Outsource to increase efficiencies and reduce risks

By: Marius Esterhuysen

For many hedge fund managers, it is no longer an issue of whether to outsource, but rather, which functions to hand off and how that can be best achieved.

À la carte

Today, outsourcing is all about choice and flexibility; firms can choose from a diverse “adoption spectrum,” ranging from IT hosting and co-sourcing arrangements to full business process outsourcing.

Along that spectrum, you can put together a highly customized combination of technology solutions and operational services that makes sense for your specific business needs and objectives. It’s a case of identifying what you do best, and who can do the rest better.

Getting the right fit

This enables hedge fund firms to be strategic about how staff and resources are deployed. Which set-up will drive even greater efficiencies, reduce risks, and give you the agility to add new products, enter new markets, or scale up or down as fast-moving market conditions change? In short, how can you achieve the keenest competitive edge possible?

Outsourcing enables you to:

  • Offload time-consuming and repetitive tasks (e.g. reconciliations, reporting, and performance management) to a provider that is more experienced and better equipped to handle them, so staff can focus on value-added and revenue-generating activities
  • Access “anytime, anywhere” cloud-delivered technology
  • Implement technology solutions quicker than with an in-house installation
  • Stay current on technology with regular upgrades
  • Access robust business continuity and disaster recovery

Too much of a good thing?

This service flexibility and diversity helps hedge funds access targeted solutions that better meet their individual needs. The danger is that working with niche providers that only offer certain technology hosting capabilities, or specialize in one aspect of operations outsourcing, could prove too restrictive as a firm grows or its needs change.

The alternative is an outsourcing provider that offers a wide range and flexible menu of technology hosting and operational services. This makes it easier to add capabilities with minimal disruption when the need arises. Outsourced providers also bring more seamless issue resolution and increased cost efficiencies.

And it’s not just about functionality. In any partnership, the quality of the relationship is key. That means working with a provider that understands your objectives and can effectively serve as an extension of your in-house team in the areas where you need them.

Done right, what’s not to like?

For more information, please download our whitepaper “Technology and Operations Outsourcing” or contact us at 800-234-0556 or solution@sscinc.com.