Clearwater Analytics Process Analysis Report

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Clearwater Analytics Process Analysis Report:

Addressed to Scott Erickson, Director of Product Management
M. Heidenreich
University of Idaho

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Table of Contents

Executive Summary
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Introduction
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Primary Processes
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Support Processes
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Bridging Processes
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Conclusion
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Executive Summary
Background and Purpose
Clearwater Analytics, leader in investment portfolio reporting and analytics for
institutional investors, is expected to see continued growth in clientele aquisisiton.
Growth is assumed with the contingency that Clearwater continues to meet
stakeholder expectations. Stakeholders have been identified as clients, employees,
and management. As director of project management, you may use this report as a
resource in preparing for and responding to existing and future challenges.
Challenges identified by leadership include continued agility and flexibility with
rising portfolio complexities, maintaining a team centric culture while scaling to
meet demand, and in product advancement with the potential of future competitor
service offerings through new technological innovations. (M. Locke. Personal
Communications. October 23, 2015)
Scope
I evaluate by what means the design and integration of support and bridging
processes influence the execution of primary processes for Clearwater Analytics.
Using personal experience, the Clearwater website, reviews from glassdoor.com,
and news articles I articulate how the performance of process management
influences stakeholder satisfaction. Primary processes discussed are the primary
value delivery frameworks for Clearwater which are operations and services.
Support processes include corporate planning, human resources, and research and
development (R&D). Bridging processes include internal processes of compensation
and data management
Findings
Clearwater utilizes benchmarking practices as well as internal and external
feedback mechanisms to drive change and innovation. Metrics used for
benchmarking performance include assets on the system, client growth, and client
conversion rate. Competitors include automated platforms such as Advent,
Sunguard, SS &C, and PAM and the traditional manual reporting system Excel. (M.
Locke. Personal Communications. October 23, 2015). The design of the hiring
process contributes to the employment of individuals in line with managements
vision and a well-rounded team centric work force. Multi-skilled employees, quality
operations, and client/personnel feedback loops have equipped Clearwater with the
tools to meet and exceed stakeholder satisfaction. Limitations are present in the
current processes of research and development, and within the organizational
structure. Clearwaters services, while unique today, are subject to the comparison
and potential superiority of competitors products and to technological innovations
that could render current technology obsolete. The traditional hierarchy structure is
also difficult to scale while maintaining a team centric, trusting, and positive culture
due to the limited growth opportunities in management. The traditional hierarchy
structure could also be connected to employee turnover.
Recommendations

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The implementation of opportunity identification processes, in the spirt of
continuous improvement, is recommended to maintain stakeholder satisfaction.
Innovative practices such as What if analysis could be an unrealized profit
segment. To maintain a team centric culture, I recommend the re-design of the
current traditional organization structure to a Lattice Organization Structure with
little to no hierarchy of power.
Introduction
A process, as defined by the APICS Dictionary of 1995, is a set of logically related
tasks or activities performed to achieve a defined business outcome. The course by
which a business designs, implements, and controls the related activities is referred
to as Process Management. Process categories include primary business processes,
which relate to the foundational business practices of the company, support
processes; these make the execution of primary processes possible; and bridging
processes, which are the activities that enable seamless integration of support
processes into primary. To analyze a firms success in process management, and to
identify the weaknesses, a variety of methods and metrics could be utilized. As a
private company, I have access to the data available publically through the
companys website, personal communications with current and past employees,
articles online, and reviews from anonymous individuals on glassdoor.com. Using
the information available, I have identified Operations and Services as the key
primary processes within Clearwater Analytics. Though other key primary processes
exist; the processes of Operations and Services account for the majority of value
driving activities, bottlenecks, and associated resources that impact continuous
improvement and Clearwater's overall level of stakeholder satisfaction.
Operations are the activities which transform inputs into final outputs. Services
include the customer support practices provided to customers after they purchase
the good or service. Clearwater defines their value offering by what they offer
clients from operations and service processes; stating clearly on your website "we
leverage web-based software and world-class client service to help our clients
automate investment accounting, monitor investment policy compliance, and
analyze portfolio performance and risk". The support processes that contribute the
most to the execution of primary process activities at Clearwater are within the
fields of Human Resources (H.R), Resource and Development (R & D), and corporate
planning. Bridging processes, which contribute to the integration of support
processes into primary, include compensation and data management.
Primary Processes
Operations
Operations are the value adding activities that a company needs to perform in order
to achieve its business goals. Clearwater has designed its operational processes to
support the overarching goal of client success; providing accurate and timely
investment data, streamlined investment accounting, investment analytics and
compliance monitoring. ("Every Insurer Needs Five Things"). Client reviews and

