For years, the role of the chief information officer (CIO) has been to acquire and maintain cost-effective IT services for the organization. Technology was viewed as a basic necessity, so managing costs and ensuring systems were running smoothly were the primary areas of focus for corporate IT leaders.
Today, technology is much more than a commodity. In fact, for many investment management firms, it has evolved into a source of competitive advantage. This change, combined with stagnant IT budgets, has caused the role of the CIO to move away from basic IT management to become more of a forward-thinking innovator for the organization. Here are a few strategies to help ease this transition.
As your firm considers whether a cloud-based infrastructure or on-premise environment is best suited to meet your business needs, another interesting alternative to consider is colocation.
Colocation allows firms to house their computing, network, storage and IT equipment in a fully managed facility. This allows the organization to maintain ownership over the infrastructure while feeling confident that it is highly secure, redundant and monitored around-the-clock by experienced professionals.
If you determine that colocation is a viable option for your firm, you’re next step will be to select a provider and facility. Depending on your geographic location, there may be several options to choose from.
To help you get started with this process, we’ve developed an infographic outlining the key criteria to use when evaluating potential colocation facilities and services.
We spend a lot of time here on Hedge IT making suggestions about what hedge funds and investment firms should do when it comes to their technology. But today, we’re not going to tell you what you should do. In fact, these are things we definitely DON’T want you to do!
Plan your infrastructure only for the short-term.
A crucial mistake often made by funds is not planning for the future. Even at launch, you should be thinking about what your firm will look like and what technology you will require down the road. Planning out two to three years in advance is recommended in order to reap the most benefits when it comes to your infrastructure. Plus, if you don’t plan ahead, you may wind up incurring more costs if technology decisions need to be made unexpectedly.
Ignore the importance of a business continuity plan.
It has become commonplace for hedge funds to employ disaster recovery strategies to protect mission-critical data and applications (due to a number of reasons including investor expectations, new regulations and the effect of unexpected natural disasters, e.g. Hurricane Sandy). But firms often overlook the equally important business continuity plan, which provides guidelines for what employees need to do in the event of a disaster. Yes, focusing on your infrastructure is essential to keeping your business afloat, but that business also cannot survive without its employees. Don’t forget to test that BCP plan once you’ve developed it – a good plan will only work if people know how to follow it.
Big changes are coming in the form of European Union data protection mandates. In January 2012, the European Commission announced a proposal to reform the current European Union's data protection framework, currently known as the 1995 EU Data Protection Directive, to better protect the personal data of EU citizens and update the current legislation to fit in with the 21st century requirements and rapid evolution of technology (including the prevalence of social networking and smartphones).
The EU proposal will give individuals more control over their data while also serving to promote the importance of data protection in a globalised world. The European Commission expects the rules will go into effect two years after they have been adopted by the member countries - officially around 2014 or 2015.
While some of the current proposals will undoubtedly be amended over the course of this lengthy process, let’s look at some of the practical steps companies should be considering now.
To quote PC World, “A high-end SSD is the pinnacle of computer storage today. Ditching your hard drive for one of the latest SSD models is like dumping your go-kart and hopping into a Formula One car.”
But what is SSD?
SSD is a storage device that stores persistent data on solid-state flash memory, using integrated circuit assemblies as memory. SSD has no moving parts, which is one of many distinctions between SSD and traditional hard drives that have spinning disks.
SSD offers huge performance gains over other commonly used storage drives including SAS (serial attached SCSI) drives. For perspective, the typical enterprise spinning disk is a 15K SAS drive, which offers approximately 200 IOPS. Mainstream enterprise SSD on the other hand can offer 10,000-100,000 IOPS.
Why should I care?
Investment management firms are presented with an increasing amount of data, much of which holds the potential to uncover new investment opportunities. For some strategies (think high frequency trading and algo), the speed at which the data is processed is linked to the size of competitive gain.
Storage area network (SAN) management. It might not be the hottest topic on the tech blogs these days, but effective management of your firm’s storage infrastructure is essential to running an efficient and profitable investment company. And lately, managing storage infrastructures has become increasingly complex and time consuming.
So, why is effective SAN management important for your firm?
