:

  • Keeping track of actual market data usage is required to get a handle of how to cut unnecessary costs. This includes knowing which applications use specific data, how it’s licensed, and when renewals will occur.
  • Market data usage and expense reports are required for the business to make informed decisions related to overall needs. This includes a mechanism to track usage and verify that it is in line with the original business objective.
  • Mitigate audit exposure as a firm and remediate any compliance breaches. Understand how the firm’s contracted capabilities compare with actual data usage. Determine if licenses exist for all services utilized across the organization?

Strategic Platform Management:

  • Review and implement industry best practices for market data expense management.
  • Align the overall strategy with the strategic initiatives of the business and technology teams.
  • How may the organization optimize market data consumption across the board to reduce costs?
  • How many data vendors are currently used?
  • Are any services duplicative/redundant?
  • Are there any unused/underutilized services?
  • Are there better platforms available for meeting corporate strategy?

What Technology Solutions are Available?

MDSL: Market Data Manager (MDM) and TRG: Financial Information Tracking System (FITS) are two of the leading market data expense management system providers in the financial services and asset management space. The overall landscape has been heavily influenced by private equity merger and acquisition activity. MDSL recently merged with Calero, a telecom expense vendor, and TRG acquired a third player in the market data expense marketplace called Screen: INFOmatch in 2019. Both MDSL and TRG aim to provide structure and clarity to manage firmwide market data, research, software and enterprise subscription spend on subscriptions to market data providers like Bloomberg, Reuters, and FactSet.

  • Contract Management and Centralized Inventory: Allows organizations to track, organize, and calculate costs related to market data vendors, contracts, products, and users. Contracts and licensing inventory details may be captured to create a centralized inventory of market data assets for use in invoicing and allocation.
  • Compliance Workflow: Compliance approval workflows may be leveraged to review soft and hard dollar eligible costs.
  • Invoicing Workflow, Reconciliation, and Allocation: Invoice processing becomes streamlined when matching against structured inventory records. Robust organizational structures may be accommodated to allocate to departments, groups, and/or individual users.

Complementary Solutions and Services

  • Managed Services: Both MDSL and TRG offer managed service offerings inclusive of contract maintenance, compliance reviews, and invoice reconciliations. If you are underwater with your current market data expense management process, consider leveraging managed services as part of an initial implementation.
  • Usage Monitoring and Control Products: MDSL: Access Compliance Engine (ACE) and TRG ResearchMonitor provide access controls and usage monitoring for subscription services, allowing you to reduce spend on underutilized services and directly ensure compliance with data access contracts/agreements.

How FinServ Can Help

Managing market data expense is often a headache for investment managers, but there are several leading marketplace solutions that help relieve the burden placed on market data managers. FinServ Consulting’s industry expertise and unparalleled track record of service for asset management clients makes us the right partner to help you select the right solution for your organization.

To learn more about FinServ Consulting’s services, please contact us at info@finservconsulting.com or (646) 603-3799.

1 Based on a Burton-Taylor Research Report.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

What You Need To Know About Uncleared Margin Rules (UMR)

Regulation around UMR came about as a response to the financial crisis of 2008-2009. One of the reforms that was recommended was the implementation of margin requirements for non-centrally cleared derivatives. The in-scope OTC derivatives include FX options, NDFs, physical FX forwards, swaptions and hedging trades.

The initial implementation of Variation Margin (VM) requirements was implemented in 2017, while Initial Margin (IM) requirements continue to be phased in until 2021. The new IM rules that are to be put into effect in 2020 and 2021 affect primarily smaller financial organizations, including buy-side participants. Note that UMR has been phased in since September 2016 in the US and March 2017 for remaining market participants.

The initial Phases affected the interdealer market and required execution/negotiation of new CSAs, custodial arrangements, eligible collateral schedules and account control agreements with counterparties/custodians.

The upcoming Phases will affect smaller insurance/banking groups and asset managers, who naturally have less experience with the new rule requirements and likely, fewer resources to help with implementation.