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external recognition indicate that Clearwater has successfully identified what best
adds value to a clients business, at the lowest cost, to enable their clients to realize
the greatest gain in profit. The identification of value adding activities is made
possible by the industry expertise of employees and client feedback mechanisms. A
web based software platform enables Clearwater to provide clients with the timely
data requested. Data collection from all applicable custodians makes for a
streamlined system. Daily reconciliation and monitoring through a dedicated client
services team ensures accurate, reconciled, and compliant data reports. The stated
processes have been successful for Clearwater due to the processing of and
response to client feedback, such as the released compliance product functionality
in 2014. The response was enhanced the monitoring capabilities of Clearwaters
system. (O Donnell). The limitations within operational processes are due to limited
current product and service offerings when benchmarked with competitors. The
specific discrepancies are a function of the support processes within research and
development.
Services
Founded in 2004, Clearwater has accumulated $1.2 trillion in assets on its system
for 25,000+ accounts. About 500 billion is assets was added within the last year.
(Henderson) This growth indicates a high level of customer retention and
stakeholder satisfaction thus far. The Service Process is designed to complement
their innovative technological system by delivering a prestigious level of customer
service through their greatest asset, multi-faceted and skilled employees. The
integration of talent and technology enables Clearwater to handle all client
reporting needs regardless of the number of accounts, custody banks, or security
types used by the company. The success of Clearwater in service processes has
been recognized by awards such as: Client Software Product of the Year (finalists),
Idaho Private 75, and 2009 Business Finance Best of Breed Software Roundup. Client
testimonials, including that from Tim Rodgers, Director of SEC & Statutory
Reporting, illuminates the value of the customer contact phase points which
Clearwater has implemented (Rodgers). The clients are first paired with an
implementation manager. This initial contact is an expert in the practices essential
in the first few months, regarded as the most challenging phase of any new
software programs. These implementation managers assist software integration by
building feeds with banks and providing free training for the client to successfully
utilize the system. This process allows for a smooth initial phase before being
transferred to a long term account manager. Account managers are backed by team
members who bring in data, and offer a variety of individual expertise. Teams of
client dedicated experts are able to work as an extension of the clients team
providing any necessary guidance or training to ensure a positive and mutually
beneficial relationship with the clients. The current service process of client services
teams, dedicated to given clients, has been crucial in client retention and growth.
The limitation within the service process is due to the lack of access to a What if
analysis tool. The tool is discussed in greater detail under R&D. Controls of service
processes are in place through team leads and account managers. By placing
channels of responsibility through a tiered system, management can work through

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fewer trusted individuals to steer employees toward company objectives. The tiered
structure, however, comes with its own challenges as discussed in bridging
processes. The communication and understanding of objectives is reinforced by the
support process of corporate planning.

Support Processes
Human Resources
People are the proclaimed to be the biggest asset for Clearwater Analytics. ("About
Clearwater Analytics"). Human resource processes are designed to support all
primary processes through appropriate hiring practices and employee support
systems. Feedback mechanisms within the company are in place as demonstrated
by recent changes in the interview process in response to negative feedback from
review websites such as glassdoor.com and employee suggestion. In the companys
past, the interview process was designed to test potential candidates stress
tolerance, confidence, and attitude by subjecting the individuals to a tough series of
questions intended to frustrate the candidate. Though Clearwater has had success
with who has joined the company thus far, they have also lost potential candidates
due to the applicants disdain for the practice, even if that individual had made it to
the final interview step. ("Clearwater Analytics Interview Questions") Recently,
Clearwater has accepted that feedback and has made changes to the process.
Candidates still go through a three step process including a phone interview,
conference interview with a technical focus, and finally a conference interview
including one owner and the given department director. The questions have been
re-designed to question the candidate on their knowledge of Clearwater, their desire
to work with their team, and to better assess if the given individual has the right
personality and desire to be successful at Clearwater. Though time will be the
greatest indicator, this type of application process of focus on an individuals fit
will most likely produce employees more likely to remain in Boise, Idaho and
decrease overall employee turnover. Clearwater should continue to listen and
respond to negative feedback to continuously improve as a company. Another
important aspect of interviews, as indicated by current employees, includes the
practice of at least one founder/owner at every final interview. This involvement
from leadership demonstrates the value recognized in every employee regardless of
title. A significant amount of control is worked into the process through the
involvement of at least one owner. The consistency of an owner screening gives
leadership ultimate control over who is hired to join the Clearwater team.
Research and Development
Clearwater Analytics has been recognized for its innovative service offerings
throughout the companys history. Awards recognizing these innovative practices
include Technology Firm of the Year (2013), Captive Review, Innovative Company of
the Year Idaho Technology Council (2012), Deloitte Technology Fast 500 Award (No.
167) (2011), Business Finance Best of Breed Software Roundup (2010), and Deloitte
Technology Rising Star Award (2008). Stakeholder satisfaction rises with the

