Target Operating Models link strategies to outcomes. Following this blueprint, investment firms can achieve deep-rooted and meaningful change, evaluating their entire operation top to bottom, leaving no stone unturned.
For buy-side investment managers, they want their operation to be as efficient, cost-effective, and scalable as it can possibly be.
The problem is that many firms struggle with rising operational costs, complexity, and inefficiency.
As one example, 73% of asset managers cite the increasing cost of operations as reason to seek solutions that enable scale and efficiency, according to Cerulli Associates.
Clearly there is a need to do better and be better. To reach that optimal state, investment organizations need to know their starting point, and they can do so via Target Operating Models (TOMs).
A Target Operating Model is a framework that determines how a business will operate in the future, in line with the organization’s strategic goals and objectives.
By following this model, investment firms will undergo a comprehensive overview of their current setup: people, processes, technology, leadership & governance, service delivery, and performance measurement.
Target Operating Models allow for an honest and unbiased assessment of an organization, determining the starting point and mapping out the journey to achieve the desired optimal setup.
Within all assessments, there is a common theme: digital transformation.
Digital transformation is a process by which technology is embedded into all aspects of an organization, making the organization more interconnected, using technology as a driving force and a conduit to carry out the desired change across all sectors.
Digitally transforming is about making the best use of time and money, maximizing productivity and efficiency, getting the most out of people and technology, and eliminating old ways and inefficient practices that hold back an organization.
Following the Target Operating Model approach, digital transformation will shape one’s mindset in mapping out the steps for their end goal.
Do you want to:
Be as concrete as you want. A Target Operating Model is meant to address that specificity.
Without bias or reservation, answer the below questions.
Then honestly ask yourself: are you satisfied with your answers?
You might have lofty goals, which are perfectly acceptable.
The challenge is how to attain those goals, especially after your answers might have revealed how hard it is to achieve those outcomes.
The good thing is you’ve determined a starting point, and now a path can be set.
When setting up your improvement roadmap, it will require deep-rooted and fundamental change for your operation.
These changes will undoubtedly deliver excellent results for your organization, but in all likelihood, most investment firms lack the capabilities and resources to implement the changes on their own.
Investment managers are in business to make money for their clients. Every business-related activity beyond that (accounting, taxes, HR, middle- and back-office operations, technology, compliance) is still important, but it’s not core to the business in generating revenue.
In most cases, these non-core aspects of the business are not as well run. Firms often lack the time, resources, expertise, or even interest in those areas, and their business gets slowed down by inefficiency and ineffectiveness in those processes.
Fixing those areas requires an extra set of expertise beyond your capacities and skill sets. That is why you need a partner in setting up a Target Operating Model.
At Empaxis, we have years of experience helping investment firms set up Target Operating Models for their middle- and back-offices, overseeing successful delivery of results:
Through our EDIT (Empaxis Digital Intelligent Transformation) approach, we will do a thorough assessment of your entire investment operation, conducting in-depth interviews with staff and seeing your day-to-day processes.
Additionally, we will do a comprehensive analysis of the people, processes, technology, leadership & governance, service delivery models, and KPIs (key performance indicators). From there, we’ll evaluate your middle- and back-office strengths and weaknesses, as well as how to improve upon those weaknesses.
Based on our findings, we will build a customized roadmap for your Target Operating Model.
Empaxis will create very specific instructions to carry out the recommendations, as well as develop timelines and milestones for implementation.
We Are Beyond Your Typical Consultants
Most consultants provide advice, get paid, and move on. Rarely do they see their suggestions implemented and the results that follow.
We don’t agree with that approach because it’s too easy for consultants to get paid without being held to account for potentially bad ideas.
Instead, Empaxis provides expert advice, backed by two decades of experience. We are there every step of the way to ensure a successful delivery.
The same solutions we provide to you, we would provide to ourselves if we were in your shoes.
As a few examples:
And based on these changes, you will have clear KPIs from which to measure your success and efficacy.
At Empaxis, we not only advise, we also do.
Investment firms cannot afford to sit idly by and unprepared for the challenges ahead.
Rising costs, an uncertain market, and increased complexities in running a business are just a few pain points that prevent a business from achieving its goals.
And lack of preparation will set firms back - in some cases beyond repair - if they don’t make the fundamental changes necessary for their organization.
That’s where Target Operating Models come in, providing the framework to get from current state to ideal state.
Empaxis will work with you to deliver that ideal state, putting the Target Operating Model into action.
Our unparalleled experience and expertise, having worked with hundreds of investment firms, puts us in a unique position to provide not only expert and practical advice, but also the ability to deliver the very solutions we recommend to you.
Time is of the essence, and it’s time to act.