Unlike variation margin, which is based on the market value of trades, initial margin is a risk-based calculation. VM also happens to be a mature concept for most firms; IM, though, is new for most institutional investors because it includes custodians in addition to the trading parties.

 

Key Dates

Adherence to UMR has been on a phased approach thus far; in 2018, market regulators postponed the last two Phases (4 and 5) by one year. The Phase 4 compliance date was originally September 2018 and was moved to September 2020. The Phase 5 compliance date moved from September 2020 to September 2021.

The phased thresholds for UMR means that, with each Phase, more and more In-Scope Counterparties will be affected and has been the source of some consternation among market participants.

In addition to the notional thresholds, IM is required to be posted between counterparties where there is a consolidated threshold of $50mn USD or $50mn EUR. Thus, if the IM threshold is less than $50mn, no IM needs to be exchanged.

 

 

Biggest Challenges

There are four main challenges for market participants when it comes to compliance with UMR:

 

Solutions

The IM rules consist of the following tasks that need to be completed by a market participant:

  • Calculation of regulatory IM
  • Collateral segregation and rehypothecation requirements
  • Eligibility checks of collateral
  • Settling of collateral (on T+1 basis)
  • Threshold application (ie 50mn)

Because of this daunting list (many of which are operationally intensive), many participants have sought to outsource their adherence to the new guidelines.

But market solutions have been scarce; there are few all-in-one solutions; rather, a few vendors have capabilities in different facets of UMR

  • There were originally two market solutions: Margin Xchange and ISDA create
  • As of December 2018, neither had been released to market
  • As of September 2019, Margin Xchange ended their product after regulators cut the industry workload by ~90%
  • As of January 2019, ISDA create was launched and is free to the buyside
  • As of September 2019, 50 firms were on ISDA create; more than 160 other firms are testing the platform ahead of Phases 4 and 5.

 

Here’s a list of what a ‘typical’ hedge fund needs to do:

  • Assess which products are in-scope and calculate notional amounts
  • See if the notional threshold is applicable or not
  • See if the IM threshold is applicable or not
  • Re-negotiate all Credit Support Annexes
  • Calculate & Pledge IM and ensure it is held with Custodian Bank
  • Ensure no rehypothecation of collateral
  • Manage margin requirements: calculation, monitoring, segregation and reconciliation

Calculating IM

Calculation of IM is one of the more cumbersome requirements of the new rules. There are certain vendors who are licensed ISDA initial margin calculation service providers and can help with calculations.

Partial list of vendors who are licensed SIMM service providers

  • AcadiaSoft Risk Services Suite
  • Bloomberg
  • Calypso
  • Cassini Systems
  • CME
  • Clarus Financial
  • Lombard Risk
  • Murex
  • OpenGamma
  • Quantile Technologies
  • TriOptima

Initial Margin (IM) has to be calculated via one of two methods : the grid method or the SIMM method.

Unfortunately, there is no clear preferred method in that both methods are operationally burdensome. Each method has its pros and cons, which will require each market participant to perform a cost benefit analysis.

Here we will list out some key points for each method.

Grid Methodology – A standardized schedule included by regulators

  • Insufficient granularity of tenor buckets and product types
  • The grid methodology has a lack of clear guidance from regulators and as a result, inconsistent interpretation. As a result, it hasn’t been widely adopted.
  • The methodology seems simple, but results are difficult to compare between counterparties

SIMM Methodology

  • Thus far, all entities that have implemented regulatory IM have used SIMM
  • Takes into account offsetting risks
  • Use of a standardized model allows simpler comparison of margin amounts and results in fewer disputes among participants
  • Requires each counterparty to generate sensitivities for every trade – time consuming and requires huge amounts of market data
  • The only regulator-approved IM model

 

Summary

If you are facing any of these issues in complying with the UMR rules, please reach out to FinServ. Throughout our 15 years of existence, we have proven that our deep industry knowledge combined with our project management and overall best practice methodologies can be an asset to your organization. To further continue the conversation or to discuss more of FinServ’s capabilities, please contact FinServ at info@finservconsulting.com or give us a call at (646) 603-3799.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

Mountaineering Tips for a Black Mountain Implementation

Hiking up any formidable summit requires experience, expert guidance, and determination to succeed. Navigating a Black Mountain implementation is no different. It can be a challenging and complex experience for asset managers that are not prepared to embark on the journey.

