Portfolio Monitoring & Data Outsourcing: What’s Best for Your Business?



For many managers today, the list of issues is long:

  • Silos. 
  • Disparate systems.
  • Legacy software that you don’t want to give up.
  • Excel spreadsheets scattered on shared network drives.
  • Individual hard drives destroying your information landscape — despite countless emails asking (or even demanding) that users adhere to policy.

Some (or all) of these issues lead to frustration for upper management, who can’t seem to get a consolidated portfolio report that makes sense.

So what can you do? Before we answer that question, let’s take a moment to recognize why your portfolio monitoring is so important.

Portfolio monitoring — and why you need It

Portfolio monitoring is no longer an optional convenience in your overall corporate strategy. In today’s market environment, it is becoming a critical component of successful businesses.

Technology professionals are under increasing pressure to operate more effectively. And there’s a growing focus on streamlining operations and reducing costs. Relying on a stitched-together package of manual Excel spreadsheets doesn’t cut it anymore.

The industry is starting to understand that data — by itself — is actually useless. But when you’re able to organize data into relevant, actionable information, then you have a valuable commodity.

That’s portfolio monitoring — turning numbers into insights. Armed with these insights, you can make strategic decisions with confidence. Can you look at a consolidated report and say where everything came from? Most large corporate companies cannot.

This problem is mainly due to that long list of issues above. And to handle those issues, you may want to consider outsourcing.

Why outsource?

In these times of economic instability, corporations need to be flexible — especially when it comes to staffing. Hiring a full team to handle your essential portfolio monitoring needs might not be the most cost-efficient way to go.

Utilizing an effective outsourcing model with a qualified vendor allows for the rapid scale-up or down of resources virtually on-demand. Compared to a traditional hiring cycle with a comprehensive search for the right employees, you could be months ahead of the game using a focused outsourcing strategy.

In a large global corporate environment, outsourcing can leverage best practices that may be more difficult to achieve. Outsourcing can lead to attaining a greater expertise, lower costs, and higher quality.

Plus, it can also free up top in-house talent and allow them to focus on more strategic corporate endeavors. These outsourced resources are an extension of your company and are sometimes referred to as the “extended enterprise.”

A brief outsourcing case study

A large insurance company with a sizable international portfolio — comprised of direct real estate investments, debt, and CMBS derivatives — was having great difficulty in normalizing and summarizing their risk exposures. Disparate systems, timing issues, and FX fluctuations complicated this problem.

The company’s portfolio monitoring team (entirely comprised of internally funded FTEs) couldn’t deliver the analytics required to manage this business accurately — or in a timely fashion. Delays and cost overruns were the norm.

On top of all that, consider the pressures involved with the internal political ramifications of this team operating in a large company construct. Team leaders were hesitant to aggressively realign staff, as that might be considered to be a negative reflection of their own management abilities. So the team struggled on — and as a result, productivity further eroded.

With an annual internal seven-figure run rate (excluding benefits and other incentives), the insurance company could no longer substantiate the cost involved — nor the risk factors associated with reporting inaccurate data. Clearly, they were a prime candidate for a managed outsourcing strategy.

So the company engaged a portfolio monitoring outsource firm with extensive domain experience in both real estate and alternative assets, and was able to move this critical reporting function exclusively to them. As a result, they reduced their operating costs by half. The political pressures that hampered progress were now alleviated, as the company was now able to hold their vendor accountable.

The key to this scenario was the successful integration of the vendor into the internal workflow process. They brought them into their internal trouble ticket system, included them in all conference calls, and made them feel like true partners in the development effort. With vigilant monitoring, integration can be a smooth transition.

The five steps to successful outsourcing

  • Strategic assessment

Decide why, how, and in what form the outsourced service supports your business strategy. Sometimes components may be better handled internally; not everything is a candidate for outsourcing.

  • Business case development

Why am I doing this? Will this be worth it? The answers will come from analyzing your expected cost savings, as well as other financial and operational benefits of the initiative. Hire an experienced consultant to help you.

  • Vendor selection

If you think you’re choosing a vendor, you’ve already failed. You’re choosing a strategic partner. Also, keep in mind that “bigger” is not always better. Small- and mid-sized firms might give you more personalized service.

  • ContractIng

Make sure it captures the needs and expectations of both parties. Compliance and risk factors must be addressed in detail.

  • The big transition

Actively monitoring the migration is the name of the game. Strict measurement of initial performance will stave off risks that could pop up down the road. Be aware that failure to proactively manage this phase of the implementation of the outsourced service could lead to decreased service levels, cost overruns, compliance difficulties that were not contemplated previously, the need to switch vendors, or — as a worst-case scenario — bringing it all back in-house.

Alternatively, a well-implemented outsource transition will deliver cost savings and newfound flexibility with a scalable resource pool.

Rely on a leader

If you’re considering an outsourcing strategy for your portfolio monitoring, talk to the team RealPage®. Focused on maximizing technology investments, our team of subject matter experts has vast experience providing institutional real estate owners with data services, data analytic solutions, and multi-year operational and technology road maps.

Learn more about RealPage Asset & Investment Management.

Have a question about our products or services?