The Total Economic Impact™ Of SimCorp One

Cost Savings And Business Benefits Enabled By SimCorp One

A Forrester Total Economic Impact Study Commissioned By SimCorp, September 2024

Many large investment management organizations run their front-, middle-, and back-office operations using a mix of multiple platforms added over time, custom-built solutions, manual processes, and/or tailored integrations. Such approaches impose a significant burden on operational teams from differing workflows, and specialist training requirements to data extraction and costly reconciliation and maintenance efforts. To address these challenges within the buy side, SimCorp offers a fully integrated, front-to-back investment management platform anchored by a unified data layer across all asset classes. This can significantly improve operational efficiency and productivity, accelerate time to market, facilitate compliance, and enable better investment decision-making.

SimCorp One provides a scalable and integrated end-to-end investment management platform and services that streamline workflows throughout the investment value chain. It can empower users from across the company with a transparent and real-time total portfolio view across all assets — both public and private — to help them make decisions with speed and precision. By delivering clarity and confidence, SimCorp One enables clients to focus on their core business and make better, more timely investment decisions while simplifying operations, optimizing costs, and improving efficiency.

SimCorp commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) the buy side may realize with SimCorp One.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact on their organizations.

To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed five representatives with experience using SimCorp. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that is a global investment management organization with $150 billion in assets under management (AuM).

is an investment management organization with approximately in assets under management and front-, middle-, and back-office business users. Custom results are based on user inputs and the TEI case study.

Key Statistics

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    Return on investment (ROI)

    134%134%
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    TCO reduction Year 3

    22% 22%
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    Improved operational efficiencies

    Up to 45%
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    Payback (from initial implementation)

    13 months 13 months
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The interviewees said that before adopting SimCorp One, their organizations relied on legacy providers for back- and middle-office solutions and used various tools and spreadsheets for front-office activities. However, most of those prior solutions were outdated and required heavy manual interactions. This led to painful reconciliation and reporting processes, time-consuming daily manual data checks, lack of data quality, and poor data access. Ultimately, this meant decisions were based on obsolete data, and there was a need for extensive maintenance efforts across multiple systems and integrations.

Following their investments in SimCorp’s end-to-end investment platform, the interviewees’ organizations improved operational efficiency and reduced remediation efforts by eliminating manual processes along with multiple interfaces and workflows while saving on infrastructure and maintenance costs. Furthermore, user productivity and business agility improved, and time to market for new portfolios, regions, and other capabilities accelerated. Also, having access to real-time data enabled the organizations to improve their cash management.

Benefits (Three-Year)

Operational efficiency Legacy tool cost avoidance Improved business user productivity Faster time to market Reduced noncompliance costs Improved cash management

Key Findings

Total cost of ownership. The total cost of ownership (TCO) is much lower with SimCorp One investment compared to the prior state (or doing nothing) as shown in the chart below. The composite organization experiences robust growth during the three period, but is able to keep costs down.

The following chart shows custom results for .

Cost Comparison With Growth (Excluding Project Costs)

Year 1 Year 2 Year 3 Total costs (prior state/ do nothing) Total costs (SimCorp One)

Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:

  • Improved operational efficiencies of 25% to 45%, worth $11.5 million. The composite organization avoids increasing the number of operational FTEs because the business growth is backed by an integrated, cross-asset, front-to-back platform that’s anchored around a unified data layer. As such, operational staff no longer need to access multiple systems and spend unnecessary time reconciling data and managing differing workflows. This avoids doubling up on work.

For , this benefit might be worth over three years.

  • Avoidance of legacy tools license and maintenance costs, saving up to $7.9 million. By implementing SimCorp One, the composite replaces three legacy systems, which delivers cost savings. The avoided fees include those not only for platform and tool fees, but also those for custom builds, manual processes and the integrations across them, and the maintenance and upkeep of this setup.

For , this benefit might be worth over three years.

  • Business users including back-, middle-, and front-office staff save a combined 135,200 hours over three years, worth $7.2 million. Having prompt access to the latest functionalities and capabilities as well as any data improves the composite’s system performance, and streamlined reporting results in increased productivity of business users.

For , this benefit might be worth over three years.

  • Increased incremental profits of more than $6.0 million from faster time to market. The composite organization reduces new market entry, portfolio, and regional launch time by 50 days in Year 2 and by up to 60 days in Year 3 because it is easier and faster to manage one integrated system versus multiple disparate tools and processes.

