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One size doesn't fit all hedge funds

Wednesday 13 July 2011 - by Brian Roberti


Brian Roberti, director of sales & marketing at G2 Systems examines how to mitigate the risks faced by hedge fund managers when selecting a business-critical system.

The most effective way for hedge funds to mitigate selection risk when deciding on business-critical systems would be a miraculous ability to time-travel.

If only a fund could have the foresight to anticipate the future needs of the company and resultant gaps in tomorrow's software solutions.

How about being able to look forward to a time when the system will be truly entrenched within your business, having that 'aha' moment and realising the impact and pain of having to switch to a different platform or to prematurely upgrade the existing one to support business growth and new strategies.

Conversely, the ability to travel back in time to when you made a particular decision, to recognize exactly why you made that choice, and be able to defend it on the strength of a well-documented procurement process with buy-in from key stakeholders would prove invaluable for offensive and defensive reasons. Not a bad super-power to have as far as supernatural abilities go.

When hedge funds shop for business-critical systems, the first step in mitigating selection risk should be to conduct a thorough evaluation of requirements. This analysis typically breaks down into four key categories - namely functionality, operational efficiency, ability to integrate with third-party applications and counterparties, and ability to meet local reporting and regulatory obligations.


To help properly prepare for the system evaluation step, it is best to assume vendors all too often over-promise and under-deliver. In order to debunk their 'we do everything' myth, requirements are best framed within an evaluation matrix, specifying desired systems components weighted by priority, and then considered in respect to what is supplied 'out-of-the-box.'

It sounds simple, but ensuring that these prioritised requirements are sufficiently addressed, maintained, and adaptive is fundamentally important, and provides the necessary flexibility as business needs change. Follow-through is called for here - there's no point in framing this all out if there's no intention to stick with a disciplined due diligence process from beginning to decision to implementation to production.


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