Outsourcing – The war is over

A survey of the investment administration outsourcing market carried outby CityIQ, in association with Northern Trust, has revealed that:

• The outsourcing market has come of age. The strong feelings bothfor and against that typified our last survey have fallen away. Intheir place there is recognition that whilst outsourcing is not withoutits problems (and is by no means a panacea) it clearly hasadvantages.

• The outsourcing market is all about relationships. A recurring themein the results is one about the strength of relationships and “culturalfit” Respondents are quite clear that selecting a partner who hassimilar values and a similar way of doing things is crucial forongoing success.

• The outsourcing market has matured. There are now moreindividuals in the market with direct experience of outsourcing atleast some of their back office functions. As a result more peoplehave an idea of what works and what doesn’t – which can only begood for the industry in the longer term.

Paul Wiltshire of CityIQ explained:“When we last surveyed this market in 2006, there was still a livelydebate about the future of outsourcing – would it become establishedpractice or would it fall away. Two years on and the issue has beendecided – outsourcing the back office has become an established elementof the investment management market place. Indeed 80% of respondentswere convinced that outsourcing was the right decision for them.”