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Addressing TPA Operational Challenges With Business Process Outsourcing

By Bill Byerly, executive vice president & general manager, SunGard's wealth & retirement administration business.

    

Retirement administrators attempting to improve service to customers are looking to implement comprehensive service delivery methods that allow them to offer 24/7/365 support. These centers of excellence promise to serve participants and sponsors by continually monitoring jobs, ensuring critical processing deadlines are met, and providing immediate access to product development teams who can resolve issues.

To set up service centers themselves, providers would need to build facilities and hire large teams of employees for operational support. These are expensive and frequently pull resources away from core services.

Providers are challenged to hire, train and retain high-quality, engaged employees with the latest retirement industry and technology knowledge to manage back-office processing. They may also need easy access to additional resource bandwidth to accommodate peak processing times, such as enrollment months -- or simply to manage the growing number of retirement disbursements.

Business process outsourcing (BPO) gives providers the opportunity to outsource common back-office functions. BPO includes hosting software and delivering staffing services that can include mail room operations (e.g., scanning, sorting, posting); data entry for plan setup and participant data; transaction processing and recordkeeping (e.g. trading payments, disbursements and reporting, document preparation, and government form submissions). Outsourcers often have flexible, customized solutions that allow providers to use the best of their own and the outsourcer's capabilities. By taking advantage of BPO, record keepers can:

  • Generate revenue streams -- BPO can help generate revenue streams by improving cycle times and reliability of key business processes. These services also increase flexibility to scale operations based on market demands and legislation.
  • Focus on value-added activities -- Retirement administrators can outsource back-office services that add little value to the client. As a result, they can focus on servicing constituents, educating participants, building strong relationships and exceeding service level agreements (SLAs) for participants, sponsors and advisors.
  • Leverage global centers of excellence -- Providers can leverage global service centers that are staffed by people with deep expertise in the retirement industry and equipped with the appropriate technology for continuous (24/7/365) job monitoring and critical issue resolution.
  • Leverage highly qualified employees -- Record keepers can reduce the stress of finding and retaining high-quality engaged employees with higher skillsets, as well as the training and hiring costs associated with staff turnover.
  • Eliminate cumbersome workflow -- Many of the tasks associated with daily recordkeeping are repetitive in nature. BPO providers can streamline these processes by automating workflows based on proven procedures and implementing lean, six sigma teams to reduce costs.
  • Reduce Overall and CapEx costs -- BPO can significantly reduce operational costs by performing them in a more efficient environment, including leveraging on- and off-shore destinations for service delivery. Additionally, providers can take advantage of existing global data centers for a monthly subscription cost rather than having to build, equip and staff them on their own.
  • Operate in a transparent environment -- An outsourcing organization prices their services by the participant and sends a statement, which details participant costs. This enables predictable cost models for participants, allowing providers to adhere to fee disclosure regulations. Ironically, it can be difficult to track costs when data centers are implemented and managed internally due to numerous hidden costs.
  • Mitigate risks -- BPO can provide in-depth industry and system knowledge across all processing areas. All processes are monitored and exceptions are immediately reported to the front-line management team (which provides training and oversees all processes) and the provider.

William (Bill) Byerly is SunGard's executive vice president and general manager for SunGard's Omni solutions and managed services operations for SunGard's wealth & retirement administration business. With more than 30 years of experience, Bill has built scalable, comprehensive, and highly productive service delivery teams and platforms, including ten years of experience in off-shore and near-shore operations involving off-shoring work to India and within the U.S. as well as direct oversight of the off-shore resources. Bill can be reached at Bill.Byerly@sungard.com.

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