If your storage infrastructure doesn’t function at peak speed and performance, your team’s productivity levels will be limited. Effective SAN management involves ensuring that your environment is monitored on a 24x7x365 basis so that optimum performance is constantly maintained. This helps you detect potential issues before they arise, preventing costly downtime. Additionally, as your firm’s needs evolve over time, you’ll want to be sure that your storage capabilities adapt to meet these requirements. Failing to effectively manage your SAN environment could result in under-utilization of the storage capabilities you have procured, or the firm’s needs growing at a faster rate than the storage space you have available. Both of these scenarios are highly inefficient and can be damaging to your bottom line.
How can you ensure your firm is managing its SAN environment as efficiently as possible?
We hosted a webinar earlier this week, App Hosting 101: Managing Your Essential Applications in the Cloud, in which Steve Schoener, Eze Castle Integration’s Vice President of Client Technology, and Martin Sreba, Senior Director at Advent Software, discussed topics such as industry trends in application hosting, key drivers of application solutions, common myths about the cloud, and the right time to put an application into effect. Continue reading for an overview of the webinar.
Industry Update: What’s Going On?
Increasing demands from hedge funds’ current and target investors are driving a variety of trends. Due diligence requirements are more advanced, as investors expect to see candid looks into a fund’s systems, disaster recovery capabilities and more. The increasing complexity of investments is also driving the need for more complex systems to handle these instruments.
Firms are starting smaller in today’s environment, with many starting with under $100mm in assets under management. Startup funds are looking for technology solutions to complement their size and give them the tools to efficiently run their businesses.
We were recently asked by a COOConnect member about the best sources for information about the strengths/weaknesses of the various hedge fund applications including front, middle and back office. Since we know many folks have this same question, today we are going to expand on the answer given by our expert, Mark Coriaty.
Now the way a hedge fund uses an application will vary based on its investment strategy, and therefore the perceived strengths and weaknesses may vary as well. However, there are multiple ways to establish a baseline of strengths and weaknesses.
Service Provider Reports: Balancing Bias with Value
First up are free reports from hedge fund service providers such as Eze Castle Integration. Each year we publish a benchmark study that outlines top applications used in select front, middle and back office categories by hedge funds. This report will provide a baseline of the top three application vendors used in each category, but doesn’t dive into specific feature sets. The report can be downloaded HERE.
Vendor reports can be helpful in getting an initial understanding of the most frequently used applications and top features used by firms. You should always consider the source, as some vendor reports or whitepapers will be biased.
With mounting regulations, stringent reporting requirements and heightened investor expectations, we know that managers who are considering starting a hedge fund have a lot to think about. So, we joined forces with KPMG to host a jam-packed half-day seminar and networking event yesterday in New York City: Hedge Fund Launch 2.0: Navigating the New Environment.
During the event, we had the pleasure of bringing together over 100 investment management professionals for an exciting and educational day. Attendees heard from over 30 notable industry experts engaging in panel discussions on an array of topics related to launching a hedge fund.
Here’s a look at some of the insights and lessons learned from a few of our favorite panel discussions.
Tomorrow, we are co-hosting an exciting seminar in New York City with our friends at KPMG on the topic of launching a hedge fund. The half-day event, Hedge Fund Launch 2.0: Navigating the New Environment, will feature expert panel sessions on variety of topics including technology, regulations, capital raising, application platforms and more.
One panel we’re particularly interested in – beyond the technology panels, of course – is Corporate Essentials, a program focused on the often forgotten-about aspects of launching a new business. These aspects include human resources, compensation, insurance and real estate. Here’s a sneak peek at some of the content our panelists will be discussing at tomorrow’s event:
- The Who, What, When and Where of the Bad, Bad Cryptolocker Ransomware
- Expert Tips for Launching a Hedge Fund in a New Environment
- Answering the FCA's Dear CEO Letter on Outsourcing with Some Practical Steps
- Reflecting on What We're Thankful For This Thanksgiving
- Finding Your One-Stop Shop: The Benefits of Choosing an All-Inclusive IT Provider
- business continuity planning
- cloud computing
- data loss prevention
- disaster recovery
- eze castle milestones
- hedge fund due diligence
- hedge fund marketing
- hedge fund operations
- hedge fund regulation
- help desk
- high frequency trading
- launching a hedge fund
- privacy compliance
- project management
- real estate
- startup & relocation
- trends we're seeing
- videos and infographics