7 Steps to a Successful Cloud Migration

February 21, 2024
Read Time: 7 minutes
Unified Data

Embracing technology broadens opportunities for the future

Investment firms that successfully undergo digital transformation can strategically position themselves to support new investment products, meet rising customer demands, and deliver exceptional customer experience.

Moving to a cloud-based system — one that provides data management, analytics, and reporting — will deliver benefits of scale, reduce costs, optimize efficiency, and maximize opportunities in a diverse global market.

Firms that accelerate their data modernization efforts will be better situated to effectively meet their technology needs, now and into the future. To enhance efficiency and support growth, investment firms will benefit from embracing a mindset focused on technology that offers greater possibilities for advancement.

Enhance insights and decision-making

Generating and acquiring more data creates new challenges and opportunities.

Sophisticated data management capabilities paired with cloud-native, unified infrastructure drives cost savings, enhanced data management, and better performance through operational efficiency. A comprehensive strategy also reduces the chance of errors, lowers operational and execution risk, and protects against the pitfalls of reputational risk.

An operational infrastructure that works best for your firm requires many complex decisions. A proper match of technology to goals will ensure your tech stack meets your firm’s requirements and addresses your comfort level for risk as business grows. It will also unlock the full potential that accurate and real-time data can offer.

Build a detailed migration plan

The adoption of cloud-based technology marks an inflection point for the industry. As investment management firms of all sizes adapt to the digital world, we’ve identified 7 steps to help migrate your systems:

  • 1.Outline a sequence of migration activities, timelines, resource allocation, and risks
  • 2.Prioritize applications for migration based on urgency, complexity, and business impact
  • 3.Migrate applications in a phased approach, starting with low-risk systems
  • 4.Remain aligned on scope during the process and create procedures to address changes
  • 5.Manage the unexpected by staying agile and create a plan to manage unanticipated events
  • 6.Build confidence and facilitate smooth resolutions by encouraging a positive relationship with your vendor
  • 7.Build a data migration strategy to minimize data loss, avoid formatting problems, and address data quality issues

Step 1: Outline a sequence of migration activities

Investment firms can enable a smooth integration and strong connectivity by developing a comprehensive migration plan. Planning ahead, open and direct communication, robust testing, and continuous monitoring are key to achieving successful integration outcomes.

Once you settle on a migration approach, collaborating with a cloud data platform partner will allow your firm to design a separate yet parallel data migration strategy that works in harmony with your legacy systems migration strategy. A healthy migration strategy will include a detailed outline of the approach, tools, and processes to successfully transfer data.

Step 2: Prioritize applications to cover execution essentials

A strong and detailed project plan and strict project governance will help ensure effective execution. Defined scope, with objectives and deliverables, helps project teams stay focused and aligned, and also serves to track progress, identify dependencies, and manage resources.

Step 3: Migrate applications in a phased implementation approach

A phased approach can enhance efficiency and help achieve long-term sustainability through tailored solutions:

  • Phase I: Initiate
    After your transition from signed contracts to migration planning, your partner will set up a dedicated environment in the cloud and develop an understanding of your firm’s specific needs. Deep-dive sessions will help your partner understand your data sources, create an inventory of your systems, and identify critical use cases to optimize.
  • Phase 2: Integrate and configure
    With an environment in place, your partner will establish data connectivity and build strategies to address the specific requirements needed to accurately capture and map your firm’s data. Your partner will also create configurations for outbound data. At this stage, data quality rules must be strictly followed to ensure only clean, accurate, and validated data is stored.
  • Phase 3: Data load and run parallel testing. After your partner has established data connectivity, data will flow from your firm’s designated sources and is transformed and captured within the data platform. Once an adequate set of data is available in the new cloud-based environment, training and testing begin prior to go-live.

Infographic of Sample Implementation Approach

Step 4: Remain aligned to manage scope creep

Teams often struggle to accommodate unexpected changes. It is important to control unreasonable revisions to project scope to stay on track with allocated budgets, minimize delays, and ensure overall quality of deliverables is not compromised.

