We’ve all suffered from buyer’s remorse. That sickening feeling is bad enough when you’ve overspent on a pair of shoes that, upon reflection, don’t fit properly and are unlikely to use. But when the decision determines your livelihood, the consequences of making a mistake will be a whole lot harder to stomach.
System purchases are among the most important choices fund administrators ever make. As we discussed in a previous blog, technology has become central to administrators’ service propositions and a vital source of competitive advantage – so it pays to pick well.
Go beyond the headline system functionality
Functionality range and quality are clearly prime considerations. The buying decision though needs to go beyond shiny bells and whistles. Technology that seems great now can get dated all too quickly. Just look at the Nokia 3210 mobile phone.
Fund administration platforms involve major outlays with long-term consequences. Purchases therefore need to be made with one eye on the present and another on the future. Yes, ensure any system you’re road-testing fills the current technology gap you have and can perform all the tasks you want. But ensure too that the vendor will be there for you on the journey and that its solutions will develop alongside your changing needs.
System vendor attributes
While you may not be able to predict the future, there are certain attributes you should look for in a system vendor that serve as a good guide.
- Proven track record
A financially healthy software company with a proven track record and dedication to the industry will give administrator users, and your investment manager clients and prospects, assurance that the systems will be supported for the long haul. A long-term track record and dynamic development team also help negate concerns around key person risk.
- Fund industry domain expertise
Does the software provider combine technology expertise with deep industry domain knowledge?
Fund administration puts complex demands on providers, especially as they expand the services they offer and move up the value chain. Vendors need a detailed understanding of what each function entails, and be able to leverage that knowledge to provide clients with actionable industry insights and best practice guidance.
- Responsive support
What happens when a problem emerges? An update is needed? A new regulation is introduced or an industry event takes place?
Automated support systems that can help quickly resolve issues are a valuable part of the equation. What ultimately matters to clients though is access to people: having expert client service teams, account managers and strategic relationship directors available to discuss your needs, and resolve problems and queries.
- Technology that grows with you
Software is not a one-time, set-and-forget purchase. A system may serve your purposes now, but will it in two years, or five or 10?
All technology companies should have an active technology roadmap and be investing heavily in it. Equally, that upgrade path needs to be aligned with your development trajectory. If the provider doesn’t have the capacity or desire to collaborate on those developments, capability shortfalls will become pronounced and the relationship strained.
- A trusted partner
Pure transactional-style relationships with third-party providers leave administrators ill-equipped to thrive in a changing world. Will the vendor evolve with you, and continue to provide the level of customer service you seek?
A partnership approach works best when the vendor’s employees have real fund administration experience and can put themselves in clients’ shoes. Collaboration based on frequent communication will help you leverage the full functionality of the vendor’s systems, and inform ongoing product development plans to achieve continuous, maximum return from the solutions and services.
Buyer beware
System capabilities matter. But so too do the type of solution provider you pick and the relationship you forge. Stability, strength and commitment to the sector, plus the vendor’s all-important technology roadmap, will determine how good a long-term match the platform proves to be.