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Risk, Technology & Operations profile: InfraRed’s Sarah Gledhill

by The Drawdown 16 October 2017

InfraRed Capital Partners’ Head of Risk, Technology & Operations, Sarah Gledhill, discusses the recent operational review she spearheaded, as well as the results.

The Drawdown: You recently carried out an operational review, what was the driver behind this?

Sarah Gledhill: Following our spin out from HSBC in 2011, over the subsequent years, silos and inefficient practices had slowly emerged. Due to the increasingly disjointed way in which we were working, we were spending a disproportionate amount of times on little things, and the little things add up. They were typically small and simple tasks and because work wasn’t being split up effectively, there were often duplications and inefficiencies.

My feeling was that working in silos can be effective for organisations of a certain size, but given the growth we had been experiencing and the further expansion we were targeting, a key remit of this process was to create a platform that could handle the establishment of more funds without a requirement for proportionally more operational resources. We didn’t want our operations to stifle our growth, we needed to react and deliver value quicker on a larger scale.

In addition, it was clear that we had a need to invest in better systems and it felt sensible to consider outsourcing, as technology underpins the provider’s revenue, therefore, they invest heavily in systems – meaning we can focus on what we’re good at, rather than attempt to create our own systems.

Another driver was key man risk; we needed to ensure that not all of the organisation’s expertise and knowledge was held by just a few senior people.

Given there were a lot of decisions to make at that point, there was a need to break down the silos and create an operational platform that could react quickly as well as handle the growth of our business – the first step was to map everything out in detail and assess our current status.

TDD: How did you carry out the review – was it done internally or did you have any external support?

SG: We began by carrying out an operational review to understand fully where the weaknesses in the organisation were. Early on in the process we engaged with Holland Mountain who helped us manage this process.

Part of the challenge is freeing up internal time to focus on this, so having a consultant that specialises in this field helped us speed up decision making, and on a more informed basis.

It was also very helpful to have support from the managing partners in order to prioritise this project on key stakeholders’ agendas.

TDD: What were the main outcomes of the review?

SG: We found that while we were doing things very well, we were doing it in a segregated and siloed manner. We also found that a lot of work was being done on spreadsheets, and we needed to invest in an integrated PE software solution such as Investran.

We have a great team of highly-skilled accountants but they were spending large amounts of time performing routine, regular tasks, when their focus should really have been on the control: reviewing and challenging, rather than simply ‘doing’.

We realised that we needed to invest heavily in technology and this would need to be maintained. In addition to breaking down the silos, we identified a need to establish a centralised team to manage relationships with third parties. This would allow central decisions to be made so that the whole of the organisation benefits. An ongoing challenge with having two separate business lines is to get both parts to operate in a more joined up manner and leverage our systems and resources.

TDD: How did the rest of the organisation adapt to new systems and ways of working brought in because of the review’s findings?

SG:
The reaction was mixed. Change is always hard and getting people to alter their familiar working practices as well as to adapt to working with more and differentiated people, in order to break down silos, was challenging. Especially as these silos were working very well, but they needed to be disbanded as key man risk was becoming very high.

Bringing about all of this change required action from a lot of people. Thankfully, the benefit of this work was understood, as well as the idea that by doing this, we were preparing for the future. We held scoping sessions which helped get the business buy in to the project.

And as soon as these changes were seen to be delivering value, adoption of new practices become much greater, no one had an appetite to return to the previous practices.


TDD: Now that up to date systems and processes have been put in place, do you plan another operational review in a few years, or will it be looked at on an ongoing basis?

SG: This is a constantly evolving process, which needs to be reviewed to make sure the current set up is fit for purpose.

Implementation can take longer than expected and return on investment can take longer to be recognised but it is important to learn lessons from the process, remember why the original decision was made and most importantly, keep up to date with what is happening in the market and what technology is out there.

We are currently implementing workflow and data warehouse solutions to assist with how we collect, manage and use data, and establishing a data governance framework to support the adoption of new and existing technology and to ensure we have the appropriate level of stewardship or data.


TDD: How did the process impact your role at InfraRed?

SG:
The process coincided with an internal role move where I had more of an operational focus. I was Head of Finance for the last 10 years, and by navigating through the spin-out and then adapting the operational model to support the growth of the business my role changed to support the ongoing operations, manage the change management, develop our technology platform and be a key liaison point for all key third party relationships.


TDD: What was the most challenging aspect of the review and resulting changes?

SG:
The implementation was one of the most challenging parts, as well as changing from siloed to a systemised approach. In addition, there was a lot to do to achieve this. You have to be persistent and communication is key to success.

In theory everything made sense, however the practical side is much more complex. There are lots of decisions to be made and you need to constantly be thinking of what could go wrong: ask if each step is necessary and understand the benefit. You’re always aware that any changes made could be expensive and inefficient.


TDD: What has been the most positive impact?

SG: Re-focusing peoples’ time to allow them to focus on the value-add and remove the routine regular processes to the outsourcer.


TDD: What advice would you give to others in your position leading operational reviews and implementing new systems and work processes?

SG:
First, you need to get buy in at a senior level as soon as possible. Then you need to create a project team to maintain a very close relationship with the outsourcer during the implementation stage and establish very clear lines of communication, so that if you hit a problem you can react and make decisions quickly.

Make sure at pitch stage you are very clear on what you are trying to achieve – provide as much information as possible to make sure they are adequately informed.

Map out the organisation’s current state to understand where the problems and inefficiencies are. Outsourcing or investing in new technology will not fix existing problems, they need to be dealt with beforehand.

Be prepared to prioritise on what is important; ensure you don’t spend a disproportionate amount of time focusing on the little things. You will not be able to do everything. Being very clear on roles and responsibilities both in implementation and also on an ongoing basis is crucial.

Keep a very close eye on the consultants and system providers. The need to be managed internally to avoid scope creep. When you’re dealing directly with IT providers and service providers, they will promise the earth and sadly this is just not possible; so you need to be realistic, remember what is core to what you are trying to achieve and don’t get carried away with the bells and whistles.

Keep going. It is hard work and takes longer than you expect but it is the right approach to look forward and get the right tools and people doing the right jobs. You also can not outsource everything, focus on what is sensible, often more routine mechanical tasks but the responsibility must be kept in-house.

Plan for the worst case scenario, hopefully this will not happen but at least you will be prepared if it does.

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