Over the past week I spent a little time converting to an iMac from an old Windows XP device. OK, maybe it was more than a little time with the merits of an Apple vs. Windows device a conversation for another blog (but I am happy about the switch!). However, while moving over my music library I ran across a concert I hadn’t heard in a while and I fired up a tune…”Let Us Get Together” performed by Hot Tuna. That title got me thinking about collaboration.

Some might be moving faster than others in adopting social, mobile and collaboration technologies as a core component of their business model and infrastructures. And I would suggest that non-adopters (non-believers?) or those lagging behind are and will be at a significant competitive disadvantage.

But are we talking collaboration or are we talking social? Are these the same, different? Do I need either, both, none? Sort of like the old days where everything had an “e” associated with it, it seems like “social” is now being applied to just about everything. But being social is just one form of collaboration.

So where does collaboration come into the mix? Well, Wikipedia describes collaboration as working with each other to perform a task(s); a recursive process where two or more people or organizations work together to realize shared goals; by sharing knowledge, learning and building consensus.

How we create and share information is moving well beyond traditional structured content and our typical business documents. This new collaborative approach is people and relationship centric. When dealing with the resulting unstructured conversational content, the data created via these collaboration activities becomes valuable in the context of providing a deeper understanding of the business, internally and externally, from day-to-day activities to impact on the brand.

It’s about opening up communication and engagement to everyone in the organization, across all departments, empowering them to bring in new ideas and perspectives and creating a searchable knowledgebase that everyone in the organization can benefit from.

New approaches and types of solutions are evolving and the current solution providers across the board recognize the need to adapt their solutions, integrating the usability features and functionality found in today’s consumer-focused social collaboration tools with the core components of their own product and service offering.

Here are some functional requirements and assessment criteria to think about:
• How well does the solution leverage social concepts, enabling communication and collaboration, capturing knowledge and conversational content?
• Is there support for ad-hoc communications and interaction providing teams and individuals with the capability to easily share knowledge and initiate a real-time conversation for input and feedback both inside and outside the organization?
• Does the solution provide the content management services that collect, store, and manage the content that is the result of or important to the team’s activity?
• Does the solution meet the compliance requirements for content generation, monitoring, review and archiving?
• Is there multi-device support and the ability to “collaborate anywhere” (e.g., browser-based, mobile, tablets, etc.)?

Throughout all of this, we’re still faced with many of the same challenges we’ve seen before and will continue to be faced with every day:
• A business environment of rapid change that necessitates equally rapid responsiveness.
• The need to prioritize and select the right initiatives given economic pressures and increased competition.
• The need for improved risk and performance analysis, but in much shorter cycles.
• I would also add a couple more: developing the organization’s talent and its ability to execute well on its initiatives and every day operations in this same challenging and changing marketplace.

So, at the end of the day, does collaboration help us with these challenges? I can think of a few positive outcomes in helping us to…better knowledge sharing, innovation and business differentiation from broader and deeper interactions, more intimate and productive relationships with partners, clients and more knowledgeable and effective teams across the organization as a whole.

Seems like something worth considering.

Now where did I put that Iron Butterfly compendium?

-Larry Paley

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I really admire the work of the late Steve Jobs. Why? First, Mr. Jobs understood that technology exists to serve its users. As we easily integrate the newest tech devices into our lives, it’s hard to appreciate how far they have come from first-generation devices. For example, HP and Palm both developed early devices that could synchronize contacts, calendars and notes. I had both and tried my best to build them into my daily routines. But they never became tools I could easily, intuitively adopt. I told myself (and others): “These devices need to have music, a phone and integrate with other software to truly be useful.” Mr. Jobs was the person who listened to consumers, and envisioned even more than they asked for. As a result, the iPhone changed how people use personal digital assistants, and in the process changed our culture.

Mr. Jobs did not make technology for its own sake. He and his team at Apple studied consumer usage patterns, including the frustrating experiences of early-device users like me. They paid attention to the ways device owners wanted to purchase and listed to music, and how mobile phone users walked and talked. The result was a device that, at least in my life, became the single most valuable tool I use. Instead of creating more silo technologies, Apple integrated solutions to several key day-to-day needs into one easy-to-use device that became a game-changer. To me and my team, the key point is that Apple took the time to understand the workflows of its customers. What resulted wasn’t just a device that was unprecedented in tech history but also a concept: The iPhone worked how the user wanted to use it, not how some engineer thought it should. It worked simply for the consumer.

