How to Calculate the ROI of Investment Office Software

As the Chief Investment Officer (CIO) at an institutional investment office evaluating whether or not to modernize your investment office technology, you know intuitively that modernizing technology will bring value, but how much value? What is the actual return on investment (ROI)? To make the business case for spending money in the technology budget, you need to know if the outcomes will be worth itThat has been hard to determine – until now.  

Four Perspectives on Value

Ken Akoundi is Founder and Chief Knowledge Officer of Cordatius, LLC, a project management consulting practice that helps the investment community optimize policies, processes, technologies, and operations. To enable investment offices to determine the true ROI of technology modernization, he assessed such initiatives from four complementary perspectives and documented his analysis in the white paper, Is It Worth It? Here is an overview of his findings:  

The Qualitative Perspective 

An investment office functions on a series of processes. Akoundi examined the impact of technology modernization on investment and operations processes (e.g., asset allocation), analytics processes (with special attention to liquidity analysis and cash flow forecasting), and reporting processes 

Key finding: Improvements in technology have a “Positive Impact” or a “Very Positive Impact” across the board. 

The Human Efficiency Perspective 

To get down to dollars and cents, Akoundi created a robust model based on a realistic investment office. He factored in assets under management (AUM), staff and salaries, standard tasks and the time spent on them, and other considerations. He then assessed the ROI of typical use cases such as establishing a data warehouse to create a single source of truth, streamlining data processes, and automating tasks such as loading documents or finding files.  

Key finding: Total savings from modernization could be up to 14% of the annual payroll, of which the lion’s share (11%) - surprisingly - is the result of implementing better qualitative technologies.  

The Technology Cost-Savings Perspective 

Using the same investment office model, Akoundi calculated “before modernization” and “after modernization” technology costs. In the example, it was assumed that the investment office would implement a quantitative system (i.e., “one tech for all assets”), a document management system, and a workflow/research management system. 

Key finding: On average, modernization contributed 0-10% additional technology costs – an unexpectedly low figure. 

The Hard-to-Measure Perspective 

Some outcomes from technology modernization cannot be quantified in terms of time or money, but are significant nonetheless. Akoundi provides guidance for investment offices to determine how getting information faster or having better data would impact their business. For example, he recommends considering the value of having up-to-date data at your fingertips at all times, never missing a capital call, or processing more managers per year.  

Key finding: Even “intangible” benefits can be assessed and incorporated into the business case for technology modernization.

Measure the ROI for Your Office

The impressive value that technology modernization offers coupled with its essentially cost-neutral budgetary impact answers the question “Is it worth it?” with a resounding affirmative. Akoundi’s detailed model and analysis provides solid numbers to support the intuitive sense CIOs have long had that addressing technology concerns is a worthwhile exercise.  

Download Ken Akoundi’s groundbreaking report “Is It Worth It?” today. You can apply the model to your own investment office to calculate the ROI you can expect from a technology modernization initiative. With this data in hand, you can build a strong and well-supported business case for moving your office technology forward.




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