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Andrew Rafalaf
Andrew Rafalaf
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Andersen Consulting Shakes Up Buy-Side Vendors with Proposed Web eSTP Project

Partnering with a select group of vendors, solution will integrate customer relationship management, trading and order management, and portfolio management and accounting. Initial rollout will be for asset managers.

Andersen Consulting is preparing to build an online straight-through processing portal, dubbed Web eSTP, that will integrate customer relationship management, trading and order management, and portfolio management and accounting.

The solution will not build out the various components, but will integrate existing solutions available on the market today. Andersen is only planning to partner with a select number of vendors, potentially exiling those that cannot interface with the outsourced solution.

Andersen's move highlights an industry drive to integrate CRM with trading functionality and portfolio accounting data. Only this week, Thomson Financial Software Solutions and PeopleSoft announced they would do the same. (See "Thomson and PeopleSoft To Integrate Back-End Systems, Build Front-Office Portal")

Although Web eSTP will eventually target broker/dealers, Jim Honihan, partner in Andersen's Financial Services Practice, explains that the solution will initially be rolled out for asset managers. He says Andersen's STP White Paper conducted on behalf of the SIA-set to be released next week-will point out that money managers, compared to brokers and custodians, will receive the lowest return on investment in STP technologies. He declines to elaborate, but added, "Suffice it to say, once the economics become apparent, more asset managers will be flocking more to the outsourcing model. Starting with CRM and then integrating to an outsourced provider for the back office, they don't have the appetite to make the investments in this T+1 transition."

Andersen has already signed an undisclosed client and is working first to integrate an industry-leading CRM solution. Andersen has found that money managers are lagging in the CRM push, many employing "low-end sale support tools a la Avenue or Goldmine," Honihan explains. He contends that none of them offer the integrated trading and portfolio accounting support that a T+1 world will require.

"As it stands today, portfolio managers need to jockey between CRM and OMS, and the accounting system," he says. "So, every time there's an update in one, unless you're conscious of going in and changing the client's information in the other systems, they're not integrated, and you are open to discrepancies."

Andersen has yet to announce which CRM provider it will work with, but Honihan says that it would be a firm like a Siebel or Clarify.

At the core of Web eSTP is a middleware messaging layer that Andersen developed with STC, a global eBusiness integrator. The middleware solution will eventually tie together CRM, order management and trading, and then ultimately tie together back-office accounting and custodians.

Speaking about providers of order management and portfolio management systems, Honihan says that Web eSTP will eventually integrate with only a handful of vendor solutions.

"Once we have a half dozen clients on Web eSTP, when client number seven comes along and says they want to use Package X, we'll say that's not one of our half dozen available interfaces for trading. We can bring you online in a matter of weeks, as opposed to building out interfaces for that particular application," Honihan details. "We'll work with that application, if they want, but it could take months. You can imagine the client saying, 'I've been hoping to get rid of this solution for a while...,' and that will bring revenue across to our alliance partners."

Although Honihan believes many money managers will choose to outsource portfolio accounting to large custodian banks, he says the system will integrate either with the custodian or an in-house accounting solution. "As trades are made through a trade order management system, executed, cleared and settled in the account, that information will be pumped back through the messaging architecture so that CRM solution can reflect intraday, end of day, as frequently as they like the revised portfolio information," he adds.

Rather than travelling to clients on a monthly basis, the ASP model will allow money managers to work online collaboratively with their clients. Managers will be able to "push" clients graphs, statistics and other helpful information, as well as post "video clips" that can be archived and accessed by the appropriate clients at any given time. Honihan expects Andersen to announce the first client and the chosen CRM solution within the next 30 days.

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