Unleashing the power of today's portfolio management solutions
Published: September 13, 2005
Today's financial services market is experiencing rapid change. With the rise of electronic trading, markets are moving faster and asset managers must continually adapt to stay ahead. Meanwhile, competition is fierce as firms seek a greater share of the customer wallet by adding more services.
However, today's portfolio management solutions are not up–to-speed with today's market. Most asset managers use a solution that focuses on either order management or portfolio accounting. Neither solution meets the complete needs of today's market. And there is no seamless flow of information among the various applications to ease portfolio decision making.
As a result, application integration has become critical. As Kenny McBride, Microsoft managing director for capital markets, says, "No longer can these applications sit independently. It dilutes their value proposition if they do. To unlock the data contained within these portfolio management solutions and realize their true value, they need to be integrated."
And Microsoft technology can be the glue that enables this integration.
 | To unlock the data contained within these portfolio management solutions and realize their true value, they need to be integrated. |  | | Kenny McBride
Microsoft Managing Director for Capital Markets
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The need for integration in portfolio management software
Asset managers use portfolio management solutions to invest a fund's assets, implement its investment strategy, and manage day-to-day trading. In particular, portfolio management solutions have made it easy for managers to rebalance many cloned portfolios at one time, enabling them to then move to compliance pre-trade.
But none of the portfolio management packages available today provide a complete solution: One that provides an intraday, position-keeping system that supports all asset classes and integrates any known position and risk exposure. Each package provides some of these features, but not all. That's why the race for integration is on.
The good news: More and more portfolio management solution providers are partnering with Microsoft to provide integrated solutions. Using the Microsoft .NET Framework to create their applications, these providers are delivering the next generation of portfolio management solutions. Solutions that offer seamless interoperability, helping to unlock the potential of large amounts of data.
Microsoft partner solution providers include many of the most respected companies in portfolio management, including Thomson, Advent, Indata, FMC, Linedata Services, LatentZero, and SunGard. This list alone testifies to the power of Microsoft .NET.
It's all in the desktop: Maximizing the value of portfolio data
The problem with today's unintegrated portfolio management solutions is that they create islands of data. By connecting these applications using Microsoft .NET, financial services firms can make the data available to all workers. This connected data can then be used to identify opportunities in the marketplace and create additional value.
Fortunately, the tools to mine the data for greater advantage are already in the hands of asset managers. That's because most asset managers already use Microsoft Office Excel spreadsheet software and other programs in the Microsoft Office System. These applications are XML-enabled so asset managers and other workers can access and manipulate data directly from their desktops, using the productivity software they use every day.
"By making portfolio data available to workers through [Microsoft] Office and other technologies such as [Microsoft] SharePoint and [Microsoft] Exchange, it becomes easier to share that data with colleagues and create a streamlined business workflow process," says McBride. "Firms find that collaboration improves, and with it, productivity. It gives asset managers the tools and information they need to work more efficiently and make better investment decisions for their clients."
Asset managers also use Microsoft SQL Server Reporting Services to access data from disparate sources and identify key data. They then use analytical tools to improve insight into financial exposures and risks and spot opportunities for profit enhancement. As McBride reveals, "Hedge fund managers, in particular, have used Microsoft tools like these to identify and exploit opportunities and manage them in real time."
Optimizing business processes, speeding return on investment
Like any business, financial services firms are hampered by inefficiencies in their business processes. For instance, because applications are not integrated, transaction data is often rekeyed from one system into another. This wastes time and creates the opportunity for errors.
With the Microsoft .NET Framework, business process inefficiencies such as this can be addressed one technology at a time. Applications built on Microsoft .NET integrate easily into existing environments and are designed to generate additional value from current technology investments. Financial services firms can replace infrastructure components and software incrementally to help build a competitive advantage.
"With Microsoft technology, investment firms can address the critical needs they have right now," explains McBride. "Upgrading on a component basis, the ROI will be quicker. And the money they save and the profits they realize can be reinvested to fund other changes in their portfolio management architecture over time."
Meeting demands of asset managers today and in the future
Integrated portfolio management solutions can meet both the compliance and risk management needs of today's asset managers. Using Microsoft .NET Framework and Web services, leading Microsoft partners are creating these solutions today.
Coupled with other tools and technologies from Microsoft, asset managers can monitor customer exposures and asset allocations immediately. The result: They can help to ensure the best returns relative to the benchmarks.
"Microsoft and our partners are delivering portfolio management solutions to meet the demands of capital markets today and as they evolve," says McBride. "Together, we can help firms improve productivity and achieve operational efficiencies in this highly competitive market."
