As wealth and asset managers navigate an increasingly dynamic landscape, the ability to adapt and scale operations is critical. A well-designed Target Operating Model (TOM) puts in place the capabilities to achieve this, and build competitive advantage in the market.
A TOM aims to integrate and balance People, Process, Technology, and Data to so the company in question can meet is strategic goals. It should build on existing strengths and capabilities already in place, ensure continuity, and facilitate growth.
Here’s why this framework is essential; why it any investment in tech should be considered in the context of the TOM; and how Point’s Investment Data Intelligence (IDI) platform provides the foundation for a flexible TOM tailored to business growth.
What is a Target Operating Model?
A Target Operating Model (TOM) represents the blueprint of how a business operates to deliver its value proposition. It encompasses four core components:
- People: Talent and roles required to execute processes and decisions, including in-house teams and outsourced partners.
- Process: Defined workflows that connect people, technology, and data to create efficient operations.
- Technology: Solutions and systems that enable certain processes to be automated.
- Data: The lifeblood of decision-making, including client, market, and operational data.
When these components are balanced, a TOM enables the seamless delivery of services to clients.
Why Start with TOM Before Investing in Technology?
- Building on What Works
A TOM is not created in isolation. It must consider what is already in place—systems, processes, and practices that function effectively and support business goals. Elements that are already working well should be retained and integrated, avoiding unnecessary disruption to established workflows.
- Avoiding Misaligned Investments
Jumping into technology investments without a clear TOM can lead to silos and inefficiencies. A TOM ensures that technology choices align with each other, with strategic intent and with operational needs.
- Data as a Separate Pillar
Data is often conflated with technology, but they serve distinct purposes. Technology processes data, while the quality, accessibility, and structure of the data itself determine the effectiveness of operations. Separating data from technology in the TOM design phase helps businesses ensure data is usable across different systems.
- Maintaining Business Continuity
Designing and implementing a TOM should not disrupt business as usual. A good TOM plan outlines how changes will be achieved with minimal interruption, ensuring continuity in client service and operational delivery.
Designing an Agile and Flexible TOM
To future-proof operations, wealth managers should focus on the following principles:
- Capability Mapping: Define the capabilities required to meet current and future objectives. This includes client onboarding, portfolio monitoring, analysis, relationship management and compliance.
- Integration by Design: Ensure that processes, technology, and data flow smoothly across all functions.
- Scalability: Build systems that can handle increased volumes of clients, data, and transactions as the business grows.
- Iterative Adaptation: Implement a modular approach that allows for upgrades or adjustments as needs evolve.
- Minimizing Disruption: Clearly plan how new components of the TOM will be integrated alongside existing elements, maintaining operational stability.
How Point’s Platform Supports TOM Design
Point’s IDI platform provides a solid foundation for building and maintaining an effective TOM. Here’s how:
- Data Integration: The platform aggregates data from multiple sources (e.g., custodians, market data providers) into a unified Investment Book of Record (IBOR), ensuring accurate and timely insights.
- Flexible Tech Ecosystem: Point’s platform integrates seamlessly with existing and new technologies, enabling a hybrid system tailored to specific needs.
- Visualization and Analytics: It offers tools for client reporting and decision-making, reducing the reliance on manual processes and Excel-based models.
- Adaptability: As a modular solution, the platform evolves with your business, supporting new capabilities and expanding with scale.
- Continuity and Efficiency: The platform ensures that integration into an existing TOM is smooth and does not interfere with ongoing operations, enabling you to transition seamlessly.
Conclusion
A robust TOM is the bridge between a company’s strategy and its day-to-day operations. By focusing on People, Process, Technology, and Data, wealth managers can design systems that not only meet today’s demands but also adapt to tomorrow’s opportunities.
A good TOM respects existing systems that work well, minimizes disruptions, and provides a clear roadmap for implementation. With Point’s Investment Data Intelligence platform, businesses can integrate the components of their TOM to create a system greater than the sum of its parts, unlocking efficiency and growth.