What is Black Mountain?

Black Mountain is a best-in-class, industry-standard provider of highly configurable front- and middle-office software solutions for investment managers. Part of newly formed Allvue Systems, owned by Vista Equity Partners, Black Mountain is an innovative suite of solutions for portfolio management, trading, credit research, and direct lending. Investment firms utilize Black Mountain to streamline critical business processes that are at the heart of all front- and middle- office activities.

  • Research Management: Integrates deal pipeline, analyst commentary, and ongoing coverage with trading activity and portfolio exposures. Includes the ability to push Excel-based financial templates into Black Mountain for aggregate research analytics.
  • Trade Order Management: Streamlines order entry with broad asset class coverage including loans, bonds, municipal securities, equity, CDS, ABS, MBS, futures/options, swaps, repos, FX, and real estate. Easily accommodates data input controls, alerts, and custom portfolio allocation methodologies.
  • Portfolio Management: Dynamic dashboards, charts, and analytics are tied to trading activity for all supported asset classes. Additionally, 3rd party data sets can be incorporated into the system to provide robust reporting capabilities to meet changing company, market, and regulatory needs.
  • Compliance Management: Supports pre- and post-trade portfolio compliance via a powerful and robust compliance calculation engine.
  • Data Warehouse: Facilitates historical data capture and reporting requirements. Enterprise data management tools can be leveraged in the system to define data priority, conflict resolution, and alert users using rule-based data gap checks.

Source: Black Mountain Systems

What to Know Before Getting Started with a New Black Mountain Implementation

  • Get Help Early: Don’t assume that you only need help after a Black Mountain contract is signed and the implementation officially begins. There is valuable preparation work that can and should begin well ahead of any Black Mountain implementation. The clearer current and desired future state are defined (and documented) before involving the Allvue implementation team will only improve the quality of overall system design, reduce the risk of misinterpretation, and will save time/budget in the long-run.
  • Don’t Rush the Scoping Process: In a similar theme, resist the urge to “just get the implementation started”. Black Mountain implementations start with a handful of scoping sessions/workshops to formally outline the core project scope, assumptions, and risks in the form of a Scope Document. While additional requirements gathering will take place in an agile fashion throughout the project, the initial Scope Document will govern your initial project budget. It is easy to misinterpret what you are getting if you are not familiar with Black Mountain and it is important to manage expectations on all sides.
  • Out-of-the-Box Solutions Still Need Initial Configuration: Every Black Mountain client is different. Even though Black Mountain has a treasure trove of standard, out-of-the-box features and functions, much of it still requires configuration before being usable in a production environment.
  • You Need to Understand Your Data: Garbage in really is garbage out. Not only does data need to be clean before being consumed by Black Mountain, but you need to be proactive about how to resolve data conflicts. This includes understanding data origination, priority, and downstream reporting dependencies. If the same field can come from multiple sources, which source should be used and in what scenarios? Do you need an additional Security Master solution on top of your Black Mountain implementation?
  • The More You Know, the More You Will Want: As your team gets more familiar with the power of the Black Mountain platform, get ready for new ideas and user requests. Setting aside a reasonable budget to handle new requests will help you address these requests and improve user satisfaction/adoption.
  • Aim to Leverage 3rd Party BI Tools for Reporting: Consider leveraging 3RD party BI tools like Microsoft Power BI or Tableau via Black Mountain APIs in order to self-service a larger portion of your dashboard/reporting needs via direct systematic access to your data stored in Black Mountain.

