Webinar Recap: Dual-Track RFP Processes Used in Replacing Legacy Technologies

Eagle’s July webinar with WatersTechnology highlighted how buy-side investment firms are increasingly investigating not only stand-alone software solutions but also managed services and fully outsourced alternatives to replace outdated portfolio management and accounting technology

Mike Maltby, Head of Market Strategy

In July, Eagle participated in a WatersTechnology webinar discussing best practices around legacy system replacement and the critical role portfolio management and accounting systems can play in supporting business growth. One of the key takeaways from the webinar was the growing tendency among buy-side firms exploring new solutions to pursue a “dual-track” RFP process. Increasingly, asset managers will simultaneously weigh both the costs and benefits of choosing either a hosted software solution—including possible managed services—or a fully outsourced alternative that hands off the entirety of the day-to-day management to a third-party provider.

The webinar featured Prescient Chief Operating Officer, Craig Mockford and Desjardins Senior Advisor, Mario Coulombe in addition to myself, while WatersTechnology Editor in Chief, Victor Anderson moderated the discussion.

The webinar highlighted the extent to which buy-side firms are operating with sub-optimal and outdated technology as well as what the business ramifications can be when vendors either begin to sunset older systems or fail to reinvest in mission-critical technology. Over 40% of the more than 250 viewers that attended the webinar indicated that their own organization is currently running an outdated or obsolete portfolio management or accounting system, and over a third cited that legacy-platform and vendor risk represent the greatest challenges to growing their business. In discussing a starting point to address this threat head on, Prescient’s Mockford noted that for his firm, the initial objective was to understand all of the possible alternatives by sending out RFPs to key software vendors as well as the top outsourcing solution providers.

“As our business was growing, we really faced some tough decisions,” Mockford described. “We could either outsource our administration and accounting completely or keep it in house…A lot of businesses are outsourcing the problem, but we viewed [our accounting platform and capabilities] as a key competency.”

Coulombe, meanwhile, highlighted that the platform decision has taken on heightened importance in recent years. This is not only due to the attention and scrutiny organizations place on understanding risk and meeting compliance demands, but also because their own clients and prospective clients increasingly seek transparency into their operational capabilities.

“There can be a lot of external pressure to ensure that asset managers are being supported by best-of-breed solutions,” Coulombe explained. “If you look at the RFPs we receive, prospective clients want to have a discussion about the technology we’re running and the different vendors we’re using.”

The biggest challenge, as we have addressed in earlier Exchange blogs, can be assessing the various costs involved with maintaining the status quo. As Mockford pointed out, hindsight for Prescient has demonstrated that the impact of staying on a legacy system or taking a piecemeal approach to upgrading back-office technology would have probably been far more costly than the firm initially assumed.

“We thought we understood what we needed, but it can be difficult, initially, to see all of the advantages of a solution that is both new and significantly different than its predecessor,” Mockford said. “We looked at all the various providers for an accounting engine, data management, performance system and reporting solution, and when you consider each one individually, you can forget that it excludes the cost of integration and maintenance…We went with Eagle’s hosted enterprise solution, which is just about a one-stop shop. Even today, I don’t think we fully appreciate how much we’ve saved in terms time, money and pain.”

As I discussed during the webinar, as part of the RFP process, it can serve buy-side firms well to explore the full spectrum of what is available, from stand-alone software, to managed services, to a fully outsourced offering. Exploring the solution options, coupled with best-in-class technology and services, helps firms to optimize around their organization’s specific needs at a given point in their growth cycle.

One of Eagle’s key differentiators has long been its service continuum, which includes the options to host the software through Eagle ACCESSSM, our secure private cloud, co-source, leveraging managed services, or fully outsource via BNY Mellon. It is because of this that we are strong advocates for the dual-track process. Together, Eagle and BNY Mellon offer firms a continuum of solutions and the dual-track process allows clients to select the offering that best fits their business needs.

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