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introduction of new developments in response to client offerings. Client feedback
mechanisms have enabled Clearwater to develop tools missing and desired in the
market place. An example includes the roll out in 2014 of Automated and Simplified
Complex Tax Investment Accounting and Reporting Processes in response to the
growing tax reporting needs of clients (Henderson). Continuous innovation is
expected by stakeholders and requires a significant investment in research and
development. In response to the need for continuous innovation, Clearwater has
integrated continuous product development into the daily practices of processes by
listening and communicating extensively with clients. Employees are encouraged
and expected to listen for the evolving challenges clients face to then provide a
tailored solution.
A limitation within Clearwaters R&D processes is due to the focus of developing
products or services in response to evolving customer needs rather than innovative
product developments which can create needs. The R&D focus is to be a reactor
rather than a creator. Clearwater does not currently provide a "What-if" tool for
analysis which is arguably a downfall in its service offerings. (Former employee.
Personal Conversations. October 10th 2015). If R&D processes were structured with
the idea of creating needs through innovations rather than solutions in response to
challenges, their operations and service offerings would heighten and stakeholder
satisfaction could rise.
Corporate Planning
Steps within corporate/strategic planning include the collection of data,
deliberation, and finally a decision. To continuously improve and meet stakeholder
satisfaction, the data collected should be involving the companys strengths,
weaknesses, opportunities and threats to then analyse and respond to. Company
objectives, and the steps necessary to achieve those goals, are a product of
corporate planning processes; setting milestones, and communicating the mission
throughout the organization. Corporate planning is designed to drive the culture of
continuous improvement and to set the company up for success long term by
anticipating growth before it is a constraint. Clearwaters corporate team has
planned and set objectives for the future by investing in more physical space as well
as contributing to a potential pool of resources. In May of 2016 Clearwater is set to
move into Gardner Companys New City Center Plaza in downtown Boise with the
construction of a 200,000 square-foot building to accommodate the companys
current and future space needs. ("Clearwater and Gardner Company Announce
Plans for New Clearwater Building in Downtown Boise")Clearwater contributed to a
major project of moving part of the computer science program of Boise state into
the same building to support local university education and encourage collaboration
with the students. The investment into future growth and potential within the
community raises stakeholder satisfaction by communicating to all that there is
anticipated and prepared for growth at Clearwater. Corporate Planning is controlled
as the company is private and the owners are also the founders. The process,
hence, is limited in in a sense to the complete control owners have in developing
company objectives. The characteristics of this leadership type is innate in a
traditional hierarchy. Employees in the past have indicated that leadership was not

