Benchmarking outsourced services for an institutional European asset manager

Benchmarking outsourced contracts offer clients an opportunity to compare how their supplier is performing against the market from both a cost and service perspective.

The challenge

Our client currently has a dual provider model for their Luxembourg and domestic fund ranges for fund administration and custody. With ambitions to grow rapidly in both markets, our client commissioned Catalyst to provide insight into the competitiveness of both providers against a broad range of peers in the Catalyst benchmarking universe.

Our approach

Frequently, benchmarking exercises are backward looking, taking historical data on supplier performance and comparing against a vast array of market data. Whilst this may raise some interesting points on cost and service levels received, we believe a benchmarking exercise should be holistic, collaborative with the supplier, and forward looking. In addition to benchmarking all costs by service line, SLA/KPI levels and actual service received, we take a more qualitative approach to align our clients’ businesses with recent outsourcing deals and trends in the market.

Our impact

We analysed our client’s existing outsourcing contracts from both a cost and service perspective. First, we deployed a broad approach to benchmark current fees against the wider Catalyst universe. Then we deployed a more focused approach using a select group of peers that best fit our client’s business to pinpoint specific areas to target in future negotiations. As often seen in the market, existing KPIs for our client are operational metrics too focused on the service provider. With our experience in negotiating outsourcing contracts, Catalyst are well placed to define market-leading standards that are aligned to our client’s business and growth ambitions.

Note: This case study was first published by Catalyst prior to the Sionic merger

Our experts

Sung Hyun Lee

Principal consultant