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Enterprise systems, migration and the need for operational agility

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Operational heads within most asset management firms will at some stage in their careers have had to choose between a best of breed environment and an integrated system.

The one factor that is currently making integrated, enterprise systems more attractive to asset managers over best of breed applications is hosting. If a vendor can provide an application as a software-as-a-service hosted application where the provider is taking on the managing of the technology, some of the regression testing, database management and so on, then you can reach a point where the costs are more controlled and the ability to change is greatly accelerated: you can upgrade much quicker. This kind of managed service can be much more agile than with a traditional installation of an integrated system.

Fundamentally, systems selection is about being on board with the right vendor rather than the right platform. You are better off working with vendors that will adapt to the asset manager rather than expecting the asset manager to adapt to the vendor. It is not an academic debate: you need to find out what is right for you as an asset manager. The operational discussion should be less around whether enterprise or best of breed is the better option and more focused on the culture of the systems vendors.

If I was building out my ideal operational infrastructure within an asset management firm at present, I would select a core platform and then plug in a limited number of best of breed components where the additional functionality is most needed. Heads of desk should be pressed hard to prove that the business case for those best of breed applications.

Ironically, it is harder to migrate away from a best of breed environment rather than an enterprise one, simply because there are so many applications to turn off. As you move off each individual application onto an enterprise system, there is rarely any consistency in the movement of the data and the process will involve a high level of debugging and manual workarounds.

In my experience it is very difficult to migrate from best of breed to a fully integrated environment. It has to be done very slowly and gradually. In most instances it is a naive business case to completely switch from one to the other. You should just look to replace the elements of your IT landscape that really need to be altered.

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