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NCREIF

1NCREIF Committees Outsourcing Survey | November 2019

Table of Contents

1 Survey Results 3

2 Outsourcing Overview 32


Survey and Meeting Objectives

NCREIF issued a outsourcing survey in September, 2019. We had 91

respondents that covered fund managers, outsource providers (including

many who have been on both the investment management and

outsource provider sides) and consultants.

The survey was developed after the March conference and included

participation and input for all the NCREIF committees. Key Objectives for

the Session:

• Provide details on investment managers experiences with outsourcing

• Promote a discussion regarding outsourcing including its benefits and

challenges

• Encourage sharing of information between NCREIF participants

3NCREIF Committees Outsourcing Committee | November 2019


01 Survey Results


Survey Results

NCREIF issued a fund administrator outsourcing survey in July 2019. Below provides on

overview of the responses and results of that survey.

• The survey received 91 responses.

• The three most common outsourced areas are; Property Management, Property Accounting (Not

Fund Accounting), and Tax.

• When functions are outsourced they are most commonly outsourced via an on-shore arrangement.

• The majority of respondents who do not use outsourcing services indicated they did not plan to

implement services; 18 of the survey respondents indicated this was because of a loss of control

over the activity(s).

• After implementation of the platform the developments noticed were; reduction in staff, decrease in

turnaround time for deliverables, and reduced oversight requirement.

• The biggest drivers of an outsource decision were technical expertise and resource constraints

with 28.1% and 27.1% of respondents citing these as the most important drivers, respectively.

• 71% of respondents spent between 1 - 6 months or longer on implementation.

• The pros of outsourcing most often cited was external expertise and ability to scale operations

efficiently.

• The cons most often cited was lack of control and limitations on quality control.

Summary


Survey Results | Question 1-3

NCREIF’s annual survey resulted in 91 participants with the following responses.

Inv

estm

en

t

Man

ag

er

Serv

ice P

rov

ider

(Au

dit

/ T

ax / C

on

su

ltan

t)

Ou

tso

urc

e S

erv

ice

Pro

vid

er

So

ftw

are

Ven

do

r

Inv

esto

r /

Lim

ited

Part

ner

67.0%

Oth

er

14.3%

6.6%

0.0%2.2%

9.9%

Q3: What type of funds do you manage?

• The majority of respondents identified as an investment manager. Two participants identified as other including: (a) Strategic

Advisor / Consultant; and (b) NCREIF Employee.

• The majority of respondents manage funds of between $1B and $10B.

• For question 3, respondents were able to select multiple answers – with more respondents managing closed-ended funds than

any other fund type.

Q2: Average size (AUM) of your fund(s)?Q1: What is your perspective?

No

t A

pp

licab

le

Less t

han

$1B

$10B

-$25B

$1B

-$10B

Gre

ate

r th

an

$25B

13.2%

7.7%

20.9%

6.6%

51.7% 44.0%

Clo

sed

-en

ded

Fu

nd

s

Op

en

-en

ded

Fu

nd

s

Deb

t F

un

ds

11.0%

Sep

ara

te A

cco

un

ts

39.6%

All o

f th

e A

bo

ve

No

t A

pp

licab

le

36.3% 36.3%

9.9%


Survey Results | Question 4

Do you outsource services or provide services for the following areas?

Valuation Management

(n=82)

Partial

22.9%

Performance Metrics

(n=82)

Outsource

Tax

(n=82)

9.8%

Investor Administration

(n=80)

23.5%

41.5%

Fund Accounting

(n=83)

10.0%

9.6%

Property Accounting

(n=81)

Cash Management

(n=82)

45.8%

18.8%Property Management

(n=80)

Research

(n=83)

0.0%

15.9%

104

27.5%

Other

(n=30)

InternalN/A

103

102

102

101

104

102

25.6%

102

101

100

37.8%

54.9%

15.0% 41.3% 18.8%

12.1% 22.9%

18.5% 14.8%

13.8%

45.7%

15.9%

8.5%

13.8% 55.0%

13.4%

22.0%

13.3%

28.1%

13.4%

32.9%

68.3% 8.5%

59.0% 19.3%

76.7% 13.3%

14.6%

Survey Responses

• The 3 most common outsourced areas are; Tax, Property Accounting, and Property Management.




