The pressure continues to mount for retirement recordkeepers to transform their operating models to lower cost to serve and create better, more personalized digital client experiences. Market dynamics, including continued price pressure, evolving regulations and the availability of new technologies, such as generative AI, are driving this urgency.
To navigate these challenges, many firms have already started to implement transformation programs aimed at continuous reinvention across operations and technology. Measurement of the performance and results of these programs is important to make sure that any changes made are impactful and measurable in the company’s profit and loss (P&L) statement.
Why measuring transformation outcomes matters
Change of such magnitude requires significant investment and keeping the board and other key stakeholders regularly informed. But sometimes organizations risk sacrificing robust tracking for a faster rate of change or compensating for near-term bespoke client demands. Also, some firms rely solely on financial metrics to assess return on investment (ROI), thus missing critical operational and/or customer-driven indicators. Research from Accenture shows that over 70% of transformation programs fail to meet expectations[i], often due to poor tracking and management of value creation efforts.
Measurement of value realization is therefore an important part of any transformation program. Identifying a broader set of outcomes upfront, which will be measured through key performance indicators (KPIs), can help to provide a structured approach to prioritizing high-value initiatives, set realistic benefit forecasts and ensure transformation efforts deliver measurable impact.
What does this mean in practice? Recordkeepers embarking on transformation journeys should integrate non-financial metrics into their relevant transformation KPIs. Such KPIs could cover areas like operational efficiency (e.g. digital channel enablement, or straight-through processing), customer engagement (e.g. client satisfaction scores) and broader impacts (such as linking back to overall enterprise priorities). Given the nature of services provided by the retirement industry, measuring transformation outcomes requires a dual approach:
- Near-term indicators: tracking participant and sponsor engagement, service satisfaction and operational efficiency to assess immediate progress.Long-term outcomes: measuring participant retirement readiness and income replacement ratios to track the impact transformation efforts are having on supporting long-term retirement security.
Here’s an example: to truly balance metrics along these dimensions, firms need to move beyond tracking, e.g., the number of financial advisor sessions only. Instead, they should think about parameters like implemented advice recommendations, participant satisfaction or participant savings rate trends. Such a shift would help ensure that to-be-introduced tools are solving the right problems for both participants and advisors, helping to improve retirement positions, rather than just increasing session volume.
Similarly, measurement should also include servicing efficiency, capturing metrics such as straight-through processing (STP) rates or handling cycle times. Improving these metrics isn’t just about cutting costs, it can also accelerate fund contributions and disbursements, improve participants’ financial planning and reduce manual work.
Using KPIs to track value
But KPIs will only provide a powerful framework for tracking benefits when they are aligned with broader corporate goals. By linking KPIs to revenue and cost-saving initiatives, organizations can move from baseline measurements to future-state targets with clearer financial impact.
For example, a review of the withdrawal process from retirement accounts might show a significant number of manual quality checks and offline calculations for hardship withdrawals. By looking at policy, process change and automation opportunities, a recordkeeper could challenge and improve the rules that govern the process and enable more straight-through processing.
Similarly, KPIs focused on call handling time and first call resolution by call category could signal broken processes, a need for further investment in digital self-service or insufficient incident resolution scripts. Tracking digital channel initiation (DCI) or issuing post-call surveys can minimize per-call costs through improved participant experience and effective issue management.
By tracking KPIs, firms can gain end-to-end insights into participant journeys, operational bottlenecks and financial impacts—so that any improvements drive up digital client experiences, reduce costs to serve, reduce risk and increase revenue growth.
Putting strategy into action
To be able to turn their transformation strategy into action, recordkeeping firms need to prioritize three critical steps:
- Consolidate data to create a unified foundation for transformation: establishing a strong data strategy starts with executive buy-in on the importance of a quality data foundation to drive complex transformation. Organizations need to standardize data collection storage to create a single source of truth and modernize governance so that access is provisioned effectively across the enterprise. With good data protocols in place, all the KPIs—from STP rates to digital self-service adoption—can be tracked and linked to financial results.Create a structured governance model: beyond data, a structured governance model should be established to ensure accountability, with clear ownership of KPIs across business functions. A dedicated Transformation Management Office (TMO) and Value Realization Office (VRO) should drive implementation, oversee metric baselining and set targets to ensure transformation initiatives align with KPI improvements that directly translate into tangible results.Empower teams for agile execution: effective transformation goes beyond top-down oversight. A well-structured program should empower teams with the autonomy to make decisions at the ground level, where the work is being done, without the need to continuously cut through onerous governance red tape. By equipping employees with clear decision-making frameworks and structured governance, organizations can drive faster, more agile execution while maintaining alignment with strategic objectives.
Accountability for transformation outcomes and improvements should be owned at the highest levels of the organization. Responsibility for achieving each KPI should be pushed down to both individual and team goals. By embedding KPIs into performance cycles, organizations can create a continuous improvement loop. This helps to ensure that transformation efforts lead to cost savings, operational efficiency and customer satisfaction improvements, not just surface-level changes.
Transformation in the retirement industry isn’t just about making organizational and operational changes—it’s about ensuring that investments deliver measurable value. Whether you’re rethinking operational efficiency, enhancing participant experiences or driving long-term financial outcomes, having a structured approach to measurement is critical. The path isn’t easy, but with the right framework and resources, transformation is possible—and the rewards are well worth it.
If you’re ready to redefine how your organization measures success, let’s start the conversation.
Special thanks to Milla Perttula for contributing to this blog.
[i] https://www.accenture.com/us-en/services/technology-transformation/technology-strategy/transformation-office-services
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