How FinServ Can Help

  • Ability to Bridge the Gap: The FinServ team is made up of talented consultants that possess both a deep level of industry knowledge and technical expertise. Coupled with the team’s Black Mountain platform knowledge, FinServ is able to help clients bridge the knowledge gap with the Allvue implementation team to streamline the implementation process by calling out potential design limitations and clearly articulating complex requirements using cross-functional workflows, UI/UX wireframes, and by creating detailed end-user documentation.
  • Project/Program Management: FinServ provides best-in-class project management staff that are experts in managing scope change requests, issue logs, preparing executive level presentations, and detailed weekly status reports. These activities together ensure that all levels of the client organization are kept up-to-date on the most critical aspects of the project progress and that issues are escalated proactively.
  • Business Analysis, Data Analysis, and Documentation: FinServ skilled business analysts can support clients by providing hands-on project delivery activities like documenting requirements, performing data mapping, testing, and creating formal system documentation that otherwise would take you away from your day job.
  • Full-time, Onsite Consultants with White Glove Service: FinServ can provide full-time, onsite consultants to support a Black Mountain implementation. This level of support ensures that any issues that arise are immediately reviewed and often resolved immediately. For any issues that cannot be resolved immediately, detailed resolution requirements are documented and provided to the vendor for immediate remediation, testing, and verification back out to the user.

The Bottom Line

Black Mountain is a robust, powerful platform for investment managers, but getting started with a Black Mountain implementation can be a daunting task if you don’t prepare ahead and don’t have the right adviser supporting you on your journey. FinServ Consulting’s Black Mountain expertise and unparalleled track record of service for asset management clients makes us the right partner for any Black Mountain project.

To learn more about FinServ Consulting’s services, please contact us at info@finservconsulting.com or (646) 603-3799.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

Implementing Workday – What Your IT Staff Can Expect

If you are considering implementing Workday for your Human Capital Management (HCM) and / or Financial system needs, then you are likely aware that Workday is a Software as a Service (SaaS) application – centrally hosted and consumed over the Internet as a Service. The SaaS model will save your organization time and money on the maintenance tasks typically associated with an on-premise software installation. What it won’t do is absolve your IT staff from all Workday responsibilities, rather your team’s responsibilities will shift.  Depending on your organizational structure, this role can stay solely within IT or it can be split between IT and the Business.

Let’s review the traditional on-premise software model and how your staff supported it.

 

On-Premise Software Support Responsibilities
  • Procure, install and maintain hardware such as Application Servers, Web Servers and Database Servers
  • Maintain multiple environments for Production, Development and Testing
  • Set up redundant environments for Disaster Recovery / Business Continuity purposes
  • Monitor hardware and environment health
  • Install and configure the Application
  • Install system upgrades and apply patches

 

With Workday, your IT Staff largely pivots away from the infrastructure maintenance to an application maintenance and integrations focus. Your staff would support Workday’s “Delivered Value” as defined in the Workday Technology Illustration below.

 

 

 

Let’s examine each “Delivered Value” item to determine how they translate into responsibilities for you and your staff.

 

 

Web Familiar Experience

Workday’s main user interface is through the Web Browser and will be how your users primarily interact with Workday (there is also an App).

Enabling your users to access Workday will be dependent on your staff and this can include the following application Maintenance and Support tasks.

  • Adding and configuring New Users in Workday including Single Sign-On (SSO) set up
  • Disabling Terminated Users
  • Setting login and password expiration settings
  • Monitoring New Releases and reviewing their corresponding System Release Notes
  • Using Business Analysis to plan and manage projects for Enhancements and Additional Component Activation
  • Keeping abreast of major functionality changes that will benefit your firm such as Workday Prism Analytics
  • Configuring and Testing System Changes
  • Troubleshooting User Issues and Managing the Issues to Resolution
  • Administering your Workday environments (tenants) – Production and Staging to manage system refreshes and upgrades

 

 

Enterprise Reporting

Workday will become the Golden Source for your firm’s Human Resources and Financial data. Naturally, your users will want to take advantage of this and will want a comprehensive set of reports. Building these reports will require your staff to understand how Workday stores the data and how to extract the data using specific report types.

