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J.C. Louis
J.C. Louis
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Vendors Push Across-the-Board Integration

Today's high-end portfolio management systems hook into analytic packages as part of a best-of-breed approach involving data warehousing. To woo users away from standalone packages, the analytics usually interface with a vendor's accounting, trade order management, compliance and performance measurement functions.

SunGard, for instance, maintains 190 benchmarks that users can combine to perform analytics and measure performance. "You feed the pricing or index data to the front-end analytic piece, and then take it, along with the trades and executions, to the back-end performance piece," says Cytron at SunGard. Thomson's PERAScope contributes performance attribution that weighs security selection vs. the benchmark to determine how much of performance is due to timing, currency component and other factors. GIM II supports analytics with respect to hypothetical models online. Actual accounts may be compared to or balanced against these models prior to trade. GIM II posts performance for model and actual accounts down to the security level. Analytics can then be calculated or extracted from the database's Performance Master Tables for use in standard and custom reporting.

Some systems, however, do not provide analytic comparisons, particularly when their application is a module of an existing accounting solution. At the same time, observes Lisa Mancini, director of marketing at Financial Models Company, "The import of fundamental analytics may be cumbersome for many vendors and not allow them to use multiple third-party sources for data comparisons." FCM's Pivot, a new analytics module due to be released in March, allows users to import data from a wide variety of analytics providers to do sophisticated what-if analysis on portfolios, models or indices. Combining data for comparison and reporting is also a selling point for SS&C's Camra 2000.


"Most of the systems have upgraded their technology with a GUI (Graphical User Interface) or a browser-based front-end for readier access to multiple data sources," says Mark Bobseine, president of Cutter Associates, a consultancy specializing in investment management and trading technology. Interfaces with third-party analytic services involve many factors, such as imports to a data warehouse, explains ITS's Fitzgerald. "Others require data to be passed from the back-office systems with a data return from the analytical service. Still others can run as a runtime engine incorporated into another product," he says.

Some services access the Internet, observes Fitzgerald, "but more as a data medium for client reporting." Internet access to analytical systems can be an integrated feature. For example, he explains, ITS's Query2 which runs on a PC desktop, uses a data warehouse (via a server). Data from analytical providers can be incorporated into the warehouse and other products can be linked in by the Internet.

single solution?

Although the so-called best-of-breed solution seems to be a popular trend, do users still wish for the architectural elegance and simplicity of a single integrated solution?

"Users would like a unified analytics and accounting system," says Stephane Dubois, vice-president of product marketing at San Francisco-based Advent Systems, "but many have higher priorities. Each user tends to develop unique requirements from an analytic package," which is an art, Dubois notes. "Whereas, portfolio management is much more standard across users, more similar to a science," he adds.

The prospect of users seeking - or vendors becoming - a single enterprise solution for portfolio management systems is becoming less of a concern as markets grow more complex. But do users still hanker for one all-encompassing super provider?

"Eighteen months ago, I would have said 'yes,'" says SunGard's Cytron. "While this would be ideal," observes James C. Houghton, senior vice president, product management at Princeton Financial, "our large investment clients look for as much coverage from one vendor as they can get to integrate with other parts of their systems environment."

Among the vendors surveyed here, only one - Los Angeles-based IDS's Global Investment Manager II - has positioned itself as a single solution provider. Menna Lloyd White, IDS's manager of marketing operations, sees a significant enterprise market for its GIM II system. White contends that "companies tend to prefer a single system solution, as it simplifies the process of integration and data warehousing and enables reconciliation to take place electronically. When a system is not a single system solution, then seamless integration becomes the next architectural goal."

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