by Daan Smit
Implementing a major new front office solution may have left you and your colleagues fatigued – and relieved it is over. Change is hard. “Experience is something you don’t get until just after you needed it,” said American entertainer Steve Wright – a sentiment shared by many who have recently completed a front office implementation project.
No doubt plenty of people shared anecdotal experiences to help you during your deployment journey – but what happens next, after your implementation is complete?
There is more to follow-up than simply considering what the vendor tries to sell you next. It can take a while to find your feet with your new solution and truly benefit from its capabilities. This is where a structured post-implementation review and definition of next steps can help build momentum and ensure you get the most out of your investment.
Why is post-implementation evaluation so difficult?
Evaluation is harder than it seems because the tendency is to focus on project execution, rather than the fit and performance of the solution. The task of evaluating and identifying lessons learned is usually assigned to the people directly involved in the implementation. As valuable as self-reflection is, you only know what you know, and the temptation is to assess your own actions in a positive light.
No doubt the path you took to get your new solution was lengthy and challenging. Prior to implementation you will have defined your business requirements, searched for and evaluated different solutions, issued RFPs, evaluated several responses, watched numerous vendor demonstrations, checked references, and done your due diligence. Like many firms, you may have worked with an independent advisor to support your pre-implementation analysis.
Likewise, working with an independent advisor to evaluate the post-implementation effectiveness of your front office solution is the most beneficial way to improve the ongoing ROI of your front office investment. Unlike you and your colleagues, who will buy and implement a complex, large-scale front office solution only once or a few times during your careers, Elgin White consultants have executed many projects over several decades and bring vast experience to the table.
We understand the problems others have faced, how they have overcome them, and what success looks like. We know how to evaluate whether your project is delivering what you asked for and check whether your solution is delivering measurable value that aligns with your business goals. Do you have real-time, actionable data now, and a fast time-to-market for your orders? How are these defined? The competitive advantage your front office solution brings can only be measured when compared to its alternatives and the activity of your peers. This is difficult to assess for firms with limited implementation experience.
Independent advisors can help you with a structured evaluation process, provide insights from other solutions, and help to ask (and answer) tough questions. Have you optimized the time for your traders to search for liquidity, or are they spending their time on administration and reconciliation? Have you optimized the time needed for portfolio managers to seek alpha or are they spending unnecessary time getting their ideas through portfolio implementation and out to the traders?
Why is early evaluation of system fit versus business requirements so important?
Post-implementation evaluation of the fit between your new front office system and your business requirements is important because it confirms whether you are getting the results you expected now that the system has gone live. In hindsight, were your business requirements well defined from the outset or could they have been better articulated? The implementation may have ticked all the right boxes, but if your Portfolio Managers are still dumping data manually from multiple sources to Excel to conduct their analysis, several weeks after implementation, it has not been successful.
Implementations focus on addressing technical problems as they arise, but rarely zoom out to check progress in meeting overall business needs. Also, misnomers and inconsistent terminology plague this industry. Your solution may well solve the acute needs defined in the testing plan, but misinterpretation of terms may have caused the system to be implemented in a suboptimal way. People are creatures of habit. Once suboptimal workflows become entrenched in the minds of users, it will be difficult to change.
As soon as the new front office system is in use the business processes become tangible, not theoretical, making it easier for staff to refine their wants and needs. The Portfolio Manager will know what extra data he wants in a dashboard or overview. The Trader will know exactly how many times trades need to be checked and touched before they can be moved downstream. This is the time to revisit your original assumptions and specifications, and act on user feedback. Your staff will come to realize the questions they should have asked sooner, and how to differentiate between nice-to-have and must-have requirements.
Your initial requirements analysis may have focused on under-performing aspects of your previous system or improvements sought. The bread-and-butter functionality that worked well previously is rarely top-of-mind. Several weeks post-implementation it will now be clear whether that functionality is not working well in the new solution, or underperforming. You may be experiencing inconvenient loads of data to the analysis tool, missing or misrepresented numbers, or manual inputs in the order flow. The most used functions are often the areas where the greatest value can be realized by making improvements. Tackling these issues early will reap rewards and head off any lingering discontent or skepticism from users.
In hindsight, did you make the right implementation choices?
When making implementation choices you will have kept some processes the same and altered others to better fit the software solution. Often compliance was set up to mimic the previous system as closely as possible but was not optimized for the new functionality or speed. Integration from portfolio construction through OMS and EMS was kept as simple as possible, even though it could contain better trading instructions.
Those decisions were well thought out given the knowledge and experience you had to draw from at the time. Some of those decisions might have been made to limit the scope of the project and keep it manageable. Some might have been made to reduce the scale of change the organization had to absorb. Others might have been made in the heat of the moment to get the implementation across the line. These decisions were all made for good reasons and have been made the same way on countless different implementations.
But without the restrictions of a looming go-live date, and knowing what you know now, were these really the best decisions in the long run? Were the choices you made the best fit for the requirements or the best fit for the implementation schedule? Traders need to find liquidity fast and efficiently, not just have a connection to the market – has the solution optimized the workflow for the trader or merely provided a way to get an order filled? Some asset classes might have been put on hold pending implementation of the new solution. Is now a suitable time to onboard them?
Now that your staff are accustomed to the new system there will be new capacity for change within the organization, especially if that change is driven by requirements from the business. And when change makes life easier for users and other stakeholders you are more likely to gain their support. Traders and Portfolio Managers are not renowned for their patience and can be dismissive during the more tedious implementation and testing phases. Focusing directly on their needs can bring them back on board. For example, exception handling processes are not usually the primary focus during implementation – but when an administrative error in trading takes a lot of time to resolve and causes exposures to be incorrect, it at once becomes a top priority.
The experiences gained during and since the implementation will help you to refine your choices and tackle the issues where the most value can be gained.
Essential next steps – apply experience where it counts most
In implementing your new system, you have done most of the heavy lifting. Now is the time to make sure you reap the benefits of your hard work. By leveraging the vast front office planning and execution experience of Elgin White’s consultants you will gain the value from your new software solution that you expect and deserve. Given the scale of your investment, you must make sure that no value is left on the table, as soon as possible after implementation.
Elgin White has formulated a standardized approach that enables you to maximize return on investment. Our methodology efficiently evaluates your implementation and plans the most logical, achievable, and profitable next steps. Our expert advisors will check the alignment of your solution with your business needs and deliver a transparent overview of the implementation choices made, and their consequences. We pinpoint the business cases where the most value can be gained, and we detail the effort, gains, and savings you can expect.
Get more information on Elgin White’s Front Office Review Service below.