Internal Partial Outsource Outsource N/A

• Performance Metrics

(68.3%)

• Research (59.0%)

• Cash Management

(54.9%)

• Valuation Management

(37.8%)

• Tax (32.9%)

• Investor Administration

(27.5%)

• Property Management

(55.0%)

• Property Accounting

(45.7%)

• Tax (41.5%)


(18.8%)

• Property Accounting

(18.5%)


(15.9%)

Note: N/A likely represents service

providers

Top Three Outsource Areas by Category




Vendors Used for Outsource Services

Cash

ManagementCompliance

Investor

Administration

Performance

Metrics

Property

ManagementTax

Valuation

Management

• JP Morgan • Jackson

Walker

• BNY Mellon

• Burgiss

Private

Informant

• Citco

• Alter Domus

• McMorgan

• NVC

• Real

Foundations

• State Street

• UMB

• MSCI

• The

Townsend

Group

• Avenue5

• CBRE

• Colliers

• Cushman &

Wakefield

• Greystar

• J Companies

• JLL

• Legacy

Partners

• Lincoln

Property

Management

• Matrix

• Steven Scott

Management

• Deloitte

• E&Y

• KPMG

• PwC

• RSM US LLC

• Altus

• Chatham

• RERC



For functions that you outsource, can you share whether you outsource to an on-shore, off-

shore or captive organization?

28

25

22

35

22

20

17

39

41

28

7

9

3

9

3

5

2

10

9

3

4

3

2

3

3

38

37

47

26

52

50

58

19

19

2

0

Fund Accounting

(n=75)

Investor Administration

(n=76)

69

Property Accounting

(n=72)

Cash Management

(n=73)

Property Management

(n=79)

Valuation Management

(n=78)

Tax

(n=80)

0Performance Metrics

(n=68)

0Research

(n=69)

0

Other

(n=31)

76

75

72

73

79

78

80

68

311

Survey Responses

• When functions are outsourced they are most commonly outsourced via an on-shore arrangement.

Off-Shore

Internal Captive

N/A

On-Shore

Response Composite

Response %

On-shore 49.6%

Off-shore 2.7%

Captive 8.1%

N/A 39.5%



For functions that you outsource, can you share whether you outsource to an on-shore, off-

shore or captive organization?Top Three Outsource Areas by Category

Internal Captive Off-Shore On-Shore N/A


(14.7%)


• Cash Management

(13.0%)

• Fund Accounting (5.6%)

• Cash Management

(4.4%)


and Investor

Administration (4.1%)

• Tax (77.3%)


(71.2%)


(68.5%)



(57.4%)

• Cash Management

(50.7%)

Note: N/A likely represents service

providers



If you do not use any outsourcing services do you plan to implement outsourcing?

Yes -

in 3

to

6 m

on

ths

Yes -

in 1

to

3 m

on

ths

Yes -

in g

reate

r

than

6 m

on

ths

(n=

2)

No

(n=

20)

0.0%

9.1%

0.0%

90.9%

Survey Responses



If you do not use an outsourcing model and do not plan to implement outsourcing, can you

please provide the rationale for your choice? (Please check all that apply)

Wo

uld

see a

red

ucti

on

in w

ork

qu

ality

(n=

11)

10.4%

Imp

lem

en

tati

on

is

too

dif

ficu

lt

(n=

1)

Oth

er

(n=

7)

Tu

rnaro

un

d t

ime o

n

acti

vit

ies w

ill b

e d

ela

yed

(n=

9)

Co

st

str

uctu

re i

s in

lin

e

wit

h e

xp

ecta

tio

n,

no

need

to

ch

an

ge (

n=

11)