Furthermore, you will also need to think beyond Workday to consider how HR and Financials data in Workday can augment and complement the data in other areas of your firm. At many of our clients, the strategic vision in consolidating all of the firm’s data involves another tool, usually a Data Warehouse.

  • Building Matrix Reports
  • Building Advanced Reports
  • Building Composite Reports
  • Understanding the available set of pre-configured reports
  • Planning how Workday data can be used throughout your firm

 

 

Integration On-Demand

Central to Workday’s functionality is the ability to communicate your data with both internal and external parties. Internally, you may want to have Workday interact with your internal CRM system such as Salesforce (typically for deal pipeline or other customer management). Externally, you will want to have Workday interact with your various Vendors for Procurement Punch-Outs, Banking Transactions, Benefits and Payroll. This data flow is done via Integrations / API Calls that were initially set up during the initial Workday deployment by the Workday Integrators.

Maintaining the Integrations, API Calls and related File Transfer Infrastructure will fall on your staff and the responsibilities include the following:

  • Mapping out both internal applications and external vendors that will interact with Workday
  • Monitoring Integration Runs and Troubleshooting Errors
  • Collaborating with Vendor Contacts to determine the root cause and resolve
  • Building custom Integrations in Workday Studio (if standard integrations do not meet requirements)
  • Configuring and maintaining a File Transfer Server (if necessary) with secure file protocols such as SFTP, SSL, SSH, etc.
  • Supporting file encryption with keys such as PGP keys
  • Configuring the Firewall to white list Vendor IPs to allow the Vendor to connect to your File Transfer Server

 

 

Configurable Business Processes

Business Processes allow you to define and create your firm’s workflow in Workday. For example, to hire a new employee, each firm will have their own steps to initiate the hire process, enter data, run background checks, obtain approvals, etc. This process is taken from your firm and then re-created in Workday.

Your staff will need to develop their Business Process skills to support the business in the following manner.

  • Investigating and Resolving Business Process Issues
  • Creating and / or modifying Business Processes
  • Tracking approvals given for Business Process changes through the Request Framework or other internal tool
  • Reviewing and Analyzing the Business Process for risks due to Key Man Dependency, Separation of Duties, Improper Access Granted, etc.

 

 

Summary

Implementing Workday will require your IT staff to be fully committed and involved in the implementation from the beginning. This is critical for a successful implementation and a seamless operational support transition. Your IT staff will not be as focused on Physical Infrastructure but rather on Workday and the systems / components related to Workday. IT’s role is critical for segregation of responsibilities and allows your firm to successfully address audit points and regulatory concerns.  This post is designed to guide and instruct you on the changes to come to you and your staff. FinServ has advised multiple clients on supporting their Workday implementation, augmenting their support staff and improving upon existing processes. FinServ is an experienced Workday integrator with the deep industry expertise needed to configure Workday optimally for your firm. For help in implementing or enhancing Workday, contact FinServ at info@finservconsulting.com or give us a call at (646) 603-3799.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

What Keeps a CTO Up at Night and How a Managed Service Provider Can Help

Hedge Fund Chief Technology Officers (CTO) face a litany of responsibilities ranging from:

  • Maintaining the technical infrastructure necessary to run their firms
  • Overseeing regulatory compliance in the technology stack
  • Guarding the firm’s non-public data and systems
  • Managing critical investment and trading systems
  • Shepherding the firm’s adoption of future technology paradigms

To deal with each challenge effectively and comprehensively, CTOs need to narrow their focus to the key issues that involve protecting the firm and their investors and ideally giving the firm a competitive advantage.

