Tips for a Successful Front to Back Office Implementation

Author: Priyesh Mistry, Liqueo Senior Consultant
In recent years, we’ve seen several key mergers in the Asset Management technology industry. This has moved the industry closer to the long-desired utopia of seamless Front-to-Back Office integration provided through one service provider.

This aim has been aided by the increasingly prevalent belief that Asset Management firms should let technology experts worry about providing and running an efficient Front-to-Back Office system, leaving Asset Managers to focus on creating Alpha. Meanwhile, advances in technology (cloud, datamarts etc.) have made it ever more achievable.

Here are some tips for an Asset Management organisation when moving to an integrated Front-to-Back Office service:

Tip 1: Shift in mindset

The Front Office system should no longer be viewed by the Asset Manager as a tool kit that is run by the internal technology experts. It is now a full service where the implementation project should be driven by the vendor, working with the Asset Manager to implement, and even enforce, standardisation of workflows where possible. This spans from portfolio modelling through to reporting. A key long-term aim is to redeploy the technology support team to other areas, thereby reducing cost and adding more value to the money-earning Front Office.

Tip 2: Implementation Senior Project Structure

A good project team structure must have:

• A senior project manager from the vendor, who navigates the vendor’s organisation escalating issues, discovering intelligence and organising the teams.
• A senior implementation manager from the vendor, who designs the environments, the workflows and organises the technical teams.
• A programme/project manager working for the Asset Manager, who assesses whether the client is suitably engaged at each stage of the project, and is knowledgeable enough to move to the next stages – especially during the critical testing phases.

It goes without saying that all three team members should work interdependently.

Tip 3: Data and the Data Matrix

A new operating model needs to be designed around the matrix of static data.

• After go-live, who is responsible for every piece of data accuracy at the start of day? Intraday? End-of-day?
• What are the depth and breadth of data validations that the vendor and the asset manager should be conducting?
• Has there been any change in data structure and how is the change process managed, authorised, governed, released?
• The delineation of work and responsibility between the Vendor data team and the Asset Manager data team is the key to successful governance of the data model.

Tip 4: Daily System Preparation

The start-of-day data loads may need to change, in order of being processed and how they are interdependent. Use of an IBOR (Investment Book of Record) makes this task easier but detailed consideration must still be given to any new data sources. Consider how they are integrated into the system and their effect on positions, orders and end reporting.

Tip 5: The Testing Journey

Despite its importance, testing is often a bit of an afterthought, due to focus on firefighting issues to achieve an accurate configuration.

The structure and length of the different types of testing should be run by a dedicated team, who are not only able to test for Day-One but can also prepare the Asset Manager to run future (user) tests with minimal effort and disruption. Automated testing, testing packs, user education and access to maintained test environments are essential on this journey. This must also be balanced with providing an up-to-date test environment for the majority of users, whilst the performance teams will want historical data to take centre stage.

In summary

Liqueo are at the forefront of implementing these changes. We work alongside the technology vendor as well as the Asset Manager to assist in achieving the new operating model. And this work is not just done from a conceptual perspective. It comes from “hands-on” experience working with Fund Managers, Dealers, Compliance, Client Services, Data Teams, Technology Teams, Middle Office and Back Office.

Here at Liqueo, we provide organisations with the skills to implement programmes successfully through our flexible workforce model, tailoring solutions for our clients’ strategic goals. We deliver an exceptional, bespoke service to every client via a dynamic and agile framework. If you are interested in how we can help you implement successful programmes or want more information about tips for a successful front to back office implementation, contact us.