The Future of Back Office Systems
| Date: | July 2006 |
| Author: | Catherine Doherty |
| Price: | £500 to non-members of the Investit Intelligence Member service |
This report explores the benefits of 'one big system' in the back office versus the 'lots of specialist systems' approach. Is it feasible to ask a system to cover all functional areas and securities? How good is the technical architecture that links together multiple systems and processes? What does the future hold?
The research report also discusses vendors and systems - who are the rising stars and who might be cash cows? We explored a number of case studies of whole replacement projects and operational models. Who's getting it right?
Table of contents
| Management Summary | 1 | ||
| 1 | Introduction | 3 | |
| 1.1 | History | 4 | |
| 1.2 | Paper aim and methodology | 5 | |
| 2 | The Scope Challenge | 7 | |
| 2.1 | Core back office services | 9 | |
| 2.2 | Supporting investment services | 16 | |
| 2.3 | Supporting client experience services | 22 | |
| 2.4 | Challenging new processes | 26 | |
| 3 | The Asset Class Challenge | 31 | |
| 3.1 | Cash and money markets | 32 | |
| 3.2 | Equities | 33 | |
| 3.3 | Bonds and collateralised debt | 34 | |
| 3.4 | Unitised funds | 35 | |
| 3.5 | Multi-manager | 36 | |
| 3.6 | Property | 37 | |
| 3.7 | Private equity | 38 | |
| 3.8 | TBA (To Be Announced) contracts | 39 | |
| 3.9 | Derivatives | 40 | |
| 3.10 | Repurchase agreements | 42 | |
| 3.11 | Producing combined views | 43 | |
| 4 | The Complexity Challenge | 45 | |
| 4.1 | Organisational complexity | 45 | |
| 4.2 | Process complexity | 46 | |
| 5 | Selecting a Solution | 49 | |
| 5.1 | The changing vendor marketplace | 50 | |
| 5.2 | Why can’t we use a sell-side system? | 52 | |
| 5.3 | Buy/build influencers | 53 | |
| 5.4 | Bureau service | 54 | |
| 5.5 | Code purchase | 55 | |
| 5.6 | Partnering | 55 | |
| 6 | The Back Office System Project | 55 | |
| 6.1 | Technical considerations | 58 | |
| 6.2 | Case study 1 - The back office albatross | 65 | |
| 6.3 | Case study 2 – Consensus as king | 67 | |
| 6.4 | Case study 3 – At what cost progress? | 69 | |
| 6.5 | Case study 4 – Mid-project departures | 71 | |
| 6.6 | Case study 5 - Encapsulation | 73 | |
| 6.7 | Case Study 6 – Creating change | 74 | |
| 6.8 | Project costing | 76 | |
| 7 | Conclusions | 77 | |
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