Infrastructure / Support tasks can in some cases be removed as a distraction and partially or wholly outsourced to a Managed Service Provider (MSP), a company that remotely manages a customer’s IT infrastructure, applications and / or systems. Often, leveraging the right MSP will allow a fund to redirect their investments in physical infrastructure and onsite support of that infrastructure to other more mission critical projects. With the right MSP partner, a fund can scale quicker and create a robust infrastructure, supporting enhanced performance and productivity, while leveraging the deep and specialized expertise of the MSP. This is especially true with the popularity of Azure and AWS, where the right MSP has deep expertise in leveraging these environments and locking them down securely, an expertise that many funds do not want to hire for internally.

The decision to use an MSP may seem straightforward. But, in order to use an MSP successfully, several factors must be thought through before even engaging with the MSP. (Note that, while we assume you are working with MSPs for the first time, even if you currently have an MSP and are looking to replace them, our subsequent advice is still relevant!) When FinServ performs a vendor selection for our clients in the MSP arena, we focus on the following key questions and on documenting the existing state of key items to facilitate the transition:

 

 Key Activities
  • Identify the critical goals for using an MSP
  • Document the current state of existing IT Infrastructure and Staff, including any significant material investments
  • Define a strong process to assess and select the MSP ensuring that the right choice is made
  • Envision the onboarding and managing of the MSP, including knowledge transfer and KPI / SLA definitions

 

 

MSP Goals

In order to successfully choose and onboard an MSP, it is critical to understand and document the main goals you are ultimately trying to accomplish and how. Consider the following:

 

 MSP Goals
  • Why are you looking for an MSP?
  • Is your goal to cut costs or to enhance performance and add resiliency to your organization?
  • Are there goals that your Chief Financial Officer (CFO) wants you to meet, for example a percentage cost savings or headcount reduction?
  • Do you outsource the entire staff or only certain roles?
  • How do you transition old resources and train the new resources?
  • Are there firm standards to train the MSP on, like Documentation and Testing Approaches?
  • What do you do with the displaced staff – use them as fungible resources to be redeployed elsewhere or do you eliminate the position?
  • What are the most critical requirements you have in terms of turnaround time on issues from the MSP’s support function?
  • Do you have a well-defined escalation policy with your internal staff that is easily transferable into an SLA (Service Level Agreement)?
  • What are the most important measurements you need to assess the success of the MSP against KPI’s (Key Performance Indicators)?

 

 

IT Current State

The MSP’s responsibility is to take on the tasks that your current IT staff is doing. How do you communicate that clearly and succinctly to the MSP so that both parties have a common understanding of what tasks are in scope?

The answer lies in having a full understanding of what your existing IT footprint is and what your current IT staff does. Rationalizing their current roles and what the target operating model will be is crucial to a successful transition.

To effectively outsource tasks that were handled internally to an external party, it is critical to understand all tasks that your staff does, system dependencies and external dependencies. Once you have a holistic picture, you can then go through the exercise of segregating tasks that will be outsourced and those that will remain in-house. With a clear definition of the tasks that you expect the Managed Service Provider to take on, the expected roles and responsibilities will start to become evident.

To achieve this goal, FinServ developed a “Functions of a Hedge Fund” map which allows us to review all the functions you have and then efficiently highlight which functions will be targeted for partial or full outsourcing. This becomes a key document to share with the vendors during the selection process.

Questions to ask yourself include:

  • Do you have a complete and well documented picture of your firm’s IT hardware and applications?
  • Do you have a comprehensive and well documented view of what the IT staff does? Ask yourself, your managers and your staff. This operational assessment exercise might surface some unexpected discrepancies in your understanding of their tasks to what they actually are
  • Which tasks will be outsourced?
  • Does the MSP have the resourcing / skill-set to do those tasks effectively?
  • How will the MSP be enabled to do those tasks effectively?

The FinServ team are experts in comprehensive current state documentation. We can quickly document these current state items to ensure the selection process is based upon your firm’s unique footprint and requirements.

 

 

Choose and Assess the MSP

As the technology thought leader, you should determine and agree on how you will choose the MSP. Choosing an MSP is no small task and to give yourself the best chance at success, this needs to be carefully considered. Having an experienced consultant like FinServ with specific knowledge of the MSP marketplace and industry trends can increase your firm’s chances for success.

