Alex Strekel
Director, Investment Management Solutions
Alex Strekel joined Clearwater in 2015 and leads a team of business development professionals who specialize is solving operational, accounting, and reporting challenges for asset managers. Alex and his team focus on the key trends impacting the markets and help managers find custom solutions that address both market- and firm-specific needs to provide scale, accelerated growth, and improved margins.
Alex has more than 15 years of experience in financial services, allowing him to consult with all aspects of asset management operations. His career began in market data with Thomson Financial, transitioning to operations and trading with Fidelity; prior to Clearwater, he managed fixed-income portfolios at a Connecticut-based asset manager.
Alex is a graduate of Bates College in Lewiston, Maine and lifelong Connecticut resident. He currently resides in Old Lyme, Connecticut with his wife, son, and daughter, along with their two cats. When not working, you can find him spending time with his young family, keeping active, or attempting his latest “home improvement” project.
As the calendar has now fully turned to 2020 and tax season is upon us, the idea of making a change of any size can be daunting.
This is one of the reasons we try to stress that making a move to an operational platform like Clearwater has to do more than just change and improve your operating model. It has to be accretive to the business, creating a benefit in terms of ROI through the lens of a total cost of ownership.
In short, it can’t just improve client reporting, speed up reconciliation, or more accurately invoice. Often to drive change, it needs to run across multiple groups.
Amidst the stress of year-end, closing for Q1, and setting strategy for 2020 – and myriad other priorities – why do firms move to new operational platforms in Q1 and Q2 versus waiting until the end of the year? The answer is simple: It’s SaaS.
SaaS Is Not a Storage Model, It’s a Delivery Model
Too often we find SaaS to be conflated with cloud. Cloud is a storage model, and while certainly superior to hosted, onsite software, it is merely a mechanism of moving storage from onsite to a vendor. Five years ago many firms struggled to move to the cloud due to a perceived lack of cyber controls, but now with enhanced audit controls, authentication and access oversight, and rigorous threat testing, most solutions have been successful in overcoming this rebuttal.
Many solutions are now cloud-based, but to be cloud-based and SaaS involves several key elements you don’t get just by moving your servers to the sky. These are the features that set SaaS apart:
- A subscription-based cost model that charges you for what you use
Allows for economies of scale to firms of any size
- Owned and maintained by the vendor
No more patches or installs that involve shutting down your servers or staying late to test
- Scale and access
Because most SaaS solutions leverage strong peer networks internally amongst their users to create scale, you benefit from the same data quality and technology that the provider’s largest client uses, while allowing access specific to your users and clients. Most SaaS firms do not charge per-seat licenses like legacy solutions.
- Integrations
SaaS is not only cloud-based but also supported with service. Part of that involves integrating with aspects of your current model you won’t leave behind – like an order management system or CRM. Because SaaS solutions run off a single version that is continually updated, there is no versioning that breaks existing integrations. That means you don’t have to worry about updating multiple systems to stay current.
- SaaS drives holistic cost of ownership
ROI is a complicated and often difficult term to define as it relates to an initial spend. Particularly with SaaS, where the implementation, service, deployment, and contract model is so different than what most legacy providers offer. However, when the conversation focuses both on the operational efficiency sought by the ops team, in combination with greater flexibility for portfolio managers around reporting, and lack of required support from IT resources (which for many small firms involved external consultants), a firm-level benefit can more clearly be found in moving to SaaS. For many firms, this is in scaling to support more clients, equating to higher revenue with less operational overhead and IT expense. We still strongly believe in operational technology as an investment – but it’s often easily seen as to how to justify the investment by looking at the costs.
- Cloud is the norm, SaaS is disruptive
In a 2019 survey of investment managers, conducted by Clearwater, 45% of respondents said they were considering a move to cloud in the next 24 months, and 43% had already deployed a cloud-based solution somewhere in their business. In the same survey, two-thirds of the respondents cited manual processes or hybrid processes (manual/system based) for their operations. If 43% have already deployed a cloud solution, why is it manual processes perpetuate? In a SaaS model, you gain the efficiency of an outsourced model with the support and expertise of in-house experts. It bridges the gap between fully outsourced – often expensive and irreversible – and legacy solutions. It is truly sustainable, disruptive technology that delivers a competitive advantage in a fee-compressed environment.
Returning to where we started, change is hard – so why not get it right. In our survey, 99% of respondents indicated that the corner office would be the one making the decision, and the primary reasons for doing so would be operational efficiency and cost. SaaS allows you to make the case to do both – and with most of these processes taking anywhere from three months of consultation and six months for implementation (depending on size), having these conversations now positions your firm to move to SaaS for 2021 and gain all the benefits cited above.