For , this benefit might be worth over three years.

  • Reduced compliance remediation costs worth $88,000. SimCorp One enables the composite to reduce inconsistencies, errors, and mistakes attributable to manual processes, avoiding 50 compliance events and 2,000 hours spent on remediation.

For , this benefit might be worth over three years.

  • Cash management improvement that generates incremental profits worth $74,000. With cash data an integral part of the total portfolio view within SimCorp One, the portfolio administrators have greater transparency and confidence around current and forecast cash positions, enabling optimal use of cash.

For , this benefit might be worth over three years.

Operational efficiencies over 3 years

$11.5 million

Flexibility. Flexibility-related benefits that provide value for the composite organization but are not quantified for this study include:

  • Improved decision-making. SimCorp One enables the composite’s front-office staff to make better-informed decisions leveraging a unified data layer with up-to-date, trusted information. This, in turn, enables more timely portfolio investment management and ultimately improves fund performance.
  • Decoupling business growth and costs. By implementing SimCorp One, the composite organization achieves scalability that enables business growth without necessarily requiring an equivalent increase in costs.
  • Improved ability to innovate. With a single investment platform and a unified data layer as opposed to multiple disparate systems, it is much easier for the composite organization to innovate and build additional capabilities while an open architecture supports innovation through access to a wide ecosystem of partners.
  • Ability to invest across new asset classes. Because of SimCorp’s support of all asset classes, the composite organization has the flexibility to more easily add new asset classes to their portfolios.

Costs. Three-year, risk-adjusted PV costs for the composite organization include:

  • SimCorp One subscription fees amounting to $9.7 million. In Year 1, the composite pays fees of $2.7 million, and these fees increase to $4.2 million in Year 2 as the organization implements the solution in phases and adopts front-office solutions.

For , these costs could represent over three years. Please note that these subscription fees are based on high-level estimates and do not constitute a quote. For more details, please contact SimCorp.

  • SimCorp One implementation costs of $3.3 million. The composite pays $3.3 million to implement SimCorp One to fit its operating model. These costs include third-party costs associated with transition support as well as the costs of internal resources.

For , these costs could represent over three years.

  • Ongoing costs of just over $836,000. The composite pays for internal resources needed to support and maintain SimCorp One. It requires approximately 1.5 FTEs in Year 1 and then 2.5 FTEs from Year 2 as it adds the front-office module.

For , these costs could represent over three years.

The representative interviews and financial analysis found that a composite organization experiences benefits of $32.75 million over three years versus costs of $14.00 million, adding up to a net present value (NPV) of $18.76 million and an ROI of 134%.

might experience benefits of over three years versus costs of , adding up to an NPV of and an ROI of 0%.

“If we had not migrated to the SimCorp platform, we would not have been able to deal with the high level of growth we have been able to achieve, and operations would have been seen as an impediment to that growth.”

CEO, investment management

TEI Framework And Methodology

From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in SimCorp One.

The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that SimCorp One can have on an organization.

  1. Due Diligence

    Interviewed SimCorp stakeholders and Forrester analysts to gather data relative to SimCorp One.

  2. Interviews

    Interviewed five representatives at organizations using SimCorp One to obtain data about costs, benefits, and risks.

  3. Composite Organization

    Designed a composite organization based on characteristics of the interviewees’ organizations.

  4. Financial Model Framework

    Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.

  5. Case Study

    Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.

Disclosures

Readers should be aware of the following:

This study is commissioned by SimCorp and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.

Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in  SimCorp One. For the interactive functionality using Configure Data/Custom Data, the intent is for the questions to solicit inputs specific to a prospect's business. Forrester believes that this analysis is representative of what companies may achieve with such a platform based on the inputs provided and any assumptions made. Forrester does not endorse SimCorp or its offerings. Although great care has been taken to ensure the accuracy and completeness of this model, SimCorp and Forrester Research are unable to accept any legal responsibility for any actions taken on the basis of the information contained herein. The interactive tool is provided ‘AS IS,’ and Forrester and SimCorp make no warranties of any kind.

SimCorp reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.

SimCorp provided the customer names for the interviews but did not participate in the interviews.

Consulting Team:

Jan Sythoff

Corrado Loreto

M
K

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