Background:
Maitland’s approach to business evolution offers an instructive demonstration of the complex interplay of IT and business requirements – and insight into the impact of their alignment on sustainable growth.
Founded by a group of South African lawyers in Luxembourg in 1976 as a provider of cross-border legal and tax advisory services to corporate and wealthy private clients, Maitland has expanded over the years to include the delivery of fund administration services across the investment funds spectrum. Through a series of acquisitions – a Geneva-based fiduciary business in 1982; FinSource, a South African fund administrator in 2005; Admiral Administration, a North American specialist hedge fund administrator in 2012; and most recently, Phoenix Fund Services, a fund administration firm in the UK in 2015 – the firm has grown in terms of geographic reach and range of services, ultimately developing specialization in the delivery of seamless multi-jurisdictional legal, tax, fiduciary, investment and fund administration services to private, corporate and institutional clients. According to Maitland, fund services are now offered for a full range of investment funds, supporting transfer agency and asset administration sides of client businesses, including private equity and real estate, hedge fund and traditional institutional funds “on appropriate best-of-breed systems.”
Describing the firm’s founding ethos, Gareth Billimore, manager of the project office at Maitland, noted that the firm’s CEO Steven Georgala has been a strong proponent of growth through acquisition, though not at the expense of the firm’s core values. He pointed in particular to its “pioneering” spirit – to the firm’s ability to adapt in order to “be at the cutting edge for our clients.” Billimore’s definition of cutting edge eschews technological innovation for its own sake, though, to focus instead on “responding to client need that is leading edge” and on Maitland’s “own strategic vision for building a platform to support our clients’ product construction and innovation,” a technology foundation that will provide the basis for the rapid onboard of additional clients, acquisition targets and partners.
Defining the technology challenge
Billimore explained that the fund services side of the business is experiencing rapid growth, and with the addition of several key large clients, will serve as an important revenue generator for the firm. Administration outsourcing is a highly competitive industry, though, requiring the ongoing development of new efficiencies: “to stay competitive, we have to continuously try to rationalize our costs, and rationalize our platforms to ensure that as we acquire other business and systems, we do not acquire new revenue but lose on margins,” he added.
In many ways, Maitland’s challenge is one of information management: operating on a global basis to deliver back office fund administration on behalf of global fund managers, the firm receives data in multiple formats out of multiple customer systems. “How do we integrate the data seamlessly and quickly in order to provide fund managers with information that is as accurate and as real time as is possible so that they have better quality information on which to base decisions?” Billimore asked.
Maitland’s response to this question is illustrated in a project developed to support new directions taken by one of the firm’s clients, South Africa’s largest fund manager. A key piece of Maitland’s fund service platform is an order management system (OMS) that captures trades based on decisions made by portfolio managers. This hosted offering, designed to help boutique financial services firms in particular that may be disinclined to deploy costly discrete on premise systems, was built on NeoXam Manager (previously known as Decalog), a front and middle office solution for investment management activities which integrates with the firm’s Asset Arena InvestOne investment accounting and reporting system (a SunGard product).
A long time user of the NeoXam Manager (“NX Manager”) platform, Maitland’s client was determined to expand its mandate to cover international funds, and to attract new global clients, many of whom were not familiar with the NX Manager system. To support this initiative, the client felt it necessary to shift to the Bloomberg OMS; however, the Bloomberg data and system would have to integrate with Maitland’s InvestOne implementation. “The project was all about making that transition from NX Manager to Bloomberg,” Billimore explained, “and quickly” as Maitland’s client had made its own commitments to certain of its customers and markets to migrate to Bloomberg by specified dates – the new system had to be up and running as soon as possible.
The scale of the existing NX Manager deployment presented an additional challenge: “because of how entrenched NX Manager had become in our environment for the services delivered to our client, we couldn’t just rip and make a straight replacement,” Billimore added. NX Manager provided three key pieces of business functionality, which would have been compromised by a straight migration to Bloomberg, due to the tight coupling of NX Manager with the InvestOne system. Additionally, NX Manager was used by other Maitland clients, a factor that mitigated against the rip and replace approach.
Integration a quick solve for business need
To quickly address the client’s need to use the Bloomberg OMS while supporting existing systems, Maitland chose to implement Information Builders’ iWay integration software as an onramp to the firm’s environment. In a new data architecture designed for the client, data would flow from Bloomberg, be translated by iWay into formats that could be accepted into the NX Manager system, from which data would be forwarded to InvestOne, which in turn would return transaction reporting back to the Bloomberg system. By placing the iWay integration solution between its client’s Bloomberg system and NX Manager, Maitland was able to manage the unknown quantity in terms of data and formats that the Bloomberg information represented, and ensure completion of the upstream-downstream data traffic circuit in real time. With the existing system, Billimore noted, users of NX Manager order taking would receive InvestOne reporting in a large batch file at the start of each business day, but with the new integration, the portfolio manager would have a real time view of his/her cash, enabling the client to make decisions a couple of hours in advance of what was previously possible.