Req

uir

es a

dd

itio

nal

ov

ers

igh

t an

d m

an

ag

em

en

t

(n=

7)

Lo

ss o

f co

ntr

ol

ov

er

the a

cti

vit

y

(n=

18

)

Acti

vit

y i

s t

oo

sen

sit

ive

to o

uts

ou

rce

(n=

3)

13.4%

1.5%

26.9%

4.5%

16.4% 16.4%

10.4%

Survey Responses



What were the key drivers of the outsourcing decision, or what do your clients consider

drivers for the outsourcing decision? Please rank (1 being most important and 7 being least)Survey Responses

12.5% 25.0%1.6%

7.8%18.8%6.3%Technical Expertise

(n=64)

27.1%

9.4%

100.0%

30.0%

25.8%

20.0%

100.0%

11.4%

11.5%

4.3%5.7%

17.2%

Resource Constraints

(n=70)

21.3%

Tactical / Repetitive Function

(n=64)

Cost

(n=62)

9.8%

0.0%

11.5%

23.4%

13.1%29.5%

100.0%

9.4%

3.3%

3.1%

Expense of Fund

(n=61)

27.4%

16.1%

80.0%

33.9%14.5%3.2%

100.0%

0.0%

8.6%

35.9%1.6%

5.7%

1.4%

48.4%

6.5%

0.0%

4.8%

28.1%

2.9%

2.9% 100.0%

3.2%Geographical Concerns

(n=62) 3.2%8.1%4.8%

100.0%

100.0%

Other

(n=35)

7

3

4

6

5

2

1

• The biggest drivers of an outsource decision were technical expertise and resource constraints with 29.8% and 28.5% of

respondents citing these as the most important drivers, respectively.



What were the key drivers of the outsourcing decision, or what do your clients consider

drivers for the outsourcing decision? Please rank (1 being most important and 7 being least)Survey Responses

80

6

13

6

59

97

13

19

56

52

39

82

26

46

58

31

144

46

32

100

169

63

117

49

24

180

155

150

56

69

19

190

113

197

66

149

23

40

11

Resource Constraints

(n=62)

1

Technical Expertise

(n=64)

0

2

Cost

(n=62)

2

Tactical Function

(n=64)

3Expense of Fund

(n=61)

Geographical

(n=62)5

415

0

0163

116

Other

(n=35)

541

521

511

442

282

3

7

5

6

4

2

1

• This graph shows a weighted representation of the survey results by assigning a number to each ranking (i.e. 1 = 7 points, 2 =6

points, 3 = 5 points, etc.).

• This shows that resource constraints, cost and technical expertise are the largest drivers for an outsource decision.



How much time did you or your client allocate to the selection process (vendor selection

through contracting)?Survey Responses

Gre

ate

r th

an

6 m

on

ths

1 t

o 3

mo

nth

s

Less t

han

1 m

on

th32.0%

3 t

o 6

mo

nth

s

10.0%

29.0% 29.0%

• The time spent on the selection process was evenly split between 1 to 3 months, 3 to 6 months, and more than 6 months of an

average of 30%.



What activities did you or your clients perform during the selection process? (Please check

all that apply)

67.5%

Ven

do

r re

fere

nce c

hecks

Fo

rmal p

rocess

do

cu

me

nta

tio

n

Req

uest

for

pro

po

sal

bu

ild

-ou

t an

d d

istr

ibu

tio

n

Pro

of

of

co

ncep

t p

rocess

Vis

it t

o p

rov

iders

op

era

tio

ns

61.0% 62.3%

36.4%

45.5%

Survey Responses



Did you our your clients use a third party to assist with the selection?

Yes

No

80.0%

20.0%

Survey Responses

• 17% of respondents used a third party to assist with vendor selection.



