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Proof of Concept (PoC) is a common process used in the investment industry to ensure the success of a system implementation; it is a crucial initial step. An effective Proof of Concept (PoC) allows you to evaluate a vendor’s capabilities and identify areas where custom solution design may be necessary.
A key aspect of a successful PoC is having a clearly defined scope. This entails identifying the various business scenarios, goals, and success criteria for competitiveness in the financial industry. Surprisingly, many firms overlook this element’s importance in favor of a cheaper and quicker alternative, leading to immediate success or failure.
By knowing the importance of a well-defined PoC, you can greatly enhance the chance of a successful system implementation and process change. Meradia is here to help you figure out what works for your firm. Read on.
INVESTMENT MANAGERS, ASSET OWNERS, AND MORE – WHAT TO LOOK OUT FOR WHEN PLANNING YOUR PoC
An effective Proof of Concept (PoC) plan ensures the important requirements to fringe scenarios are tested and conducted effectively. This can include understanding what new training is required and the new and existing system’s capabilities extending from the vendor to your firm’s team. The scope planning should include specific procedures defining the success criteria and providing proactive guidance. Is it necessary for the PoC to precisely match the current investment operations? Should the outputs of the PoC align with the existing systems? It’s crucial to ask yourself these questions to understand better what’s important as far your firm’s success.
These answers should be documented, and all stakeholders, including the vendor, should agree. The complexity and duration of the PoC will vary depending on how success is defined.
To start, you first need to determine the scope of the project. Once the scope is established, you should identify task scenarios and choose appropriate data sets that accurately represent the different aspects of investment operations. These scenarios should cover both critical and routine tasks.
The same time you would spend objectively evaluating vendor offerings should be spent evaluating an effective Proof of Concept. An effective Proof of Concept (PoC) should improve individuals’ daily tasks and responsibilities, as well as the processes and technology involved in investment operations. This includes importing data, maintaining data quality, performing daily activities, delivering and reporting information.
To ensure that critical functionality is properly evaluated, seek input from the dedicated research group responsible for these tasks. If the vendor’s responses to the request for proposal (RFP) are unclear or insufficient, create customized scenarios to specifically test these areas. By incorporating elements of daily operational efficiency, our proactive advice, investment operations, and specific functionality, you can accurately define the components that remain within the project’s scope.
To ensure effective testing, choosing suitable data sets that reflect the identified scenarios is necessary. Representative samples should be created if there are scenarios for which current data models are unavailable This is essential for making informed decisions about the vendor’s offering and ensuring a comprehensive evaluation.
Throughout the Proof of Concept (PoC) process, it is important to consider any limitations and collaborate with the vendor. The timeframe for executing the PoC should be established, taking into account contractual or resource restrictions that may impact the use of historical data.
Avoid overwhelming the team with excessive historical data, especially for a short PoC. It is important to maintain focus and concentration by setting a fixed duration. Communicate the scope to relevant stakeholders, including internal business units, vendors, investment consultants, and sponsors. Obtain consensus from all stakeholders before proceeding with the execution phase.
WHAT THE PATH TO SUCCESS SHOULD LOOK LIKE FOR YOUR FIRM (ASSET MANAGERS, ASSET OWNERS, WEALTH MANAGERS AND MORE)
Effective vendor collaboration is essential for a successful Proof of Concept (PoC). By continuously questioning and evaluating the vendor’s expertise and input, we can clearly define the system’s scope and align with client expectations.
Through this collaboration, we can confirm key elements, requirements, and deliverables, ensuring that the PoC is aligned with the desired outcomes.
Developing a comprehensive project plan, which includes milestones, task assignments, and dependencies, in collaboration with the vendor sets the stage for effective collaboration. Regular updates, Q&A sessions, and early data collection ensure the PoC remains within scope.
HOW MERADIA CAN HELP WITH INVESTMENT PERFORMANCE SERVICES’ PROOF OF CONCEPTS
For over 25 years, Meradia has worked with various financial services firms on implementation projects. We have seen what works and what does not regarding investment performance services, outsourcing investment operations, investment operations training, being an investment management consultant, and more on investment operations. Our expert consultants can review your firm’s implementation plan and ascertain if a PoC is the right choice for you. Additionally,
Meradia can properly scope and execute your transformation project, including a PoC. A major part of our process is to identify any potential issues or roadblocks by our experienced team of consultants while keeping our clients informed throughout. Our team averages 25 years experience in the industry, working for Investment Managers – OCIO, Multi-Family Office, Trust, Asset Managers, Sovereign Wealth, pension funds (which can include employee benefit plans), and more – offering insight, industry best practices, and more to help our clients achieve their investment operational goals through disciplined procedures.
HOW TO GET IN TOUCH WITH MERADIA
If your firm is looking for our investment performance services or help with front office, middle office or back office operations, contact us via our website, call us on 610-738-7787, or email us on info@meradia.com.