Outsourcing developed as an industry in the 1980s, where a business merely moved an operation previously conducted internally to an external supplier for cost-optimization. In the early 2000s, outsourcing became more ‘strategic’, shifting the focus to accessing external value-added expertise to support business objectives rather than the simple cost optimization prioritized earlier.
Today, outsourcing has become ‘transformational’. The service provider is an organization’s extension that helps the business re-engineer business processes, operations, and systems to save costs, gain a competitive edge, and function more efficiently.
However, choosing the right outsourcing partner is essential, especially in the retirement plan sector, where business needs and compliance requirements are strictly enforced and constantly changing. So when you choose an outsourcing vendor, keep these points in mind.
Understand and evaluate the nature of their expertise and the skill set they bring to the table. Determine their knowledge of your industry.
The world’s largest retirement market is the US, with around $39.4 trillion in assets held under retirement-related accounts. Rules and regulations in the retirement services industry are constantly in flux, and a lot of plan maintenance recordkeeping is needed.
Congruent Solutions has been a partner for Record keepers, Plan Providers, and TPAs since 2004, so we understand the nuances of Retirement Plan Administration and the market’s specific needs.
Data security is paramount today. When it comes to outsourcing, remember that you will be sharing sensitive customer data with your service provider, so you have to be sure the data is not compromised. Ensure the vendor is aware of privacy policies and security measures.
For instance, Congruent’s Outsourced Plan Administration services follow stringent security practices with no data downloads, a sterile workplace, VPN-based connections to client systems, and no tasks performed on local machines. These practices and more have helped us achieve ISO 27001 certification for data protection, SOC I Type 2 certification for internal controls for financial reporting and SOC II Type 2 certification for internal controls for customer data protection.
If you are looking for an outsourcing partner long-term, you need to go beyond their skill set and understand if they share your outlook toward business.
A service provider may have the latest technology at their fingertips and the most innovative tools, but if they do not share your business outlook, it will be detrimental for you as a retirement planner, where customer experience and satisfaction are important.
A third-party vendor does not have to be backed by great advertising but by excellent customer reviews. You can learn about a vendor’s reputation based on client opinions. Do ask for references from the outsourcing partner.
Testimonials and case studies are good places to start researching your vendor before outsourcing. You can check out case studies where Congruent’s CORE solutions helped a Fortune 500 retirement plan provider deliver better CX to its plan sponsors.
Finding a reliable service provider can be challenging, especially in an industry as nuanced and evolving as the retirement sector. But by carefully choosing your outsourcing vendors, you can add considerable value to your business efficiency. If you’d like to know more, do get in touch with us.