If you used a third party, please indicate the benefits you feel you received from using a

third party (Check all that apply)Survey Responses

• Benefits received utilizing a third party include a formal approach, time savings, balanced assessment of vendors and allowing

existing resources to remain focused on existing job functions.L

imit

ed

or

no

valu

e

to p

rocess

Oth

er

(pro

vid

ed

exte

nsiv

e

RE

an

d o

uts

ou

rcin

g e

xp

ert

ise)

En

ab

led

a b

ala

nced

asses

sm

en

t o

f v

en

do

rs

Pro

vid

ed

a f

orm

al

ap

pro

ach

Cre

ate

d t

ime s

av

ing

s

Allo

wed

exis

tin

g r

eso

urc

es

to r

em

ain

fo

cu

sed

on

exis

tin

g jo

b f

un

cti

on

s

24.4%

7.3%

31.7%

17.1%

14.6%

4.9%



What approach to implementation did you or your clients undertake?

Process

reengineering and

then outsource

Lift and shift (no

significant

process changes,

moved existing

resources onto

an outsourced

platform)

15.1%

Hybrid (some

activities

remained at

Fund level)

Parallel

processing

Pilot followed by

go/no go decision

prior to full

implementation

New services

acquired via

Outsource

provider

Other

24.5%

7.6%

30.1%

7.6%

11.3%

3.8%

Survey Responses

• 30.1% of respondents used a hybrid approach to implementation, with some activities remaining at the Fund level.

• Two respondents indicated an ‘other’ approach to implementation including:

‒ A lift-out on existing systems then paralleling with go/no go decision on a fund by fund basis to transition to Outsource

provider's platform; and

‒ Taking different processes and rationale based on the service being implemented. number of these services have been

outsourced since inception.



How much time did you or your clients allocate to the implementation process (project kick-

off to stabilization)?

6 t

o 9

mo

nth

s

Less t

han

3 m

on

ths

3 t

o 6

mo

nth

s

9 t

o 1

2 m

on

ths

Gre

ate

r th

an

12 m

on

ths

37.0%

18.0% 18.0%

12.0%

15.0%

Survey Responses



What parts of the implementation went well, or what client activities provide for a successful

implementation?Survey Responses

• Buy in of outsourcing and involvement from all stakeholders in the process.

• Low turnover on the Fund administration side.

• Process documentation and providing information to the outsource provider in advance of the implementation.

• Using program/project management was key to providing needed structure.

• Engagement and experience of the outsourced service provider.

• A robust oversight program and communication process including weekly status updates.

• System knowledge of outsourcing company and willingness to accommodate requirements including data

transfer.

• Piloting the program allowed for refinement in process and accelerated the overall implementation.

• Technology build out and ensuring parallel testing during implementation.

• Cash management, investor reporting, and information delivery.

• The clients employees were lifted out by the outsourcing firm. This provided the outsourcing firm to retain the

history and knowledge of the client.

Key Takeaway: Oversight, Testing and Communication contribute to Success



What parts of the implementation could have been improved, or what should a client avoid

during implementation?

• There needs to be a clear set of responsibilities on both sides including an understanding of expectations.

• Using pre-determined templates helps to drive the process.

• Client ownership of oversight of outsourcer and a defined escalation process for outsourcer issues/questions

makes for a more efficient transition.

• Time constraints between the vendor and Fund made the process more drawn out.

• Clear contract negotiations and vendor selection are critical.

• Level and knowledge of staff assigned by outsourcing vendor including an understanding of the Fund structure is

critical.

• Data migration and determining standard services promised were not met timely making for an inefficient

implementation.

• Parallel processing and QA/UAT of deliverables are key.

• Duplication of tasks makes for an inefficient implementation.

• Making too many changes at once hinders success.

• Consideration of ad-hoc requests and if charges will be incurred for the scope of work.

Survey Responses

Key Takeaway: Taking time to plan is critical



Survey Responses

• Take longer to determine the responsibilities and workflows for each process.

• Allow time for the unexpected.

• Devote a more substantial amount of time to implementation

• Consider contingencies for timing delays. Involve more people who didn't have financial reporting responsibilities

(hard to support conversion and BAU at the same time).