Step 5: Manage the unexpected by building a clear roadmap

A detailed strategy and clear roadmap outlining the project’s steps, tasks, and timelines will keep the project focused and aligned. At this stage, it’s useful to conduct an honest and comprehensive assessment of your existing investment operations infrastructure and identify legacy systems and applications suitable for migration to the cloud.

As more investment firms move through the migration process to maximize the benefits of cloud-based systems, it’s not unusual to hear of problems that lead to failed implementations such as prolonged migrations and runaway costs. Staying focused on clear goals and best practices are key to avoiding pitfalls.

Step 6: Build confidence by partnering with an experienced vendor

Partnering with an experienced vendor that brings the breadth of knowledge and experience to work with varied and complex file formats will alleviate many of the problems associated with managing data.

Aligning project team members on milestones and end-goals is crucial to a smooth transition. Maintaining open communication during the transition from the vendor’s project teams to your firm’s ongoing relationship management teams will further build confidence and certainty in the overall success of the project.

Training empowers the team. The importance of training cannot be overstated, as rigorous training will empower your teams to use the platform’s interface and understand the workflows vital to their specific roles.

Step 7: Build a data migration strategy to minimize data loss, avoid formatting problems, and address data quality issues

The sheer number of differences in how data is curated and formatted can present multiple challenges. Make sure your data platform provider has the expertise to handle complex data structuring and can build a data migration strategy that minimizes data loss, as well as formatting and quality issues.

Once your firm has implemented a phased approach in coordination with migration partner, moving from the parallel phase into the production phase should be seamless. In the parallel phase, your partner will run the new system, applications, and processes in a business-as-usual manner. In this phase, they will also address issues that arise before your firm goes live on the new system.

To ensure a successful go-live, it’s a good idea to establish what success means. In partnership with your vendor, create a success criteria list that covers business-as-usual activities such as confirming trade files are received, trades are booked, or that end-of-day P&L is complete and signed off on.

Lean on a simple go-live checklist

  • Outline a migration sequence, timelines, resource allocation, and potential risks
  • Prioritize applications based on critical need, complexity, and potential business impact
  • Think about a phased approach, starting with low-risk and non-critical systems
  • Remain aligned on scope and develop procedures for unforeseen changes
  • Manage risk by maintaining a flexible approach to unforeseen issues
  • Foster positive relationships with your vendors to ensure smooth resolutions
  • Build a data migration strategy to avoid data loss, formatting challenges, and data quality issues

Client spotlight

The challenge
An investment firm with $10 billion AUM sought a solution to integrating disparate systems, including areas such as order management, accounting systems, and cash management. The client also wanted to integrate and migrate third-party data to a cloud-based system.

The end goal
Arcesium worked with the client to migrate the firm’s multiple legacy service providers onto one, cloud-based platform and also integrate data sources and feeds that would support the firm’s complex requirements.

The result
Arcesium succeeded in helping the client simplify how they manage trades, positions, and securities through a unified platform that enriches data across accounts.

Client outcome

4 Systems Migrated, 28 Data Sources Integrated, 100k New trades & Cash Activity, 2m+ loands modelled and processed

Position your firm for the future

The technology landscape and tools the industry uses are undergoing rapid change as requirements for managing and using data become even more complex. Investment firms will need to prepare by ensuring their data management systems are optimized for full productivity. In addition, they’ll need to learn new tools and think about new systems that have better data proficiency.

Sophisticated platforms can handle complex financial models and provide real-time risk calculations, helping investment managers assess and manage risk exposures more effectively.

Investment firms that successfully undergo digital transformation are better positioned to support new investment products, meet rising customer demands, and deliver scalable, superior customer experiences. The ability to harness more data, from more sources, in less time — and empowering users to collaborate and analyze data in different ways — leads to increased operational efficiencies, better decision-making, improved innovation, and world-class customer interactions.

For more details on planning a successful migration read Arcesium’s Best Practice Guide: Migration to Modern Technology Platforms.

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Bhargava Borahalli Vice President of Project Management

Bhargava is Vice President of Project Management at Arcesium. He describes his role as project manager focused on implementing solutions for large, and complex enterprise clients. Bhargava has more than a decade of experience in the investment management and FinTech industries.

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