In the world of technology, it’s easy to get stuck on what’s new – and equally easy to stick with the old out of fear of the new. We all know that the technology highway is littered with great inventions which simply crashed and burned in the marketplace.
This was never truer than in the world of complex applications like funds administration software.
What’s clear in the applications world is that the longevity of the technology has more to do with your vendor’s vision than with the underlying technology itself, which is almost certain to be subject to rapid change.
It’s important to partner with a vendor who understands the fundamental business requirements and has the wherewithal to take advantage of the latest technology to make sure that your business purpose is achieved in the best possible way.
Rapid technological change is always driven by either the push of new invention, or the pull of business needs.
On the push side, new advances, for example, the constant evolution of underlying technologies from major vendors such as Microsoft, Oracle and Progress, allow new functions and possibilities in applications.
To make sure your systems do not become unwieldy or redundant, you need to ensure your software vendor is using a solid and sustainable underlying technology and has a clear strategy to keep up-to-date.
If your application is lacking fundamental administration functions such as unit pricing, data entry and validation rule sets, then it is likely your vendor is lagging behind on old technology.
On the pull side, change is being driven by business needs and the key driver today is regulatory change.
The new licensing requirements for funds are forcing fund managers to take a good look at not only their policies and procedures but also their technology infrastructure.
The opening up of the market with fund choice is also forcing funds to review their member communication, speed of response and customer relationship strategies.
Secure web services, seamless integration across administration functions, e-commerce, IT security, back-up and redundancy requirements are all key considerations for a sound technology infrastructure specific to administration.
With over 50 per cent of large funds still using legacy systems, there is a lot of change ahead. Some funds are moving to an outsource model to achieve this new functionality, while funds that run their own administration are choosing to either ‘add-on’ to their existing solutions for things like web functionality and unitising of investment pools, or to implement fully integrated modern systems.
Both models have advantages and disadvantages. Reliance on vendors, compliance updates, technology architecture and user training are all considerations.
Patching disparate systems together is often costly, time-consuming and complex, and can lead to data duplication, slow performance, data errors or worse – exposure to fraudulent activity. Considerable time, effort and ultimately expense can be used to identify and then resolve integration issues.
In the longer term, replacing the old with a fully integrated system can slash costs and complexity, and can deliver greater longevity of technology through easier upgrade paths.
What’s more, there are a number of fully integrated systems on the market today that have advanced design and comprehensive features. They accommodate the ever-changing compliance landscape, whilst maintaining flexibility across core functions to deliver enhanced features.
The single system then becomes the single ‘source of truth’ – the single vendor is responsible for compliance, data integrity and feature advancement.
So making sure you partner with a proactive vendor that has the strategic vision to keep up with technology change is vital to longevity of your software investments.
Kurt Groeneveld is the managing director of Supercorp