• Pass off data ASAP to shift responsibility and ask for sample deliverable's upfront that could be leveraged from

other funds/clients rather than creating from scratch.

• Bring more data to the initial set up to decrease the amount of revisions after.

• Implement parallel testing.

• Start up front - this is easy to do with new Funds.

• Avoid making too many changes at once, wait on the transition until the new staff has been fully onboarded and

is familiar with the accounting/organization.

• Spend more time identifying areas that require "interpretation" versus repetitive process (i.e. CAM calculation vs

processing A/P).

What would you do differently if you were able to complete the implementation again?

Key Takeaway: Setup project governance with key stakeholders



What does the stabilized platform look like vs. implementation platform? Please check all

that apply.

4442

6

40

34

22 22

42

20

28

Increased

turnaround

time for

deliverables

No change

in oversight

requirement

Reduction

in staff

No change

in staffing

Increase

in staff

Decrease in

turnaround

time for

deliverables

No change in

turnaround

time for

deliverables

Reduced

oversight

requirement

Decrease in

direct

contact with

outsource

team

Increased

oversight

requirement

• The majority of respondents saw a reduction in staff, decreased turnaround time for deliverables and reduced oversight

requirements following the implementation of outsourced services.

Survey Responses



What were the key pros of outsourcing services?

• Expertise (e.g. administrator is more well versed in local laws for foreign fund vehicle, technical expertise,

internal accounting, cash management).

• Scaling up or down operations is easier with vendor than internal hiring and eliminates burden of recruitment

process.

• Lower overall cost and cost savings (e.g. many outsourced functions can be charged to the Fund).

• Time efficiencies.

• Allowing the Fund to concentrate on core competencies (e.g. portfolio management and client service) and

maximizes the skillset of staff.

• Independence and transparency to investors (e.g. valuations, open end funds with a trading NAV).

• Better data collection and reliable platform.

• Ability to rely on a specialist for a non-core function.

• Efficiency in handling high-volume, low intensity activity.

• Not having to manage staffing requirements.

• Transparency in cost assignment.

Survey Responses

Key Takeaways: Technical Expertise and Scalability



What are the cons of outsourcing?

• Lack of control (e.g. systems) and oversight requirements.

• Limitations on quality control.

• Oversight of the outsourcer inevitably involves some level of duplication of effort (e.g. accounting).

• Limited customization.

• Cost is still high – including initial cost, even though we save on internal resources.

• Requirement to educate vendor staff about our company policies and processes

• Knowing the details when necessary of the underlying transactions is not an immediate, easily accessible

recovery of answers.

• Longer turnaround times and change management.

• Many firms are technology oriented and lack the product knowledge.

• Business processes of outsourcing firm can be too segmented (e.g. several accounting functions handled by

different teams).

• Outsourced investment decision-making (stock- or property- picking) means that we are not flexible – “We are

bettors at the betting window, not horse breeders or horse trainers”.

Survey Responses

Key Takeaways: Loss of Control and Quality Issues



How have you structured the oversight with the outsource partner, or what is the

recommended structure for oversight? Check all that apply

35.0%

Specific resources to

manage relationship

Within job description

for relationship mgmt

14.5%

Rely on Outsourcing

provider reporting

50.5%

Survey Responses



How well does communication work, or what is the preferred communication protocol?

Please check any that apply provide for a successful implementation?

36

25

28

7

1 1 1 1

Executive

steering

committees

SLA with

reports on

specific tasks

It remains

challenging

Written updatesRegular

scheduled

meetings via

phone or Skype

Outsourced

team is onsite

for dedicated

support

Ad-hoc

meetings, no

set schedule

In-person

meetings

Survey Responses



Are you still able to have the ability to address ad-hoc requests, or do you run into

scope/responsible party issues, or as a provider how do you address ad-hoc requests?

• 20 out of 38 respondents indicated they are still able to address the ad-hoc requests and the vendor is normally responsive.

Sample responses include:

‒ As a condition to outsourcing the manager must agree that ad hoc reporting is part of the scope of the work and a no fault 30

day termination clause is used to enforce that feature.