 

 Choose and Assess
  • How does the MSP staff their IT support team? Full Time / Part Time, Pooled Resourcing vs Dedicated Resources
  • Will you use best of breed or do you want a one-stop shop MSP provider for all IT-related services?
  • Does the MSP offer support for all Cloud providers or do they specialize in one provider?
  • Does the MSP have a global footprint? Can the MSP provide support for all your locations with local resources?

 

 

Onboarding and Managing the MSP Relationship

Equally as important as selecting the right MSP for your firm, ensure you can properly onboard and manage the MSP. In most cases, we have seen that clients do not have the dedicated resources to see this part of the MSP process through. Should that be the case, it is critical to get an experienced consultant like FinServ who can provide dedicated expert resources to lead you through the process.

Once the MSP is onboarded, they will need to be managed – you will need to have measures of success in place to measure the MSP’s performance. As part of the selection process, meeting with each MSP candidate to review their understanding of how you will evaluate their performance is critical. Consider items such as:

 

 Onboarding and   Managing the MSP
  • Who is managing the MSP Onboarding project and is there a clear definition of key milestones and sign offs for the onboarding process?
  • Is there a communication plan to inform the rest of the firm on what the change is, how it impacts them and what the new process is?
  • What is the new MSP support operating model (i.e. how to submit tickets, who to contact) and is it well understood by your team? If this is a change to your current process does everyone in your Front Office know how things will change? Have you level set their expectations?
  • What are the key metrics being measured and how often will they be measured?
  • Will there be financial repercussions if KPIs are not being met? Have you defined an escalation policy with the MSP?
  • Are there SLAs in place that keep the relationship healthy and intact?
  • Who on your team and on the MSP team will be managing the relationship?
  • What is the cadence of meetings with the MSP to review performance?
  • Is there an issue tracking, resolution and escalation process in place?

 

 

Summary

If any of these themes resonate with you and your organization, please reach out to FinServ. FinServ has advised and managed multiple Funds through selecting and onboarding a Managed Service Provider.

By leveraging our methodologies and industry best practice tools we can expedite your selection and ensure a successful onboarding process saving both time and money and ensuring this complex and critical process meets the goals you set for it at the start.

If you already have an MSP, but they are not providing the services that you require, the same thought processes and best practices are still relevant when replacing your existing MSP.

Throughout our 15 years of existence, we have proven that our deep industry knowledge combined with our project management and overall best practice methodologies can be an asset to your organization. To further continue the conversation or to discuss more of FinServ’s capabilities, please contact FinServ at info@finservconsulting.com or give us a call at (646) 603-3799.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

Salesforce myTrailhead is Your New Customizable Learning Platform to Educate Your Workforce

Salesforce recently announced the rollout of myTrailhead as a standalone add-on product for existing Salesforce customers. Salesforce Trailhead was originally designed as a self-learning and education tool for Salesforce users allowing anyone (customer or not) to start learning, earn badges, and work towards Salesforce certifications. Over the years, Salesforce began adding non-Salesforce specific knowledge on to Trailhead including topics like HR diversity/inclusion and EU data privacy laws. Salesforce myTrailhead takes that idea further than ever by extending the highly successful Trailhead learning management platform by allowing customers to add their own firm-specific content.

myTrailhead allows customers to create, manage, and deploy their own tailored, firm-specific education on top of the existing Trailhead platform and knowledge base. While the core focus of Salesforce Trailhead was traditionally focused around educating core Salesforce users (i.e. sales professionals, system administrators, and IT support staff), Salesforce myTrailhead is a general-purpose learning experience tool that can serve several multi-purpose roles for any asset management firm.

Why is Salesforce myTrailhead Such an Important Product Release?

