This is the latest in a series of blogs from heads of SS&C’s global retirement businesses in Australia, the United Kingdom, and the United States—three developed retirement markets—on industry trends and future, outcome-oriented best practices.
In our "Why You May Be Wrong About Digital Transformation" blog, we challenged how many in the Australian superannuation industry incorrectly use the term digital transformation. In practice, most are only engaged in digital evolution. Digital evolution is about upgrading your digital business capabilities in stages as opposed to a complete overhaul, but it is an unsustainable, fragmented approach. When you truly transform—when you bring digital to your core and connect the entire ecosystem—you not only future-proof your technology but you open up the ability to reimagine and reconfigure your entire operating model.
Transforming the Physical and Digital Workforce
Imagine what your operating model could be if you weren’t restrained by any current functional limitations and/or requirements. Instead of adapting around system limitations, current process flows, work functions and any embedded status-quo limitations, what if you could totally rethink how your business is structured? Bringing digital to your core through a microservices approach means you no longer need to see technology as three distinct “offices”—front, middle, and back—but as one ecosystem enabling three interconnected activities.
And with that, the nature of work—how you work and who does the work—possibly all change. You can embark on a wider organizational transformation where any traditional limitations on the outsourcing model, workflows and even workforce become a thing of the past.
How You Work: Your Model of Choice
Current technological and operational designs generally rely on economies of scale and volume to generate efficiency. This benefits larger funds that have the size and resources to choose whether to outsource, in-source or build their own technology and operational models. Mid- and small-sized funds don’t always have the flexibility to pick a service structure as cost constraints often limit service options.
A flexible, digital-based microservices approach permits superfunds of any size to manage their technology in small, discrete pieces. As such, when change is needed, the scope of adaptation, configuration and testing is faster, more contained, less risky and more financially manageable. There is less concern about upstream and downstream functions and any knock-on impact of change. Superfunds of any size gain the freedom to adapt at a smaller, more manageable scale, allowing resources to be deployed to higher benefit areas. Digital transformation thus upends the volume construct and delivers efficiency and value whether through total outsourcing, insourcing using in-house technology or Software as a Service (SaaS) technology, or through a hybrid model.
How the Work Gets Done: Re-Thinking the Organizational Model
In addition to giving you flexibility in your operational model, a cloud-based, microservices platform frees you from conventional in-house, task-based organizational structures. Thinking holistically may mean you can realign—or even eliminate—some of the steps previously needed in the process.
Simply said, you can redesign the path to the desired result. Consider the best end-state delivery outcome. With a holistic view that disregards traditional work/function divisions, is there a different way to structure your people and their skills to deliver that? When you don’t need to work around the limitations of traditional cumbersome processes, how can you work differently? Maybe it’s thinking about placing more resources in customer-facing teams. Maybe some groups can operate more autonomously, no longer needing their current hierarchy and decision-support structures. Perhaps some areas need greater resources as they are areas where critical or complex assessments are made. Digital transformation helps you gain cost-efficiencies beyond just the automation of manual steps, identify new sets of skills and redefine organizational value.
Who Does the Work: The Hybrid Workforce
With the freedom to redefine the nature of work and how it gets done, you can think more constructively about who does that work and how you can combine your technology and your people to deliver more. When you’re not bound by traditional silos that compartmentalise thinking, capabilities such as business process management, machine learning and artificial intelligence can assume larger and more effective roles that complement human efforts.
These capabilities already exist in many back-office environments and superfunds have been leveraging large quantities of data through them for a long time. But in a single-ecosystem view—where there is no distinct front, middle and back office—breaking down the silos allows access to a wider and more complete data set. In turn, more data and more complete data leads to more effective predictive analysis, and the ability to run more in-depth analysis, possibly even in real-time. You can identify where human oversight fails, and, conversely, where it is needed. With these observations, people can be redeployed to critical or high-return areas instead of being employed in low-value or redundant tasks.
A Level Playing Field
Superfunds of all sizes stand to benefit from the future-proofing that comes from a transformative approach. With the ability to realise cost savings from any model of any size, adopt varying service structures, and embed “intelligent operations” into the process, cost and expense rankings become a more level playing field. Performance and investor experience become the benchmark. The starting point to achieving this is a bold step of integrating digital at the core. It requires vision, confidence and future-forward thinking that brings together business and technology.
With an open, secure platform as the foundation, SS&C will help you leverage the growth technologies needed to drive true digital and operational transformation. Full Business Process Outsourcing, hybrid, or Software as a Service models help reduce your operating costs and grow your membership base. We actively work with the global retirement industry to develop leading technologies and data-driven business solutions that incorporate intelligent operations. Our team of professionals combines years of industry expertise with a proven solution set for optimizing actionable data.
To learn more about a transformative digital solution and what it delivers, read the "Digital to the Core – Part Two" whitepaper in our “Digital to the Core” series.