Following its purchase last year by SS&C, Advent has jumped into hosted technology and outsourcing services by revamping its limited On Demand offering into a robust set of Advent Outsourcing Services (AOS). While many buy-side shops have moved incrementally toward fully hosted platforms, a handful of early AOS clients show how a mature and deliberately structured offering can make a huge difference in today's operating and regulatory environments.
Cloud-enabled co-sourcing arrangements ─ whereby investment managers work with providers on large swaths of their operations, usually across multiple systems ─ had a nice head of steam a few years ago, though Advent intentionally remained on the sidelines. As several experts said at the firm's 2016 Deliver conference in San Diego, the reason was simple: Advent only does things it feels it can do exceptionally well. With the company's historical strength in software development rather than services, there was little cause to push the envelope.
That all changed with the addition of SS&C's cloud delivery and operational services acumen, and AOS was introduced in late 2015 to meet clients' widening spectrum of preference around technology hosting. Now almost a year after its introduction, a growing collection of Advent clients ─ often using several Advent offerings including Geneva, Advent Portfolio Exchange (APX), Moxy OMS, Advent Rules Manager, and Advent Revenue Center ─ have headed in the direction of enhanced hosting or fully outsourced services. And many are the boutique and mid-sized shops with bespoke operating models that are traditionally more reticent to see these functions go out-of-house.
The AOS solution provides efficiency, scalability, and services expertise. It's one reason that those using native Advent solutions, or extending the solution set with other products including SS&C Recon and Varden, filled the panel discussion at SS&C Deliver. AOS was developed with an expectation that clients exist within a spectrum and have different needs, tolerances and interests in moving toward full outsourcing. In order to cater to those clients, the solution was built with flexibility of choice as to which operational services are outsourced, or the lighter-touch enhanced hosting services option allows shops to keep a wide range of functions under one roof. For those using AOS, then, the potential goes beyond managed infrastructure for standard reconciliation and reporting functions into reference data flow from third parties and managing performance calculation-all with daily status updates.
More than that, many Advent users have co-sourced with Advent informally for years without really knowing it. Because Advent users are sophisticated investment managers, their needs and challenges can change over time, often with Advent and consultants being brought on to solve for those changes. Some are small shops worried about overgrowing their headcount with a new book of business or merger; others might be geographically located in a way that they cannot retain the right talent, or have a new global investment strategy that allows only a few hours to prepare the next trading day. Within this context, they will all have different notions of what may sit outside the shop, and what may not.
The idea with AOS is to use what Advent already knows about the client and meet these specific needs. After just a year, the diversity of clients leveraging this offering speaks to the customized needs they each solved with Advent, demonstrating a new and unique perspective on the software-as-a-service (SaaS)-based delivery model.