KLP

Client Story

Moving core IT platform and data management capabilities to the cloud

The subsidiary of Norway’s largest pension fund, KLP Kapitalforvaltning AS (KLP) was recently faced with the challenge of applying more internal IT resources to maintain the operations of their increasingly complex and large applications in-house, or out-task these activities to allow them to focus on their core business and respond faster to new market opportunities. Partnering with SimCorp for their journey to the cloud allowed them to leverage industry best practices and standards for their target operating model.
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KLP's long-term cloud strategy

In 2018, KLP Group took a long-term strategic decision to apply a Software as a Service (SaaS) model where appropriate, driven by the need to balance the right level of resources to maintain applications in-house with the increased need to always keep skills and IT capabilities up to date. They initially kicked off a 5-year long program to develop a new pension platform, rewriting most of the old legacy applications and implementing this in new technology. KLP Group is now in the process of defining their cloud strategy for the entire group, including all their subsidiaries. The cloud strategy is due to be presented to the management team and board of directors in early 2021, and the company has already taken strides in executing on this strategy.

KLP’s operations had grown significantly in both size and complexity since they started using SimCorp Dimension as their core investment management platform in 1998. Combined with the corporate cloud strategy, this presented itself as an opportunity to create more scalability and elasticity in their operations as well as optimize their total cost of ownership.

 

Transitioning the SimCorp Dimension deployment model from “on premise” to “managed operations”

After discussing options for moving to the cloud with some of its regional peers, KLP found that SimCorp’s managed application services could help mitigate risks and scale up operations to eliminate capacity issues. It also provided a great intermediary step to lift SimCorp Dimension to the cloud. In May 2019, KLP reached an agreement to gradually transition their on-premise installation of SimCorp Dimension to a managed operations environment and reconfigured its servers as part of the transition phase. In October 2019, KLP went live with SimCorp’s Application Management Service (AMS) and Validation and Test service. In addition, the company licensed Oracle via SimCorp.

Now we have a system that is monitored constantly, it’s running well, errors and risks are mitigated immediately and basically, I can sleep safe at night knowing I have the required resources available.Tore Hjorth, Business CIO at KLP Kapitalforvaltning AS

Tore Hjort 2

Tore Hjorth, Business CIO at KLP Kapitalforvaltning AS

More stability with no downtime, even during the pandemic

The fact that KLP was live on SimCorp’s managed services before the pandemic hit, meant that the firm benefitted from superior operational resiliency to deal with the heightened volatility. The new application management model of SimCorp Dimension combined with KLP’s local IT provider running the operating system and core oracle service has increased the performance of the system, enhancing stability and with no downtime. The platform is under constant surveillance and risk and errors mitigated instantly with the help of SimCorp’s AMS team. Optimizing the database and the server setup meant that they have been able to extend the lifetime of their current database servers for another three to four years.

As part of the agreement with SimCorp’s AMS team, there is a commitment to pursue optimization activities to help standardize KLP’s installation and support the company’s future cloud journey. It also comes with significant saving in terms of implementation time and resources as new standard modules can more easily be plugged in.

 

Selecting SimCorp Gain in the Cloud to improve data quality

KLP had been a customer of AIM Software, using Gain for their reference data needs since 2006, well before its acquisition by SimCorp in 2019 when it was renamed SimCorp Gain. When AIM Gain 4 was retired, the company went through a thorough RFP process, managed by Cutter, to select a new reference data management system. A proof of concept was ultimately done with AIM Software and one other vendor. Operational support in terms of hosting was again a key consideration for KLP in order to offset local infrastructure costs and streamline data-driven processes within the business.

We wanted to move towards SaaS to help us modernize our current landscape. Gain in the Cloud was the best choice for us because it has the best-in-class data management capabilities, productized adaptors to data feeds, and seamless integration with SimCorp Dimension.Tore Hjorth, Business CIO at KLP Kapitalforvaltning AS
 

At the end, KLP selected Gain 5.0 for their security master and portfolio pricing master, delivered as a hosted managed service via Gain in the cloud. The selection of SimCorp Gain was part of a process to modernize KLP’s data management landscape and leverage innovative technology and integration into the cloud. SimCorp Gain was chosen for its best-in-class data management capabilities, productized adaptors to data feeds and seamless integration with SimCorp Dimension. Additionally, KLP benefitted from increased quality of data and the overall expertise of the SimCorp User Community.

 

Next steps in KLP’s cloud journey

KLP’s decision to move both SimCorp Dimension and SimCorp Gain to a managed service model has been a crucial step in their long-term journey towards the cloud. Crucially, it has provided them with a scalable and robust operating model to cope with even the most challenging times such as the recent pandemic. While there are no immediate plans to make changes to their set-up in the coming year, the move from a 2-tier to a 3-tier architecture of SimCorp Dimension is being closely looked at. Likewise, the SimCorp – Microsoft Azure partnership is seen as compelling to support their future requirements. For the time being, a SaaS approach combined with managed services is regarded as their optimal target operating model in order to maintain a certain level of customization.

Quick facts

Founded: 1949
Headquartered:
Oslo, Norway
Total assets under management:
NOK 600 bn
Employees:
70
Website:
www.klp.no/

 

 

About KLP

KLP Kapitalforvaltning AS, a subsidiary of the KLP Group, is an asset management company with a license from the Financial Supervisory Authority of Norway to manage mutual funds and alternative investment funds, as well as active management and related services. It manages assets on behalf of the pension and life insurance business in the KLP Group and other customers through the KLP funds. We have 70 employees and manage approximately NOK 600 billion in a broad range of fixed income and equity portfolios.