Maitland’s decision to deploy the iWay solution was reinforced by a long standing relationship with Information Builders; as Laurianne Stamer, senior business analyst, InfoBuild (Pty) Ltd., and former member of the Maitland integration team on the STP project explained, the firm had been using the iWay for straight-through-processing (STP), which meant that product skills were available within the organization. For Billimore, iWay provided “something that was easy to understand, something that is easy to change, and is well supported.” This at a price that Stamer claimed was cost competitive when compared to the offerings of many of the “integration heavy weights,” who also proved less inclined than IB to provide new or modification of product functionality, for smaller firms in particular. As example of IB’s responsiveness on the issue of customization needs, Stamer pointed to Maitland’s requirement for guaranteed data delivery – to the “need to tighten the integration coupling to ensure that delivery was always reliable” as “there are huge penalties if something goes wrong” in the financial services industry. In response to Maitland requests, the necessary changes were made to “the heart of the iWay product” by IB’s product division, she explained. This responsiveness extended to working relationships and consultation with individual IB personnel: “it felt like a single project team rather than a Maitland-vendor relationship,” in Billimore’s view.
Rapid ramp to deployment
Maitland first entertained its client’s request for Bloomberg integration at the end of 2012; began conceptual design of a solution in January of 2013; and in October of 2013 received the first data sets from the client – these formed the basis for thinking about iWay deployment. With the full time work of a dedicated team of eight, including BI, STP, integration, QA and business experts (and with input from IB, the client, and Bloomberg), Maitland completed the actual integration project in five months’ time – on time and on budget – with the first trade processed in June of 2013. Billimore credited much of the project’s success to the vision of the team, while Stamer attributed project speed (typical integration projects take two to three years) in large part to the iWay product, which she described as “light, and easily configurable” – a suite of tools that allow the user to select and link objects in a manner that is akin to orchestrating, as opposed to the rules based process in a traditional ESB or custom integrations.
According to Stamer, the key question was how to best use the iWay product: “we knew that the product was capable of doing the integration and that the speeds were fine for STP in real time. But we needed to understand how best to configure it, to solve all the integration problems and have as few points of failure as was possible, and make it as robust for future clients as was possible.” Due to time constraints, the team did not resolve all future issues (though it did document them for further redevelopment), but tackled the project using an Agile methodology that enabled continuous development progress to fulfillment of key requirements. In some cases, Billimore noted, documentation was iterative, carried out after the fact; however, the right levels of governance were applied to protect the project delivery date and testing was very robust.
Balancing strategic and tactical goals – the technical roadmap
A key strategic objective for Maitland is to provide clients with the flexibility needed to plug and play their preferred technology into its InvestOne environment, whether this be NX Manager, Bloomberg, or some other order management system. To support this roadmap, Maitland has set up a parallel work stream initiative in which one aspect is the decoupling of NX Manager and another is the creation over the next decade of a software agnostic platform. “We are developing a roadmap for this complex process, which will involve the integration of clients using differing order management systems,” Billimore explained. But though the team is looking ultimately to circumvent more “piece meal integration,” transition timing will depend more on the business case than on technical challenges. Maitland needs to strike a delicate balance between technical and business benefits, and the needs of various clients. Stamer added: “the firm may find value in supporting various OMS, but it needs to grow a lot more areas than just Bloomberg – there are other clients, and other clients might use Bloomberg differently. So it’s almost more important to create a plug in point that does the same for all of it.”
Counting the implementation blessings
One measure of project benefits is client satisfaction; Maitland’s client achieved what it was looking for – the ability to use Bloomberg in day-to-day operations to service global clients. By enabling the fund manager’s more global reach, the project helped Maitland to establish better relations with a key client, while creating a toehold on the firm’s longer term strategic platform vision. “It was step one of three, as it gave us the pre-tactical solution where we discovered we can do this and iWay is the product of choice,” Billimore explained. Using lessons learned during the project, Maitland is now embarked on “step one A” – another integration for another order management system for another client. While the end goal is deployment of a seamless platform that will obviate the need for multiple bespoke versions of iWay for different order management systems that each integrate differently with the Maitland platform, “step three” is part of an ongoing process that must align with business opportunity. “It will take a long time, and it’s very complex. When that is contrasted with bringing the client home,” Billimore noted, “the choice is clear.” “It sounds like an integration issue,” Stamer noted, “but it’s much more. It’s a people and process issue that has to take into account the fact that the people and the company are built a certain way.”
