Overcoming Challenges when Implementing an Order Management System (OMS)

Order Management System OMS Implementation

In today's highly competitive business environment, asset managers are constantly seeking ways to enhance profitability, access new markets, and reduce costs. Choosing the right core systems to support these objectives is crucial.

When implementing a new Order Management System (OMS), several operational challenges often arise that require careful consideration and analysis. In this article, we will explore the key operational issues faced when implementing an OMS and provide comprehensive insights on how to address them effectively.

Assessment Phase

Tailoring Solutions to Meet Diverse Requirements

When it comes to selecting the systems for daily operations, asset managers have various options, such as single or multiple vendors that cover Front Office, Front Office to Middle Office, or Front to Back. Limina recognises that there is no one-size-fits-all solution, and as such customisation becomes essential to meet diverse requirements.

Therefore; for each project, consultants such as Liqueo prioritise understanding the client’s unique needs, identifying the most suitable approach, and proposing tailored solutions based on the principles of time, budget, solution design, and ongoing follow-up.

Aligning Workflows and Processes

During the implementation of a new order management system, a critical consideration is whether the workflow of the new system should align with the existing processes. While many companies opt for a "like-for-like" implementation, replicating the exact processes of the previous system, it is important to acknowledge that a new system may not necessarily follow the same procedures. Factors such as new data languages, design architectures, different workflows, data treatment methods, and interaction with external systems can lead to deviations from the previous process.

OMS Implementation Design Phase

Setting the Foundation for Success

The design phase of a project plays a crucial role in its ultimate success. It is essential to have a comprehensive understanding of data collection and treatment. Not taking enough time during this stage can lead to major problems during implementation, which may only become noticeable after the system is already in use. Some of the common issues that may arise include missing data, incomplete or incorrect workflows, inadequate representation of the internal structure, and integration problems between systems.

To mitigate these issues, adopting good practices is essential. While tight timescales can pose a challenge, regular meetings between you and the involved software vendors should be conducted to establish clear release plans, timelines, and approaches. It’s important to also include existing vendors and service providers, who might interface with the new solution.

Best Practices for a Proper OMS Design Phase

To ensure a well-executed design phase, consider the following suggestions:

• List all internal procedures that will be directly or indirectly affected by the new system.
• Identify and include all systems that require integration with the OMS.
• Create an interactive map that visually represents the workflows and connections, both internal and external, to facilitate a comprehensive understanding.
• Determine the required data, establish effective data collection methods, and address any existing data gaps.
• Involve key internal stakeholders in the process definition to gain valuable insights and ensure a holistic approach.
• Document all planned tests to be conducted at each phase of the project, including provisions for re-testing in case of failures.

Test Phase

Importance of Thorough Testing

The test phase is as crucial as the design phase. With comprehensive test coverage, it is possible to identify up to 90% of potential issues before the system's launch. Extensive testing also helps internal stakeholders become familiar with the new system and understand how it will transform the existing operating model. It provides an opportunity to address concerns and issues raised by those who are most familiar with the current operating model.

Data Integrity and Impact on Workflow

Data integrity lies at the heart of any fund manager software implementation. The link between financial data providers, the processed data, and the system is often underestimated but holds tremendous importance. Missing or incorrect data can jeopardise the entire workflow and create issues within the organisation or between internal and external systems. During the configuration stage, it is crucial for key stakeholders to rigorously verify and test the data to ensure its accuracy and full coverage by the new system.

Case Study: The Consequences of Overlooking Data Considerations

Consider the case of an Italian asset manager expanding into derivatives using a new OMS and Execution Management System (EMS). Unfortunately, the new system required additional data for fund managers and traders to carry out their work effectively. Failing to consider the impact of this new data on the workflow resulted in a compromised implementation process, leading to a delay of over a year in the system's launch.

The Target Operating Model (TOM)

An important stage in the preparation, ahead of an OMS implementation, is to consider the Target Operating Model (TOM). The TOM can serve as a summary between the old and the new system. It is advisable to start with a new TOM from scratch, working closely with the vendor to determine which aspects of the old TOM should be retained, replaced, or eliminated. By simplifying and streamlining processes operational efficiency can be further enhanced.

Conclusion

Implementing a new order management system involves addressing various operational challenges. By carefully assessing requirements, aligning workflows, conducting a thorough design phase, performing comprehensive testing, ensuring data integrity, and considering the target operating model, asset management firms can overcome these challenges and successfully implement a new OMS. Taking these factors into account not only drives customer success but also improves overall operational efficiency, helping firms achieve their objectives effectively.