You've had the demos and you've been impressed by the functionality and opportunities that your new Investment Management System (IMS) will bring to your business, but now you need to decide how you navigate the complexities of implementing and how you deploy this new IMS with your business operating model and existing technical infrastructure.
Which IMS Deployment style is right for your business?
One of the earliest and most critical questions that needs to be answered is, do you migrate everything to the new platform all at once and “Go Live”, an approach often referred to as "Big Bang", or do you move across gradually, with a "Phased" migration approach?
The first thing to note is that there is no single right answer to this question. The best solution is the one that allows your business to move across in a timely, risk-mitigated and controlled manner, with minimal impact on your daily workflow. All whilst considering all ‘moving parts’ that need to feed into the planning process, such as 3rd party dependencies, the timing of new launches or alignment with strategic business objectives.
For some organisations “Go Live” can be achieved with a single Big Bang approach, which can be achieved across a weekend; for others it may be a Phased transition across a period of several months, rolling out by (for example) asset class, fund group or geographic location.
What factors should be considered?
When assessing the optimum approach for your business, there are several crucial factors to consider.
- Front office impacts: How will managing portfolios and/or trading across multiple platforms impact your front office operations?
- Operational impacts: How will managing trade feeds from, and settlement across, multiple platforms impact your operational efficiency?
- Technical impacts: Will you need to maintain additional platforms in your infrastructure for a period? and/or will you need to maintain multiple data feeds?
- Product set: How will the complexity of your products impact the migration to a new platform in a timely manner? Derivatives are notoriously more complex to migrate than bond or equity holdings for example.
- Data: How will you manage and consolidate data sets from multiple platforms?
- Budget: How much will it cost to run the implementation project for an extended duration
- Stakeholder risk appetite: How much risk are your stakeholders willing to take? Would they prefer a quicker but riskier approach or a slower but more controlled but costlier approach
- Reporting requirements: How will your reporting requirements change? Will you need to report more frequently? Will you need to report on different metrics? Does timing play an issue for example mid-month vs month-end? Are there changes to regulatory reporting processes or client reporting?
It’s important to consider all these factors when assessing the optimum approach for your business, however, there may be other things specific to your business that you need to take into account when looking at IMS deployments as it is all dependent on
your specific circumstances.
What are the Advantages & Disadvantages of a Big Bang IMS Deployment
Advantages of a Big Bang IMS Deployment
- Complete functionality is delivered in one migration, avoiding the need for multiple phases
- The absence of interim operating models streamlines processes across the entire value chain, including trading, MO, operations, performance, and regulatory reporting
- There is no need for interim technical solutions such as interfaces, feeds, and data, further simplifying the implementation process
Disadvantages of a Big Bang IMS Deployment
- Simultaneous and substantial changes for all stakeholders, which may lead to potential disruptions and challenges
- Due to the dependency on multiple components, the deployment timescales may be longer than planned
- Higher degree of financial, operational, reputational and regulatory risk
What are the Advantages & Disadvantages of a Phased IMS Deployment
Advantages of a Phased IMS Deployment
- A risk-mitigated approach enables earlier deployment of limited functionality, reducing the potential impact of issues and mitigating risks
- The initial delivery of components (often referred to as a "soft" go-live) allows for the validation of technical infrastructure and data flows, providing valuable feedback for subsequent phases
- Phased IMS deployment aligns with Agile development methodologies, allowing for iterative and flexible delivery that can adapt to changing requirements and priorities
Disadvantages of a Phased IMS Deployment
- A phased approach may require a longer timeframe to complete the implementation compared to a Big Bang approach
- There may be an increased project cost associated with the extended timeline and additional planning and coordination required for each phase
- Maintaining an interim operating model between the initial and final phases can add complexity to the overall process, potentially creating additional operational challenges
Summary
It is crucial to refer to the IMS deployment program/project's mission statement and goal when making complex decisions. Failing to consider all aspects can lead to delayed or failed implementations, causing stakeholders and users to lose confidence in the organisation.
More so, such incidents can result in adverse financial consequences, such as project overruns and remedial activities required to complete the project. Therefore, keeping the overarching goal in mind throughout the decision-making process is essential for a successful implementation.
City Integration can help your organisation navigate all of the above questions and more, drawing on the experience of specialist professionals with more than 25+ years of experience delivering precisely these changes at blue-chip organisations such as leading investment managers, investment banks and sovereign wealth funds.
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