‒ Ad-hoc investor requests were part of the services we agreed upon up front. When any other change to a deliverable arises, the

contact may be negotiated.

• Other responses include:

‒ This is dependent on the outsourcing firm and relationship of business.

‒ Scope clarity is always a conversation – beware of scope creep.

‒ The ad-hoc issue is one that needs to be addressed upfront with the vendor, and the client has to take responsibility for the cost

aspect. Base-line model vs. full flexibility; this effects the quality of work product.

‒ This is an area of challenge as many ad hoc requests overlap into both parties responsibilities.

‒ We typically pull in additional resources.

‒ Sometimes there are scheduling conflicts and some scope issues, but mostly it all works.

‒ We as a provider put in a workflow for ad hoc requests and if we maintain the required information we respond to the ad-hoc

request.

‒ We have the ability to address ad-hoc requests but it takes time and a significant amount of communication on both parties. In

addition, these types of requests bear cost which can add up.

‒ Run into issues, delayed timing, administrator unable to service many of the requests.

Survey Responses

Key Takeaway: Plan for Ad Hoc Reporting/Requests Upfront in the Contracting Process



Would you complete the outsourcing initiative again?

Survey Responses

No

5.8%

Yes

90.4%

• One respondent indicated they would not complete the outsource initiative due to decreased quality of reporting and the financial

reporting process takes longer with the Outsource provider. The second respondent indicated the initiative did not meet

expectations



Could you go back to an internal/insourced model, or have you had a client revert to an

insourced model?If yes, what would be the challenges?

• Staffing issues, internal resources and training takes time.

• The only way to go back is to buy/build the system support which would be difficult.

• Setting up all the systems again.

• Finding high quality staff quickly to handle the work.

• Making sure systems are set up to efficiently handle the increased work load and make sure

staff devotes appropriate time to deliverables.

• Internal IT structuring and data reintegration.

• Time pressure -- most of the work is done at the end of the quarter.

• Shifting costs back to the advisor.

Survey Responses

Yes

54.3%

No

48.6%

If no, what are the key impediments?

• Cost and staff

• Adding headcount, ability to charge expense to investors.

• We do not have the internal skill set now to insource property-picking.

• No, all systems and setup is now owned by the fund administrator.

• No, we never had an insource model.

• Lack of technical knowledge. The technology changes are occurring so fast, that a firm

would have to decide if it is a technology company supplying real estate products or a real

estate company with a technology group.

• Client expectations.

32NCREIF Committees Outsourcing Committee | November 2019


02 Outsourcing Overview


Back Office Functions Viewed as a Continuum

The Back Office has changed significantly over the last 30-40 years focusing on efficiency

and cost reduction.

DECENTRALIZED CENTRALIZEDSHARED

SERVICESOUTSOURCING OFF-SHORING

EFFICIENCY AND COST REDUCTION

Support service functions exist within each business unit,

with minimum consistency across

business units

Centralized functional departments provide a standardized level

of service to business units

“Business within the

Business” that

provides a menu of

services to business

units on a predefined

cost basis

Use of a 3rd Party to undertake specific tasks or processes usually with a high level of autonomy

Use of a 3rd Party to undertake specific

tasks or processes, in a different country

with lower labor costs


Drivers for Outsourcing / Off-shoring

The ability to grow and scale are key drivers for outsourcing / off-shoring.

Overview

GROWTH▪ Acquisitions and mergers have dramatically increased properties, leases and subsequently staff.

NEW BUSINESSES▪ Many real estate companies have grown through joint ventures and subsequently accounting staff.

TECHNICAL EXPERTISE▪ Many companies need technical expertise in areas on a part time basis to address specific issues.

LABOR AVAILABILITY AND COST▪ Many markets have extreme labor shortages with ever increasing salaries.

CYCLICALITY▪ Many accounting & finance processes are very cyclical and are difficult to staff the “peaks” (i.e. CAM, Planning,

Cash Application). Acquisitions & Mergers exacerbate the problem.

