As today’s asset management back office becomes more and more technology-driven, there is a shift from point-based technology solutions that solve specific functions in what are often very complex processes, to a more consolidated approach that allows multiple processes and functions to be completed within one centralized platform.

The best-of-breed trend from years’ past might be going by the wayside. The idea that organizations get the biggest benefit by always choosing the ‘best’ solution for a single function is breaking down. Often point solutions don’t talk to each other; they require different user credentials with different user interfaces and workflows that cause more administrative work for the teams using them. If that’s not enough, many of these point solutions are offered by disparate vendors, creating a vendor management nightmare.

Previous investments in point solutions that were once deemed to be stable, long-term decisions are now seen as out-of-date and expensive to maintain. However, many organizations continue to evaluate and purchase point solutions to solve single use-case problems without consideration for integration, scalability and user adoption. In many cases, these point solution decisions can result in more manual and disparate processes.

A good example of how point solutions can ultimately fail is in the realm of investment company regulatory reporting. Over the years as new regulations have been introduced by many national regulators, firms purchased numerous point solutions to satisfy compliance for a single regulation. Often these systems were then cobbled together for an end-to-end process. This approach isn’t scalable, costs millions, and frustrates teams and users as they try to keep up with the fast pace of regulatory change. And maybe most importantly, these point solutions don’t provide an accessible way to share and reuse data across regulatory filings.

And as our 2016 Asset Management Industry Trends survey showed, the majority of asset management industry professionals (61%) consider automating back-office processes as an important goal over the next two years, while managing increased regulatory reporting requirements simultaneously (47%) and centralizing fund data (44%) were the second- and third-most cited goals in the survey.

So while firms have goals that are aligned with the move to a platform approach, it is no simple task to switch out legacy systems or business processes, even when it is clear that firms can benefit from next-generation cloud-based platforms that are configurable to current needs and also scalable for the future. These new platforms are designed to operate in an ecosystem meant for integration and interoperability. Adding new data sources or upstream systems is more manageable and enables support for the changing needs of the firm and their clients.

With cost pressures and the need for increased efficiency and risk reduction all increasing, firms are looking for solutions that allow the centralization of functions and the data that feeds those functions. Continuing to integrate the same data multiple times into single point solutions only leads to increased risk due to manual workarounds, disparate process management, and lack of consistency across an organization.

The move to a platform approach, especially given today’s regulatory environment, provides a myriad of benefits to not only the strategic goals of an organization, but also the ability to meet the tactical challenges of increased data demands and data consistency. In the regulatory reporting example, the benefits can combine to increase the probability of success and reduce scrutiny by regulators across organizational filings.

Platform-based solutions can be the key differentiator for asset managers and third-party administrators as they look to data to provide value. A single reporting platform provides firms with the capability to more effectively aggregate and reuse data, as well as to take advantage of consistent and repeatable processes, workflow and exception-based reporting, better user experience, and firm-wide collaboration – all benefits that point solutions typically come up short in.