Milestone Group, the specialist provider of optimised fund processing solutions to the global funds industry, is calling for a radical rethink to investment decisions in fund administration technology. In a newly published white paper, Milestone Group explores the inherent limitations in traditional investment decision models that prevent firms from achieving transformational efficiency gains in fund administration operations.
Entitled ‘Efficient fund operations – Decision making for a leaner future’, the white paper discusses how a new approach to decision making can unlock a level of efficiency that is often sought, but frequently believed to be out of reach.
The paper considers how technology-driven transformational investment projects can be protected from short-term market changes resulting in shocks to revenue, by placing the decision making process in the broader context of non-financial costs and benefits and a longer term investment time horizon.
“The funds industry has faced extreme and rapid change in recent years,” said Geoff Hodge, CEO of Milestone Group and author of the new white paper. “This is no longer a passing trend but the new normal. The industry needs to recognise that to achieve sustainable profitability in an ever-changing market, the traditional investment decision making models must be reviewed.”
Change, such as the need to support new products, meet additional regulatory requirements, improve transparency and respond to unanticipated events means that technology investment costs can spike at any point along an anticipated payback timeline using traditional investment models. This can significantly hinder the performance and ROI of change projects or even contribute to business failure.
“The current climate makes it critical that any investment in operational change produces an operating model that enables the business to remain competitive, whatever the market conditions. Demand for transformational change in fund administration will therefore be best served by a deeper and more flexible approach to analysis of costs and benefits associated with investment decisions,” Geoff added.
This is the first of three papers that will examine the role of operating model design and technology investment in achieving efficient fund administration. The white papers are intended to be read either as standalone documents or a series, and together will create a roadmap for those seeking a more competitive level of fund administration efficiency than is routinely observed today.