SCALE / STAFF AUGMENTATION▪ Using offshore resources to augment existing staff and provide a scalable platform.


Insource / Off-shoring Decision Flow

Sourcing alternatives are then considered with decisions made as to which capabilities are

candidates for outsourcing

Overview

Outsource / BPO / Off Shore

No

Requires

specialized

knowledge?

Available

outside?

More

cost effective

outside?

Variable

workload?

Can offload

peak?Strategic?

Yes

Define

performance

requirements

Outsourcing

Opportunities

Retain work in-house (in-source, if world-class)

Yes Yes Yes Yes

No No No No

No Yes


What Do Companies Typically Outsource / Off-shore?

The following graphics illustrates functions/processes companies typically consider for

outsourcing / off-shoring.

Property

AccountingConsolidations

Monthly /

Quarterly

Close

Legal Entity

Reporting

Transaction Processing

Record to Report (General Accounting) Order to Cash

External Reporting

Statutory

Reporting

Regulatory

Reporting

Rating

Agency

Relations

Key Not Typically

Outsourced

Less Commonly

Outsourced

Most commonly

Outsourced

Investor

Relations

Fixed

Asset

Accounting

Tax Planning

Compliance

Financial

Reconciliati

ons

Benefits

Admin /

Accounting

Inquiry

Handling

Daily P&L

Mark to

Market /

Middle

Office

Investor

Reporting

Premium

Accounting

(Ins)

Re-Insurance

Accounting

Investment

Accounting

/ Fund

Administrati

on

Order Entry Billing

Cash

ApplicationsCollections

Bank

Reconciliation

Trust /

Treasury

Management

Requisition

Materials

Purchasing /

Procurement

Payment

Processing

Accounts

Payable

T&E

Processing /

Reimburseme

nt

Procurement

Card Admin

Procure to Pay

Performance

Reporting


What Do Companies Typically Outsource / Off-shore?

The following graphics illustrates functions/processes companies typically consider for

outsourcing / off-shoring.

Strategic

Planning

Budgeting &

Financial

Planning

ForecastingAccounting /

Tax PolicyInternal Audit

Financial

Analysis

Internal

Consulting

Project

Management

Finance

Function

Management

Business Decision Support

Planning Control

Finance Management

Human

Performance

Management

Training &

Development

Business

Liaison

Expense /

Revenue

Allocations

Performance

Measures

Multi

Dimensional

Reporting

Profit Center

/ Customer /

Producer /

Profitability

Acquisitions

&

Divestitures

Risk

Management

(CM)

Research

Property

Management

Management Reporting Specialized Expertise

Valuations /

Valuation

Management

Key Not Typically

Outsourced

Less Commonly

Outsourced

Most commonly

Outsourced

Tax Strategy


Lessons Learned

The following are observations of several real estate investment and management

companies who have leveraged outsourcing / off-shoring.

Lessons Learned | Selecting an Outsource ProviderLessons Learned

• Track Record

• Security

• Client Base

• Redundancy

• # of Staff

• Service Offerings

• Staff Turnover

• SSAE 16

• Financial Strength / Capital

• Staff Development / Training

• System Experience

• Quality Management Systems

• Implementation Approach

• Dedicated / Shared Staff

• Data ownership

• Locations

• Clearly define requirements for functions / processes to

be outsourced.

• Outsourcing / Off-shoring should be looked as an

extension of a company’s team that requires

management, training and oversight.

• Additionally, there are often cultural differences that

should be acknowledged and leveraged to create sense

of team.

• Outsourcing/Off-shoring works well for repeatable

processes, however, areas that require interpretation

need greater oversight.

• Conducting a proof of concept prior to committing to

outsourcing / off-shoring will provide confirmation of

capabilities and also may highlight issues not considered

initially.

• Check references and learn from mistakes other

Companies made when outsourcing / off-shoring.

• Change management is a key component of the transition

to an outsourced and especially an offshore solution.

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