A recent article in Ignites caught my eye. It detailed a recent research report by Deloitte’s Casey Quick, which revealed that asset managers that spent the most on technology (related to distribution) over the last three years saw significantly higher profit margins than those of their peers.
A few of the highlights pulled from the report by the publication:
- Asset managers globally spent upwards of $2.2 billion on distribution technologies in 2017 (approximately 6.7% of firms average distribution spend).
- Firms that spent the most on technology saw growth equal to double that of their peers; the firms that spent the less on technology actually saw sales shrink significantly.
Given the content of the article, you would think vendors across the board would be lining up to download the research and send it off furiously to their clients and prospects as a plea for validation (“how’s that for ROI?”).
While the research was directed specifically at the marketing and sales functions for distribution, beneath the surface of the report’s eye-catching statistics is an iceberg-sized lesson in successful approaches to technology investment in the asset management industry.
Does the technology you’re considering solve a problem your firm has?
As they look to implement new technology, firms stumble when they fail to ensure that data systems are ready and do not properly identify where the technology will have the biggest impact on the firm. This is called out specifically in the report.
“Firms are falling down on execution and building things that the distribution organization can actually use,” says report co-author Jeff Levi.
Can technology have a substantial pay off? Absolutely. But it has to be done correctly.
Does the technology you’re considering fit into a strategic plan at the firm level?
According to the report, capitalizing on technology investments means not only looking at a way to make existing processes more efficient but to devise new, more collaborative distribution models. So for firms embarking on wide-scale IT transformation projects to fundamentally change their businesses, a holistic approach isn’t just an option. It’s the option.
Technology investments need to be considered across the organization in order to fully realize the benefits and need to be a part of the strategic direction of the firm.
Citing Ignites’ interpretation of the report, “technology is only useful within the context of broader changes to talent, organization, and processes to incorporate the insights from the technology into sales strategy.”
Reimagining the vendor relationship
The impetus for technology investment needs to directly alleviate a pain point or must be part of a strategic overhaul of a legacy process, or processes, that are no longer sustainable. The third component is finding the right vendor that can help you achieve your technology-based goals.
At Delta Data, our mantra is all about helping clients stay ahead of the change. It’s not a new concept to us, but the clients we work with that have the greatest success are the ones who see us as more of a partner than a technology vendor. When we’re embedded into a firm’s strategic plan, we are able to chart the course together and make it a collaborative process. Over time it becomes a symbiotic relationship; they gain an experienced guide in Delta Data that’s working closely with the tech day in and day out, and we gain a valuable source of industry feedback that influences where our next innovation needs to be.
Research reports that validate the value of technology from time to time are nice, but it’s ultimately the success of our clients that proves our worth. To be honest, I wouldn’t have it any other way.
Whitfield Athey is CEO of Delta Data Software. His role at Delta Data is focused on growth of the product base, satisfaction of clients and scalability of the organization.