Archer Insights

Using Operations to Prepare for the Future

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A version of this article was originally seen in Ignites: “Invest in Ops or Risk Obsolescence,” January 16, 2018

The investment world is subject to continual change. Investors seek new opportunities for growth and risk management, managers seek an edge through product and process differentiation, and external regulations change to accommodate evolving concerns. Every day, firms are faced with trying to operate in the present while simultaneously readying themselves for the future.

History has shown that building new products and increased distribution opportunities can come at a cost, such as lower fees and increased compliance requirements. Yet experience has taught us that for firms seeking to successfully navigate an uncertain future, operations can provide a strong foundation to prepare for the unpredictable. While the operational side of an investment management firm may have flown under the radar in the past, it is now called upon to streamline processes for an undefinable future. This is evident in the fact that more than half of responders to an Archer survey of 20 investment professionals indicated that investment management operations will require a radical overhaul within the next three years.

Without knowing precisely what the future holds, firms can take steps to ready themselves to take advantage of opportunities brought about from change. Below are three constantly evolving areas for which operations holds the key to future success.

Investor Demand

When asked what would be their primary driver for AUM growth over the next three years, 40% of responders to our survey said organic asset growth, with the next two most frequent responses being new product introductions (20%) and expansion of distribution channels (20%). In order to capture this growth, managers need to be able to offer the products that are in demand.

It is a travesty when an investment firm is forced to turn away opportunities because it isn’t equipped with the technology or operations expertise to handle a product it wants to offer either now or in the future.  The right operational alignment is required to support new products and thereby broaden their potential client base. This operational alignment takes one of two forms: a siloed structure where new systems and operational experts are added as new opportunities arise – which can increase the complexity of operations with each opportunity – or a single, scalable solution where operations are supported by flexible, product-agnostic technology and expertise. The latter option provides an important benefit of costs that scale with growth, thereby aligning resources with success.


Technology continues to advance at a very rapid pace. Ongoing improvements and lowering costs for memory capacity have fueled advances in programming. This has even led to real discussions of how artificial intelligence may be applied to business applications. There can be real, measurable operational advantages to using the latest technology – with reduced costs and increased scale at the top of the list – and successful firms position themselves to take advantage of this innovation.

Despite the advantages of technology change, many firms continue to rely on legacy technology due to the complexity and cost of converting to a new system. This was reflected in our survey, where integrating new technology was indicated as the biggest operational challenge facing investment firms.  Without frequently updating technology infrastructures and the processes to support them, firms risk obsolescence.  Failure to innovate in the middle and back office hinders front-office innovation, and makes it difficult for firms to simply keep up with new opportunities.  In that way, we make the argument that operations is the engine that powers innovation.

Regulatory constraints also play a role in this evolution.  Outmoded operations are simply not flexible enough to handle the volume and frequency of changes in regulatory requirements. And their processes may not be compatible with the new technologies needed to produce the granularity of information required by the regulatory regime. Like trying to use an abacus to calculate the square root of 372, a mismatch of innovation between technology and operations just doesn’t work.


Some investment professionals and their firms may associate operations only with the expense side of their ledgers.  They pay for it because they have to.  Nearly one-third of our survey respondents indicated that operations is “something we have to do.”  Yet Archer has shown that operations offers an opportunity to respond to and accommodate investor preferences.  In the past, entering new channels carried a high cost of entry because it automatically meant hiring a new, separate staff to handle operations for that channel.  By investing in solutions that are scalable and developed with flexibility and opportunity in mind, firms won’t have to scour for people who know how to run a specific, sometimes obsolete system.  This frees up capital – both financial and human – that firms can then reinvest or redeploy to work in their favor.

The Bright Side of the Future

We can’t look into a crystal ball to predict where exactly the investment management world is going – or what it will look like when we get there.  What we do know is that in the absence of a clearly defined picture, investment management firms should do everything they can to ensure they are able to handle whatever the future may bring – whether it’s new investor demand, technological innovations or resource realignment.  Our unknown future will be the present reality before too long.  A strong operations department is the key to making it there successfully.

Bryan J. Dori
Bryan J. Dori

Bryan Dori, President and CEO of Archer, has guided the company to become an industry leader in operations, technology, and client service. Having spent his career building solutions that streamline every stage of the investment lifecycle, he has transformed Archer’s business by expanding the firm’s scope of services to help managers meet demand for increased customization. Under Bryan’s leadership, Archer was named 2020 winner of the WatersTechnology Best Outsourcing Provider to the Buy Side award and one of the Inc. 5000 fastest-growing private companies in the U.S. In 2021, Archer’s former private equity investor, NewSpring Capital, inducted Bryan into its CEO Hall of Fame. He is often quoted in the news media on financial trends and regularly blogs on Archer’s website.

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