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attainable through the structure at Clearwater. (Former Employee. Personal
Conversation. October 10th)( Working at Clearwater Analytics) This feeling, if
more widespread, could be a potential source of employee turnover as the company
grows.
Bridging Processes
Internal Processes
Compensation Management
Full-time employees receive a competitive compensation as well as a benefits
package including a 100% premium paid for employees medical, dental, and vision
benefits, Employer contributions into a health savings account, 401k matching with
immediate vesting and Immediately eligible for paid time off and holiday time. The
benefits given to all employees immediately after employment has had a positive
impact on employee culture and drives internal commitment within individual
employees. The internal commitment can be attributed to the sense of value that
employees feel. From the beginning, the hires are treated as part of the team and
trusted to successfully complete challenging assignments. (Clearwater Personnel.
Personal Communications. October 26, 2015). Internal commitment of employees is
a by-product of high stakeholder satisfaction.
A fragile or missing internal process of compensation negotiation could limit the
potential growth of Clearwater. Though not a current and pressing challenge, there
is a limited offering of base compensation for employees in comparison to similar
positions in other companies and industries. Talented employees have historically
been recruited by competing organizations that have the financial backing to offer
significantly higher compensation. (Former Clearwater Employee, Personal
Communications, October 20, 2015) This is supported by data regarding average
pay for given positions. Account mangers nationally make on average about
$79,000 / year whereas account managers at Clearwater make roughly $45,000
(Salary: Account Manger) to prevent a decline in stakeholder satisfaction,
structured and documented paths to lift compensation levels could be implemented.
These pathways to rise in compensation levels could be performance based or base
pay with loose language to maintain a high level of employer discretion while
providing a framework for employees to better see potential growth opportunities
and in turn increase stakeholder satisfaction. (Best Compensation Practices)
Data Management
Management of Corporate Data Quality (CDQM) involves all the preventive and
reactive procedures and activities necessary to provide and hole high quality data.
High performing CDQM includes compliance with regulatory and stakeholder
standards, policies, and procedures. Control processes for CDQM include clear
responsibility areas for all data in the system, standard procedures, and guidelines.
Software applications support the activities of Corporate Data Quality Management.
Their use must be planned, monitored, managed and continuously improved.
Clearwater offers data management as a service for clients. As that is their service

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offering, their own data management processes in required to be 100% accurate
and effective. Clearwater reconciles, validates, and closes the books every day to
provide up to date accurate information. (About Clearwater Analytics) Employees
go through a rigorous training to identify errors while the system is created to
prevent any abnormalities from slipping through.
Conclusion
The design, implementation, and control of process management at Clearwater
Analytics has and continues to have success in meeting stakeholder satisfaction.
Specific process successes include the feedback mechanisms within the company,
the hiring process, employee support network, data management, client services
process, strategic planning and investments into resources. Such activities are
interdependent. There is greater overall functionality of the processes as a whole, or
as a system, then offered through the sum of the individual parts. Clearwater in
comparison to competitors including automated platforms such as Advent,
Sunguard, SS &C, and PAM and the traditional manual reporting system Excel offers
a clear advantages through a unique offering of a streamlined system and
outstanding customer services. Potential sources of limitations are within the
specific structure of the organization and the individual activities within process
areas. I recommend to redesign the traditional hierarchy to a Lattice Organization
Structure, with little to no hierarchy of power, in order to maintain a team centric,
trusting, and positive culture with company growth. Implementation of structured
R&D practices such as the standardization of search for application of new
technologies and testing to evaluate the potential product or process options would
further grow Clearwaters service offerings to continue market dominance in
financial reporting software services. Compensation management practices should
be evaluated to reconsider if changes in base pay negotiation practices would
realize a greater benefit than cost.

Bibliography
About Clearwater Analytics. (2013). Retrieved October 8, 2015, from http://clearwateranalytics.com/about

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Best Compensation Practices. (2000, July 11). Retrieved October 29, 2015, from
http://www.wageandsalary.com/care/gov/comppractice.pdf
Clearwater Analytics Interview Questions. (n.d.). Retrieved October 22, 2015, from
http://www.glassdoor.com/Interview/Clearwater-Analytics-Interview-QuestionsE297676.htm
Every Insurer Needs Five Things. (2013). Retrieved October 20, 2015, from http://clearwateranalytics.com/insurers/solutions
Henderson, N. (2014, December 18). Clearwater Analytics Rolls Out Enhanced Tax Portfolio
Accounting and Reporting Functionality. Retrieved October 18, 2015, from
http://clearwater-analytics.com/announcements/clearwater-analytics-rolls-out-enhancedtax-portfolio-accounting-and-reporting-functionality

O'Donnell, A. (2014, May 29). Insurance Innovation Reporter. Retrieved October 21, 2015, from
http://iireporter.com/clearwater-analytics-improves-investment-policy-compliancemonitoring/\
Rodgers, T. (2012, November 13). Clearwater Analytics Client Testimonial - Tim Rodgers. Retrieved
October 16, 2015, from https://youtu.be/IG9tHGMnwJQ
Salary: Account Manager. (n.d.). Retrieved October 29, 2015, from
http://www.glassdoor.com/Salaries/account-manager-salary-SRCH_KO0,15.htm
Working at Clearwater Analytics. (n.d.). Retrieved October 31, 2015, from
http://www.glassdoor.com/Overview/Working-at-Clearwater-AnalyticsEI_IE297676.11,31.htm