The key to a successful lift-out isn't just strategy. It's execution.
You've made the decision. The direction is clear. Operations need to improve, costs need flexibility, and growth requires different infrastructure. The business case is solid, the partner has been selected, and the timeline is set.
Now comes the hard part: Getting it done.
Research shows that 70% of managers want better technology platforms and 59% seek improved regulatory frameworks. But seeing a need for change and doing the hard stuff to execute it successfully are are not the same thing at all.
The managers who succeed, a knowledge that operational transitions must be set up and managed as strategic projects. They are staffed and budgeted accordingly.
The people challenge (it's bigger than you think)
"What happens to us?" It's the first question your team will ask, and your answer determines everything that follows.
Employee resistance can derail operational transitions even more than technical problems, missing targets or operational issues. Your team has built relationships with fund managers, learned your specific requirements, and developed processes tailored to your business. They have legitimate concerns about career prospects, job security, and cultural fit.
The solution isn't reassurance. It's communication and opportunity.
Successful transitions offer more than just a safe harbour, they demonstrate real career advancement. Giving the employees contact to larger teams, exposure to different strategies, and access to professional development opportunities that small in-house operations cannot provide. They maintain their client relationships while expanding their expertise.
Frame it correctly: they're not losing their jobs; they're joining a larger platform where their skills have more value.
Communication that builds confidence
Transparency beats optimism every time. Your team needs clear information about timelines, role changes, compensation adjustments, and integration processes. Uncertainty breeds resistance.
Best practice includes:
- Early involvement in planning discussions where possible
- Regular progress updates with specific milestones and dates
- Clear role mapping showing how responsibilities change
- Direct access to provider team leaders for questions
- Retention programmes for key personnel during transition
The goal isn't to eliminate concern. It's to provide enough information for people to make informed decisions about their careers.
Technology transition (the make-or-break moment)
Technology migration is where most operational transitions succeed or fail. Your existing systems contain years of data, established workflows, and integration points with third-party providers. Moving this infrastructure without service interruption requires careful planning.
Successful approaches typically include:
- Parallel system operation during testing phases
- Phased data migration with validation at each stage
- Extensive testing protocols before full system adoption
- Fallback procedures if problems arise
- User training programmes for new platforms
The temptation is to accelerate timelines to reduce disruption. The reality is that rushing technology transitions creates more problems than it solves.
Investor communication (honesty works better than spin)
Your investors need to understand what's changing, why it's changing, and how it affects them. The message isn't "we're outsourcing to cut costs." It's "we're upgrading operations to support growth while maintaining the team and service quality you expect."
Key points to address:
- Service continuity: Same team, same relationships, improved infrastructure
- Enhanced capabilities: Better reporting, stronger governance, scalable operations
- Strategic focus: Leadership time redirected toward investment performance
- Risk mitigation: Reduced key person risk, improved compliance frameworks
Investors who understand the strategic rationale typically support operational improvements. Those who see it as cost-cutting may question your plans.
Measuring success (beyond cost savings)
Operational transitions succeed when they deliver measurable improvements across multiple dimensions:
- Service quality: Response times, accuracy rates, client satisfaction scores
- Cost efficiency: Variable cost structure, eliminated fixed overheads, improved margins
- Growth capacity: Ability to support new funds, strategies, or markets
- Risk management: Improved compliance, reduced key person risk, stronger governance
- Leadership focus: Time reallocation to investment and strategic activities
Track these metrics before, during, and after transition. Success isn't just about lower costs. It's about operational capability that supports business growth.
Common pitfalls (and how to avoid them)
The mistakes are predictable:
- Inadequate staff communication leading to key person departures
- Rushed technology migration causing service disruptions
- Poor investor communication creating unnecessary concern
- Unclear success metrics making it impossible to measure results
- Insufficient change management resulting in cultural resistance
Each of these problems has straightforward solutions, but they require attention and planning to prevent.
Your execution checklist
Ready to move forward? The key success factors are:
- Staff engagement and communication strategy prepared
- Technology migration plan with parallel operation phases
- Investor communication approach focused on strategic benefits
- Success metrics defined and baseline measurements established
- Project management structure with clear milestones and accountability
Execution separates successful operational improvements from expensive mistakes.
Get the complete implementation guide
Download our comprehensive eBook Lift-outs: Can lift-outs lower operational costs and enable growth strategies?
It includes detailed implementation frameworks, communication templates, and project management tools to help execute your operational transition successfully.