“Business leaders recognize that investing in their people and building a deep culture of learning is a key strategy to moving their company forward.” – Sarah Franklin, EVP of Developer Relations and GM of Trailhead

Employee well-being is now an ever-growing focus of all firms drawing huge amounts of time, attention, and capital across HR. Technology giants lure top prospects with benefits such as onsite gym/laundry, stockpiled snacks in the pantry, and paid meals. The asset management industry is no different with all firms looking for the best ways to spend on employee morale to either differentiate themselves or at least to seem competitive with their peers. Salesforce believes that cultivating a culture of learning is one of the best bang-for-your-buck ways to attract, retain, and engage your workforce, while helping employees gain new, valuable skills along the way.

A study by Josh Bersin discovered that employees who spent five or more hours a week learning achieved the following benefits compared fellow employees that spent an hour or less in similar activities:

  • 74% more likely to know where they want to go in their career

  • 48% more likely to have found purpose on their work

  • 39% more likely to feel productive and successful

  • 21% more likely to be happy at work

  • 47% less likely to be stressed at work

Create a Culture of Continuous Learning at Your Company Today

Creating a learning management experience for your firm can seem daunting if you are starting from scratch, but there are a ton of areas that should be low-hanging fruit for any asset management firm:

  • New Employee Onboarding and Firm Intro Education
  • Overview of Key Departments and Product Areas
  • What You Need to Know – New Strategy Launch
  • Compliance Training and Attestations

These are just some ideas to get some creative juices flowing, but truly the possibilities are endless.

What Makes the Salesforce Trailhead Platform Great?

FinServ Consulting is a Salesforce Partner and we have long recognized Salesforce Trailhead as the platinum standard for vendor-specific learning and education. Salesforce Trailhead launched during Dreamforce 2014 and it was immediately clear that Salesforce created something special: an engaging, non-threatening ecosystem for users of all levels to self-teach and learn valuable new skills.

Key Highlights

  • Self-Paced Learning: Trailhead leverages an interactive learning style made popular by educational websites such as Coursera and Khan Academy. The goal is to provide users learning Salesforce with easy access to the information and training that they need at their own pace and schedule. With Salesforce Trailhead, you can learn exactly what you need when you need it by choosing the appropriate set of trails.
  • Gamification: Points and badges  are awarded to users on successful completion of units and modules. The points and badges are displayed on each user’s profile, so you can get recognition for your expertise. After achieving certain point and badge totals, users will “level up” to a higher rank. Users start off on the trail as a “Scout” and can progress level-by-level to higher ranks like  “Hiker”, “Mountaineer”, and ultimately “Ranger”.
  • Learning Paths: Content is arranged in a hierarchy with three main levels: trails, modules, and units. Material is presented in an ordered sequence, so customers have a predefined learning path to follow without having to spend time on deciding what to read and in what order.
  • Modular Learning and Engaging Content: Each tutorial consists of short units the can be reviewed quickly in 10-15 minutes each. The content is designed to be simple, self-contained, and high impact to maximize the value of the time spent in Trailhead.
  • Interactive Assessments: At the end of each unit, users will be challenged to verify what that they learned the material, either by answering multiple-choice questions or performing specific tasks in sandbox or playground environment. Feedback is immediate and users can tell how well they mastered any concepts based on how the system scores their responses/activities.

The Bottom Line

Salesforce myTrailhead is a learning experience platform that empowers companies to reinvent how they are approaching learning and enablement. With myTrailhead, you can leverage and extend the power of the base Trailhead platform by incorporating your company’s specific customizations around logos, branding, and specific content. With a skilled hand, users can create and publish engaging, personalized, bite-size content to empower learners to develop new skills, hone existing ones, and showcase their knowledge with badges and points.

Getting started with a learning experience tool like Salesforce myTrailhead can seem daunting, but FinServ Consulting can help you seamlessly plan for and implement these technologies to suit your unique firm needs. FinServ Consulting is a Salesforce Consulting Partner with deep expertise in asset management, systems integration, and strategic consulting. Our guidance ensures that our clients receive the best tailored recommendations for all their Salesforce needs.

To learn more about FinServ Consulting’s services, please contact us at info@finservconsulting.com or (646) 603-3799.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.