There are many reasons why organizations migrate from their existing trading systems. Listed below is a broad classification:
From being terminal-based machines to sophisticated software packages with full spectrum of functionality and coverage, trading systems have evolved rapidly over the past two decades. There are several trading systems in the market today, delivered by a wide array of vendors – some delivering specific/ niche/ mono asset classes to complete set of asset classes(including cross-asset classes/structured products).
Let me explain the five important steps that organizations have to follow for trading system migration.
Step 1 – Audit of existing application landscape
Once organizations decide to migrate from their existing trading systems, they have to go through the process of understanding the current landscape of products/ systems available in the market.
They have to score each of the available products on a variety of parameters like:
|Feature/Functionality||Vendor 1||Vendor 2||Vendor 3|
|Pricing – Vanilla||√||√||√|
Step 2 – Selection of trading solution package
Once an organization decides to migrate its trading systems to a new platform, there are two possibilities which can emerge:
Organizations typically face a whole gamut of challenges with trading system migration, mainly due to the complexity of these systems which is further complicated with any in-house customization.
These challenges more often translate into major delays during implementation and in turn result in schedule and cost variance.
Another factor which may alter the duration of the project is assumptions/dependencies which might have not been looked into in detail during the course of the project.
A typical example could be the assumption that the same hardware from the existing project would be used for the new implementation as well.
It is vital to validate these assumptions/dependencies periodically so as to avoid unforeseen impacts on project delivery.
As with any new system implementation, even with trading system migrations, we need to take into account the impact to upstream and downstream interfaces/ sub-systems.
A typical trading system
We will look at the next steps of trade systems migration in my subsequent blog.