Case Study: Portfolio and Order Management System Selection

Client Challenge

A large public sector asset owner with the strategic ambition to be a best in class investment manager has recently consolidated the investment management functions of its three business entities into a single consolidated entity managing >$100B of funds.

The asset owner managed their funds using a multi manager approach where external managers (primarily) are selected and funds invested either via pooled vehicles or investment mandates.  They also had internal Credit and Fixed Income teams that directly managed discrete assets and are granted mandates by the multi manager teams. 

An internal review highlighted the need for an end-to-end portfolio management solution that would provide portfolio exposure, risk management, order management and execution capabilities across the multiple investment functions.

The client engaged Shoreline to run the selection process which involved the identification of the key functional requirements, conduct a market scan to identify and shortlist potential solutions, run the solution selection process and recommend a preferred and alternate vendor solution.

Shoreline Approach

To meet the client’s needs Shoreline took advantage of its industry expertise across the investment and wealth management markets, together with its front office investment experience, to conduct a detailed selection process.

This approach identified key business requirements and recommended a solution that met those requirements. A key component of the process was to model the Total Cost of Ownership (TCO) of each vendor solution providing insights into the various one-time and ongoing vendor costs.

Key activities:

  • Requirement Collection and Define Assessment Criteria: Shoreline conducted workshops with key stakeholders to gather detailed requirements and agree the assessment criteria
  • Long to Short List:   Shoreline conducted a market scan to identify the long list of potential vendors. Based on the defined assessment criteria, we shortlisted four vendors for the Request for Proposal (RFP) process. For the vendor shortlisting, Shoreline’s existing knowledge base of the solutions, desk-based research and our network of clients using the various solutions was leveraged. Shoreline also relied on vendor workshops to ensure specific and current information was collected for the assessment
  • RFP Assessment: Shoreline prepared and issued vendor selection RFPs to the shortlisted vendors.  We briefed the shortlisted vendors to provide context and explained the RFP and associated process. Based on vendor workshops and demos, the RFP responses were scored by Shoreline. This process also included the development of a TCO model for each of the shortlisted vendor solutions breaking down the implementation and ongoing costs
  • Select Preferred: Shoreline facilitated workshops with the client stakeholders to review key issues, vendor demos, qualitative vendor assessment and final RFP scores; each to be used as an input for preparing the recommendation report. It was at this stage that Shoreline conducted detailed reference checks. Shoreline prepared the recommendation report (consisting of both quantitative and qualitative evaluation summaries) and presented a preferred and an alternate solution to senior management
  • Further Due Diligence: Shoreline conducted further due diligence to verify the key terms and commercials with preferred vendor as well as the alternate vendor; which were used as an input during the contract negotiation phase
  • Proof Of Concept: A detailed Proof of Concept (PoC) was undertaken with the preferred vendor, facilitated by Shoreline. The PoC focused on functional areas of importance and uncertainty to accurately assess the ability of the system to meet the specific needs of the client. The PoC also allowed the portfolio managers to experience the usability and workflow of the new system.

Results and Client Benefits

Shoreline delivered an objective preferred and alternate vendor solution recommendation based on a comprehensive quantitative and qualitative assessment. Shoreline’s preferred vendor recommendation was approved by the client’s board.

Throughout the engagement Shoreline was able to deliver the following key benefits: –

  • Provided senior client stakeholders with a structured approach based on Shoreline’s tried and tested vendor selection process.  Shoreline were able to recommend a solution that met the organization’s current and future portfolio management requirements in a cost effective and timely manner
  • At each stage of the process, Shoreline took key stakeholder on the journey by securing buy-in of all senior client stakeholders before proceeding to the next stage. This ensured the process did not get bogged down at critical points. This also ensured that post the engagement, senior client stakeholders clearly understood the capabilities the system would support and not support
  • Shoreline’s proprietary market scanning was able to quickly narrow down the long list to identify the vendors most likely to meet the client’s requirements
  • Shoreline’s vendor assessment process complied with the procurement policies of the client including independence in the process
  • Shoreline produced a target high-level system architecture which served as an input to the selection process and ensured the preferred solution would fit into the client’s operating model
  • Shoreline acted as a liaison with the potential solution providers to reduce the risk of the client’s BAU staff getting bogged with vendor interactions
  • The commercial outcome of the vendor selection was in line with client expectations. Shoreline’s Total Cost of Ownership model accurately outlined the yearly vendor solutions costs over a 7-year period, which enabled the client to resource the project appropriately
  • By having Shoreline run the end-to-end vendor selection process the involvement of the client investment teams was reduced thus minimizing the impacting their BAU workloads

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