Conditions and needs change. Over time, organic growth, acquisitions and divestitures, services and product line shifts, regulatory requirements and staff turnovers affect the asset manager’s operating model. Asset managers who have not recently performed a strategic review of their operating model may be missing out on opportunities to create the scale and agility that a unified operations and technology platform can make possible.

What’s an operations leader to do?

Perform a checkup. Then tune up the operating model. It keeps growth, profitability, efficiency, risk and data management in sync with strategic business objectives.

For this periodic review, a proven three-step approach yields the best results:

Phase 1: Perform a current state assessment

This step takes a deep dive ‘under the hood’ to look at and document the present day procedures, work flows and functions. It shows what is really happening in light of ad-hoc adjustments, workarounds and other changes that may have occurred.

The examination develops high-level data flows/workflows and a functional map for each core process; identifies and quantifies the impact of redundant and manual processing; and reviews the technology infrastructure. In all, it determines the strengths and weaknesses of the existing operating model. All of this information creates the framework for what comes next.

Check up. Then tune up to ensure operations are highly efficient, flexible and scalable

Phase 2: Redesign business processes and future state operating model

Input from the first step goes into masterminding a revised model. It closes any gaps and remedies shortcomings. Most importantly, it should incorporate future needs and industry leading practices. This exercise could provide operations leaders with the opportunity to make game-changing improvements to business processes that can capture significant efficiencies and market advantages.

Technology plays a critical role here to support improvements, both present and anticipated. Communication does too, within the firm as well as with potential vendors and outside resources required to deliver the new configuration.

Phase 3: Develop an implementation roadmap

Following assessment and redesign, building begins. Implementation calls for a combination of decisive action, phased migration and hands-on work to create the new operating model. Rollout starts with the strategic and tactical issues identified in the two previous steps that require immediate attention. It proceeds when a phased migration strategy is synchronized with other moving parts, such as strategic technology implementation.

A roadmap ensures that project managers and key stakeholders are aligned.

Here’s a step-by-step guide to developing it:

  • Prioritize initiatives ─ immediate action vs. those dependent on rollout of technology
  • Develop a phased migration strategy ─ an action plan that outlines major initiatives facilitating the redesigned environment
  • Kick off implementation activities ─ tactical initiatives at the start
  • Continue to build out business requirements ─ first on those that support the day-one model

A set of deliverables helps pave the way for an undertaking of this magnitude. It includes: a high-level outline to implement strategic recommendations; a build-out blueprint of the future state model aligned with the rollout of the strategic architecture; and a training plan for the post-conversion future state of operations.

Optimizing operations exploits competitive advantages and technology capabilities

Conclusion: Align Over Time

As organizations change over time, their operating models must too. A targeted model is a systematic organization of functions that carries out the functions of the firm to best exploit competitive advantages and advanced technology capabilities.

Developing and maintaining a highly efficient and scalable operating model is one of the primary responsibilities of an operations executive. A disciplined assessment process creates identifiable benchmarks for implementation. It’s the operations leader’s best tool. And it leads to aligning operations with business objectives …  and ultimately to operational alpha.