SimCorp paper addresses mitigating “silo effect” on investment management firms

New article in SimCorp Journal of Applied IT and Investment Management reviews how a decoupled IT strategy can negatively impact a business. Provides guidelines for transforming IT architecture to empower the business.

SimCorp, a leading provider of investment management software and services for the global financial services industry, today released a new paper, “The Silo Effect: Losing the Game with a Decoupled IT Strategy.” Authored by independent consultants and a Chief Architect for Credit Suisse, the article outlines the unhealthy symptoms of a silo-based IT approach and how firms can design an integrated architecture and pursue a “managed evolution” process for success.

First published in the SimCorp Journal of Applied IT and Investment Management, the paper is authored by Bruno Bonati, Independent Consultant, Frank J. Furrer, Independent Consultant, and Stephen Murer, Managing Director and Chief Architect for Credit Suisse. The paper describes the “silo effect,” when multiple business units with individual IT budgets implement changes simultaneously without strategic coordination – leading to a decrease in efficiency and an increase in instability. Highly fragmented IT systems can create scenarios where IT hinders rather than empowers the business.

In order to develop a cohesive IT architecture, the authors of the paper recommend the following:

- Align business and IT via “managed evolution”, steering the evolution of an enterprise’s information system to increase efficiency in developing and operating the system
- Architecture management: break large information systems down into domains, providing more manageability
- Integration architecture: define the appropriate coupling and decoupling of the system’s components to ensure stability
- Develop a holistic IT strategy through more formal coordination in strategic business-IT alignment and ensure decision-making is made in a well-balanced way
- Embed the IT organization in the investment management business it serves

The paper states, “A highly developed, efficient and cohesive information system is an indispensable enabler of many of the daily operations run by investment management organizations, and must evolve in order to support the business it serves in a competitive and changing environment.”

David Kubersky, Managing Director of SimCorp North America, comments, “For investment management firms today, operating on a highly fragmented IT infrastructure can pose numerous risks and inefficiencies. We are seeing the industry move towards a holistic IT strategy and we’re pleased to see how our clients’ IT groups are becoming a strategic and vital part of the overall organization. This is why SimCorp Dimension plays such an integral role in acting as a single, integrated platform to empower the enterprise.” To read the full article see here.                                                 

Enquiries regarding this announcement should be addressed to:
Susan Peter, SimCorp North America (+ 1 917 546 4654)

About SimCorp:
Since 1971, SimCorp has been providing investment and portfolio management software and services to the world’s leading investment managers, asset managers, fund managers, fund administrators, pension funds, insurance funds and wealth managers. SimCorp’s world-class software provides global financial organisations with the tools they need to mitigate risk, reduce cost and enable growth. SimCorp is a global company, regionally covering all of Europe, North America and Asia Pacific. Listed on the NASDAQ OMX Copenhagen, SimCorp is dedicated to supporting the global investment management industry, its clients and its investors.