Once a clear strategic plan is set and agreed, it is imperative to transform the operations of the organization to eliminate redundancies, implement a consistent operating model, bring data ‘on platform’ and ensure all employees are adequately trained and provided the right tools for success. With the continued growth and complexities in investments, operations teams are expected to do more with less and must adopt a consistent operating model in order to keep up with the demands of management, clients and regulators.

For GPs this invariably means better front to back office integration of information flows and more transparent data sharing with third parties such as LPs as well as clearly defined operating procedures and systems to support the operating model and ultimately meet regulatory and compliance requirements.

For LPs this often means integrating the management of alternative assets with the liquid and direct portfolios as well as supporting the ever more arduous tasks associated with regulatory and compliance reporting.

Key considerations in transforming business operations and defining the target state model include:

Results:

Capacity:

Processes:

People:

Infrastructure:

Engagement:

Performance:

Governance:

Costs:

What are the key results or outputs required by the users or customers of this organisation or unit?

What capacity is required of this organisation/unit and how does it vary at different times (day, week, month, year)? How would forecasting and capacity adjustment take place?

What are the processes that deliver these outputs/results? How are these communicated?

What groups of people (e.g. departments, functional teams, custodians) work together to deliver the required outputs/results?  Who does what?  How many people are in each of these groups?  Where are they located (centralised vs. decentralised, geographic location)?  What capabilities do they need?  What are their greatest frustrations?

What systems, tools and infrastructure are required to deliver these results/outputs? Who owns them? Where are they located?

How do the teams communicate with each other regarding requirements and performance (both day-to-day as well as more strategic conversations)? How are hand-offs from one team to another managed? How do teams communicate (internal or external)?

How is performance of the operating model measured, managed, and reported? How are performance issues addressed? How is continuous improvement achieved?

Who has the accountability and authority over the elements of the operating model and the results/outputs generated? How are decisions made?

How much does it cost to run the new operating model?

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