Case Study: Fast-growing funds administrator gets strategic about services

With a three-year, 30 per cent customer growth target in its sights Orion Fund Services has invested $1 million to automate the back-end systems in its fund services administration business.

A wholly-owned subsidiary of insurance group Zurich Australia, Orion Fund Services is a third-party administrator (TPA) for financial services companies. Orion's current clients include Zurich Australia and Strategic Investments Australia.

Orion provides administration services through a utility-style model. Those services include document management facilities such as mail collection and distribution, banking, and document scanning and identification; member record-keeping through full processing for personal and corporate superannuation products, allocated pensions, master funds and investor-directed portfolio services, client and statutory reporting, inbound and outbound calls for clients, and ad hoc management services.

According to Orion's chief executive Stuart Robertson, convergence of the traditional employee benefit and asset management markets was also a key driver for implementing a workflow management system recently.

To meet these market needs, it was imperative that the company replace its back-end clerical processes and operations in order to compete in a changing climate. "TPA providers need to be able to provide cost-effective and efficient services across both sectors to be considered a true administrator," Robertson said.

With annual revenues of $5 million, one of the company's core objectives over the next three to five years is to reach mid-market scale by growing from 200,000 individual accounts to 500,000 accounts. This would equate to revenues of around $25 million, according to Robertson.

Previously, Orion used a completely paper-based system for administration services.

However, after going live with a workflow management solution in April, the company overhauled its manually-intensive system for reporting and administration processes.

Orion's new workflow management solution is an end-to-end tool developed by US financial solutions company DST International. Orion is using the Automated Work Distributor software products from DST's HiContact suite. The solution is a knowledge management tool with straight-through processing technology to deliver the full administration service fulfilment process to clients in real time.

According to Robertson, it enables users to track the status of all business flows, which he said was crucial in a production environment as staff need the ability to see in real time where they allocate resources.

Roberston said one of the best features of the solution was its ability to scale, thus enabling the company to plan for fast customer growth.

In terms of configuration, the solution required only a low level of development, "leaving the power in the hands of the business analysts rather than technologists behind the scenes", he said.

The project is being rolled out in three phases.

Completed in April, phase one was focused on using the workflow management system to scan electronic images of all paper and invoices from clients, then feeding the data retrieved into different parts of Orion's business. "Sometimes important papers or invoices can be hidden in someone's draw or on a desk, but this solution replaces our historical processes. Through it, we increase our productivity as it has a real-time data registry component for asset management clients," Robertson said.

Phase two, which began last month, saw Orion's project team round out the data capture points in the system to incorporate fax and e-mail into workflow. The team will also introduce smarter components -- like business rules -- into the system.

In the third phase early next year, the company will install a feature giving users Web-based access to the system. Robertson said this is primarily to allow Orion clients to track the workflow of TPA activity on their accounts. Also, the Web feature will link into other business systems -- an SAS database for managing superannuation clients, and Capital, an application for superannuation administration by Synchronised Software -- to consolidate information on total business workflow with different business units, Roberston said.

By using those extra features he expects business efficiency to increase by 20 per cent, as they will integrate all lines of business into day-to-day processing, making those processes more transparent to users and clients.

Because the company operates on a cost-per-member basis, administration becomes a very expensive service to offer members, therefore the company is aiming for less administration in order to provide better service, Robertson said.

He added that because the average asset manager aims to have the highest quartile performance, in turn, Orion must provide them with a consistent level of service.

"This system allows us to give continuity in service, because it replaces a completely paper-based system," he said.

"It improves our service levels in terms of management, transparency in process, and delivering solid service."

Orion's total investment in the project was $1 million. Robertson said he expects to see a full payback within 18 months.

He said the rollout has been a success because the company took the opportunity while implementing to fundamentally change its business through technology. "Deploying this system was a chance to demonstrate how it could help us as a business get to where we want to go in a few years."

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