Why Fewer Technology Systems Are Better for Your Business
A few years ago, it made sense to pursue a best-of-breed approach to business application technologies to solve a precise business challenge. But the landscape has changed quite a bit, as has the technology, and the nature of the challenges. Now, firms must carefully weigh the implications of using numerous systems to perform the critical tasks involved in the investment management process across the front, middle, and back office. The critical question at hand is whether or not multiple competing technology stacks will impede business agility.
I was struck by a recent Investment News article, which recommended that advisors update at least one technology system every year either to incorporate new features or to avoid becoming obsolete. In theory this sounds reasonable. In reality, it’s an immensely time-consuming, costly exercise filled with operational risk. Think about the disparate technology stacks running your business every day. Taking even one of these offline for an upgrade can upend your business practices for days, weeks, and even months.
In an age in which business agility is paramount to maintaining a sustainable advantage, a consolidated platform can offer consistency, cost control, and ease of use. The latest iteration of comprehensive platforms can deliver the clean and centralized data essential to drive a compelling end-client experience. For example, fewer data hoops mean faster access to information and elimination of potential processing errors along the way. When you reduce complexity and centralize data and workflow, a consolidated, comprehensive platform yields benefits that are likely to surpass the advantages of a best-of-breed model.
To learn more about the benefits of a consolidated platform, read my piece, “Best of Breed vs. Consolidation Platform for Investment Management Processes – Exploring the Law of Diminishing Returns,” in Fund Technology or download our white paper, “The Integrated Platform: How Digital Technology is Reshaping the Wealth Management Landscape,” published in partnership with Celent.
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