Implementing a New Investment Accounting System Faster


One of the longest, riskiest, mostly costly, and painful projects that an investment company can undertake is the implementation of a new investment accounting system.  These applications are at the heart of an investment operation, providing accounting book of record (ABOR), investment book of record (IBOR), and key data for client reporting.  But, because these systems are so integral to investment company operations, replacing the old, legacy system with a modern, new investment accounting system can be arduous.

These projects are typically done only every 15-20 years, which means that in-house expertise in and around implementing a new investment accounting system often does not exist.  When it does exist, that knowledge is often aged and limited in scope to a single implementation of an also-aged vendor application.  For these reasons, the first smart decision a company can make to move things along faster and reduce business and project risk is to hire outside help.  The use of consultants to aid in the implementation, while it can be costly, is invaluable.

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But choose your consulting partner carefully.  You will want a company that has worked specifically in implementing new investment accounting systems before (and extensively), knows how to work well with your vendor, is not afraid to challenge both you and the vendor (nicely) on decisions that either are making, and can assist in change management.  After all, part of the value of outside consulting help is the perspective that they bring from other implementations, including the “people” aspect of the changes.  In fact, it is often more about their knowledge of what doesn’t work, than what does.  Remember, you are paying them for their experiences in this specific space, as well as their intense focus on your success, in both the project and in business.

When involved in the project itself, there are areas where you can speed things along and areas where you should absolutely NOT take shortcuts.  When it comes to business requirements, you should invest the time and resources to get them right.  This is not an area to take shortcuts.  Thoroughly vet and document your requirements.  Socialize changes from existing requirements across stakeholders in your organization.  If the foundation and understanding of your business requirements is not solid, your implementation can become a disaster quickly.

Where you CAN (and should) speed up your new investment accounting system implementation is on the technology side of the project.  And a good consultant will already have tools available to you to help accelerate those parts.  The biggest areas that can leverage existing tools are building data conversion programs, developing interfaces between the new application and other systems, and data comparisons for testing and validation.  While investment accounting vendors sometimes have tools that can help, they are often limited and there are also niche software tools that have been developed specifically for investment accounting system implementations.

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The key challenges in developing conversion programs and interfaces are primarily related to the proprietary formats that most investment accounting vendors have for getting data into their applications.  You, and your development team, would need to learn and understand these new data layouts, create mappings between systems to/from the new investment accounting system, develop the programs to create the data in a way that the new system can consume, test their new programs, and them support them.  All of this takes time and is, largely, unnecessary considering existing applications that are already built specifically for this purpose.  I have seen companies trim MONTHS off of their project timelines by leveraging tools like Mt. Airy Technologies’ Emissary software.  Better yet, tools like Emissary, when used to integrate systems, become an on-going part of a company’s toolset which makes maintaining interfaces, data comparisons, and reconciliations simpler.  And some create an automated data lineage simply by turning them on.

If you are about to implement a new investment accounting system, after having been involved in more than a dozen of these projects myself, I strongly suggest you employ software tools available in the market to speed things up.  Your IT organization should not be building migration tools, interfaces, or reconciliations from scratch.  It’s simply unnecessary and will only add time and risk to an already long and risky project.