Selecting the right Portfolio Management System: Matching Vendors to your Business Architecture

1. The PMS imperative: why a PMS solution tailored to business architecture matters

A PMS sits at the core of an Investment Manager’s (IM) operating model. It supports the investment process itself – portfolio construction, rebalancing and order generation – and equally underpins key capabilities such as pre- and post-trade compliance, risk oversight, performance measurement and client reporting and as such the right choices are crucial to enable the firm’s operating model.¹ Together, these functions form an IM’s business architecture: the blueprint of how activities and capabilities are structured across the firm.

A well implemented PMS can improve operational efficiency by up to 45% and cut total cost of ownership by ~22% compared with a patchwork of legacy systems.² These benefits only materialise when the system fits the broader landscape around it, incl. the interplay with a robust data layer. In practice, this is rarely the case. Most application landscapes were not designed on a greenfield, they accumulated over time: tools and interim fixes were added step-by-step. The result is an “integration tax”³: rising maintenance costs and stalled innovation that can reach an unsustainable level.

To help IMs optimise and future-proof their PMS setup, Deloitte has established a proven PMS assessment framework (incl. database), to tailor vendor and module selection to each IM’s business architecture.

2. The PMS scoring model: A structured path to the right vendor

Deloitte’s PMS Scoring Model follows a structured process: an initial list of vendors and systems is progressively narrowed down through a tailored, weighted assessment into a final shortlist. The results are individual vendor and system assessments, peer benchmarking, a shortlist of PMS vendors who could implement modules aligned with the IM’s business architecture, and a roadmap for the next stage of selection (Figure 1).

2.1. Input: From diagnosis to evaluation criteria

Two inputs anchor the first stage of PMS selection.

• First, the IM-specific design principles. The process begins with a diagnostic of the As Is PMS landscape against the IM’s business architecture and Target state, revealing key gaps and opportunities across business functions and PMS modules. These insights are translated into design principles that shape the system assessment.
• Second, Deloitte’s database, built on questionnaires of around 300 questions completed by 20 vendors covering their PMS offering. This database is ready to be deployed, allowing an efficient scoring and assessment process.
  

Together these two inputs produce a vendor long-list: these are the vendors best suited to the IM’s business architecture and can therefore progress to a detailed assessment.

2.2. Methodology: Evaluating vendors against what matters

Vendor responses are assessed along four overarching dimensions: operational, functional, technical and pricing (Figure 2). Each dimension breaks down into a total of 24 sub-dimensions and each sub-dimension into a set of individual questions. The four dimensions are weighted according to the IM’s priorities and design principles, resulting in a fit-for-purpose vendor assessment. Because necessary capabilities are assessed at the level of individual modules, results can show where different modules call for different vendors.

2.3 Output: Translating assessment into action

The vendor assessment delivers two distinct outputs: an individual vendor scoring and peer benchmarking. Each is available for different parts of the business architecture and across three levels of granularity: an overall, dimensional, and question-specific level. Together these outputs provide IMs with a clear view of how each vendor’s PMS offering aligns with their specific requirements per module.

The assessment concludes with a shortlist of vendors and a clear roadmap for the next stage of selection and implementation.

3. Conclusion: Selecting vendors for tomorrow’s challenges

For IMs seeking to optimise their PMS landscape, competitive advantage lies in selecting vendors whose capabilities align with the IM’s target operating model, business architecture, and strategic priorities. Deloitte's PMS Scoring Model provides the structured framework to make this connection explicit, grounding the vendor selection decision in systematic assessment against specific design principles.

Whether refining an existing PMS landscape or selecting a first vendor, our experts help you navigate this decision with confidence and clarity. The vendors you select today will shape your competitive position for years to come – choose one built for the future, not the past.
 

Authors

• Daniel Hirs, Partner, Investment Management
• Ueli Preisig, Director, Investment Management Lead Switzerland
• Michiel Simonis, Senior Manager, Investment Management
• Julia Martin, Business Analyst, Investment Management