Tracking the Changes in Successful Vendor-Client Relationships in the Investment Management Industry

Over the past 10-15 years there has been a marked change in what it has taken to be a successful technology vendor in the global investment management industry. Increasingly, today’s successful vendors need to operate as trusted partners with their clients offering far more than simply selling software.

The Evolution of Successful Vendor-Client Relationships

By Arun Sarwal

The global investment industry has seen a marked shift over time in how vendors conduct their business away from a purely transactional approach to one which is much more relationship-driven. This evolution has been brought about by a variety of factors. In part it has been necessity-driven; markets have become ever more competitive through the emergence of new technologies and vendors, compounded by difficult economic times throughout many regional markets. Consequently, the solutions offered by vendors have had to provide more discernible value to their clients.

Vendors have focused on cross-selling and upselling within their client base which has only been feasible by treating clients well, meeting their needs, being responsive to changing demands and being committed to maintaining high levels of client satisfaction. At the same time, there have been clear changes on the demand side; investment firms have demanded more from their technology providers and now routinely expect vendors to offer complementary capabilities over and above straightforward software delivery, such as testing, consultancy and a range of deployment solutions, such as managed services and even BPO.

An often over-looked issue has been the steady improvement in the number of successful technology implementations in recent years. Vendors, conscious that relationships have become ever more important, have had to focus on demonstrating strong discipline around quality of software code being written, robust project management on engagements and reliable implementation capability in order to preserve their reputation in the marketplace and, importantly, those of sponsors at their clients. There are certainly far fewer failed projects reported in the industry press compared to previous years.

Further evidence of the shift in emphasis towards relationship management being critical can be seen in the organisational level at which vendors are typically now engaging with their clients. Whilst previously relationships would have been with middle management IT staff or were tactical engagements, increasingly more interaction is now at C-suite and senior management level as technology has become of strategic importance to investment firms. Additionally, the days of the in-house technology team “knowing best” is on the decline in all parts of the world as investment firms seek new ideas and external perspectives in a bid to optimise their operations and differentiate themselves against their competitors with rapid speed to market.

Gaining strong relationships and trusted adviser status is hard won and easily lost. Essentially, and no matter what else is involved, people are buying the strength of other people. An effective, successful software solution depends on the diligence of the people that code it, the professionalism of the people that implement it and the responsiveness of those that provide support. The standards and quality of these are, in turn, driven by the culture and ethos of the management of the organisation to which they belong.

Both vendors and their clients need to ensure that the cultural and strategic fit is right. Early engagement between key people on both sides during the sales process for any project, whether strategic or tactical, is vital and will always mean there is a greater chance of success. Firms who invest the time and establish whether that fit exists stand the best chance of enjoying a long-term, prosperous relationship with their vendor.

Arun Sarwal
SSC Technologies – HiPortfolio & Anova

The views expressed herein are those of the author and do not necessarily reflect those of SS&C.

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