Digital transformation initiatives are everywhere in the financial sector. Firms of all sizes are striving to become faster, boost innovation, and ultimately build or strengthen their competitive advantages. But what does this mean for those on the front lines of these projects? What are the best ways to bring about technological change at your organization? In our experience, three leading practices are:
- Easing the transition with small integrations
- Boosting innovation by enabling broader collaboration
- Speeding up the deployment with agile development methods
Integrate new with old to ease the transition
Making major changes all at once is a risky proposition. Modern, cloud-based tools have broad integration capabilities to readily leverage existing functionality and data. Start by integrating small but essential functionality and grow with success. Look for processes within your department that rely on legacy software or equipment. Identify bottlenecks in the flow between customer request and completion. Or add important new functionality. It is important to get stakeholders involved early to ease their transition and let them know how they will benefit.
How does this work in the real world? Let’s look at a legacy trading system. Implementing new features is taking longer and longer. Staff are struggling with missing and outdated models and causing unanticipated consequences with their workarounds. Don’t try to replace everything at once. Start by implementing a new system just for those items that the legacy system has the most difficulty with. APIs and other integration techniques enable you to pull the data that you need and write the appropriate results back to the legacy system. To get the biggest impact, part of this project should include review and revision of underlying processes. As others see the benefits you broaden the scope, updating processes as you go until you can finally retire the old system.
Make collaboration easier to boost innovation
Making it easier for developers to collaborate with each other and with the quants and traders who use their work, is a fundamental part of digital transformation. First, you need transparent source code, so that everyone can see how the function or algorithm works. Too many legacy systems operate as black boxes, forcing users into workarounds or making them rebuild critical components. Then, your tools need comprehensive authorization and role management capabilities to effectively control who can read and who can modify the code. Getting more of the right eyes on complex algorithms and financial models is a great way to find opportunities for improvement and spark new ideas.
Another important part of collaboration is reducing duplication by making it easier to share and reuse existing work. Modern development frameworks and version control systems are essential to this task, reducing developer overhead and helping everyone use the most appropriate version. Tight integration between version control, code reviews, and integrated development environments smooth development workflows. Without these capabilities, groups go off and build what they need with the most readily available tools. This results in a bunch of code silos that do not interoperate, are difficult to support, and do not contribute to the overall intellectual property of the company.
Adopt agile methodologies to speed new functionality
One of the biggest advantages of digital transformation is the shift to modern development methodologies. The agile development approach is based on the concepts of continuous integration, improvement, and delivery. Frequent, iterative releases of functionality increase the flexibility and adaptability of the organization. Critical new functionality gets to users sooner and early feedback and iterative changes improve quality and user satisfaction of the whole system.
Tools based on agile development processes make it easier for everyone involved. Automated workflows help manage versions, reviews, quality control, and deployment to production. Granular controls enable the organization to find their own pace. Integrated testing frameworks ensure higher quality releases and overall resilience. Layered package capabilities mean that each group can separate experimental functionality from production code, without affecting overall stability or performance. Firms can get new and updated analytics to the front office faster, and more easily introduce experimental features such as machine learning.
Beacon Platform provides the optimal transformation tools
At Beacon, we are seeing a lot of positive results from clients that have adopted these digital transformation practices. A wide range of integration capabilities makes it easy for them to begin the process of adding new functionality. Transparent source code and a collaborative development environment improves code reuse. A robust and controlled production environment enables them to quickly but safely develop and deploy new models, analytics, and applications. Developers can focus on adding value to the business instead of the core infrastructure. Overall, our clients are becoming more nimble and can respond faster to significant market changes.