The push for OMS rationalization is no longer confined to the Front Office. As asset managers seek to streamline operations, the focus has shifted towards a holistic view of the firm’s technology infrastructure. The goal is no longer just about satisfying the immediate needs of investment teams but about addressing broader concerns related to cost, risk, and efficiency.
System Consolidation and IBOR Integration
The trend towards system consolidation is evident as asset managers grapple with the maintenance of complex integrations and the inherent fragmentation of data. For example, the integration of an OMS with IBOR/portfolio accounting platforms is now a standard expectation. There is also an increasing demand for platforms that support both public and private assets as more traditional managers diversify into private markets. Asset managers are keeping a close eye on the evolution of integrated solutions, whether through in-OMS capabilities or third-party platforms, to achieve seamless interoperability.
Reducing Infrastructure Costs with Cloud-Based Solutions
With increasing cost pressures, asset managers are critically evaluating their technology expenditures. Traditional OMS implementations, which entail hefty investments in infrastructure and maintenance, are being replaced by cloud-based alternatives. These offer more flexible pricing models and a significantly lower total cost of ownership. The shift to the cloud is now a decisive factor in the viability of existing platforms.
‘Buy’ vs. ‘Build’ Mindset
Asset managers have been moving away from in-house software development for well over a decade, recognizing that the costs of complex, custom-built systems are unsustainable, particularly as they approach end-of-life. Those that still utilize a proprietary OMS are likely to find that the market offers solutions that match or exceed the capabilities of home-grown applications. Vendor solutions also offer scale to address an increasingly complex investment landscape with the added promise of gaining access to technological innovations, such as AI, machine learning, and big data analytics.
Conclusion
OMS rationalization is being driven by a confluence of factors. The move away from proprietary technology towards more scalable, vendor-provided solutions reflects a broader industry trend towards efficiency and innovation. As cloud-based platforms become table stakes, they offer a path forward that balances cost-effectiveness and capabilities with the agility to adapt to future technological advancements. The rationalization of OMS is not just a response to immediate needs but a strategic repositioning for the future of asset management.
Olmstead has a proven data-centric methodology, deep industry experience and the skill sets necessary to lead asset managers through a disciplined technology assessment from ‘front-to-back’. If you are considering transformation, let us show you why we should be your partner.