What does this line of thinking mean to broker-dealers? The broker-dealer marketplace loves technology because it solves many challenging problems the securities industry faces. Or, does it?
Today, Business Process Management (BPM) is a hot concept within the broker-dealer marketplace. However, it is also a misunderstood term because successful implementation of BPM requires a firm to go well beyond technology. As powerful as it can be, this technology does not solve problems by itself, and it especially does not drive adoption. Understanding this basic fact can save months of time and millions of dollars in development costs.
Over the years, we have seen broker-dealers make huge tech investments and not reap the rewards that they should. Why? The biggest single reason is a failure to understand what their users really want and need. To remedy this problem, the first step usually is not to rush into new purchases or development projects but rather to step back and observe how users (especially financial professionals and investors) already are using the tech tools they have.

Technology is just a tool. Left to its own devices, technology will become more and more complex, with fewer and fewer adopters. When evaluating technology, start by looking at the audience that will be using it. Slow down, take the time, and ask the key question: How are users managing these tasks today? How do they want to improve on tried-and-true ways? To borrow a Steven Covey phase, “Design with the end in mind.”
I would expand that to say: “Design for tomorrow – all with potential end-users and all of their adoption needs in mind.”

If you have more questions on this line of thinking, give me a call or send an email, so we can further define our rationale.

Chip Kispert | Managing Partner | Beacon Strategies, LLC | 720 259 3865

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Happy Valentine’s Day from 35,000 feet!

Recently, I told a client that my time for deep thinking now seem to be limited to when I’m sitting in my favorite place in the sky, Seat 9a. Even then, I only seem to have this luxury when a client deadline is not pressing. So, hopefully this month’s blog entry is coming to you with what strategic planners call “a stratospheric view.”

Reflecting on the first 45 days of 2013, three ideas spring to mind:

1. The pace of IT implementations this year has been fast and furious. Approved funding and pent-up demand are moving decisions forward.

2. Business Process Management is evolving as a key driver of technology decisions, and this is as it should be.

3. Broker-dealers are rethinking their tech commitments in light of changing priorities and business models. They are moving away from being “tech shops” and toward the idea of integrating IT to accentuate core strengths and key differentiators.

What evidence supports these ideas? First, the frenzied pace of business has kept our team in airplanes almost constantly through the first six weeks of 2013. Secondly, our broker-dealer clients are thirsting for advice and guidance on business model alignment, strategic roadmaps, vendor analysis, decision trees, and execution assistance. The demand for high-level research/consulting services indicate that clients are thinking longer-term and making decisions among a broader set of options.

Thirdly, our clients are transitioning from legacy or quasi-legacy systems to more contemporary platforms, through which strategic partnerships are supplying high-quality functionality and real integration with other best-of-breed solutions providers.

To us, these factors indicate that the broker-dealer marketplace has entered a more dynamic era for tech transitions. The idea that “technology feeds and serves itself” no longer meets the needs of broker-dealers or their balance sheets. Rapidly, we see it being replaced by the concept that business process management, implemented with the right mix of technologies and partners, is a key to efficiency, scalability, capital conservation and customer service.

Why Business Process Management Is Hot

For years, broker-dealers and financial professionals have been buying technology basically the same way they buy iPads or PCs off the shelf at Best Buy. Over time, many have grown frustrated by learning that this process does not optimize their finite resources and budgets. Specifically, technology-buying does not solve the problems of integrating skilled labor with data flows. On its own, it does not, help to organize and archive data to meet rising demands of customers and regulators.

Business Process Management, correctly managed and implemented, provides a platform for maximizing IT investment. As this idea has gained traction across the industry, our Beacon Team has refocused its efforts to drive the concept of Business Process Management first, and technology second. The power of this thinking aligns with where leading financial firms are taking technology – to the relationship level.

Last night, I had a conversation with a colleague who works as an executive for a large broker-dealer, and we quickly moved into a “buy versus rent” discussion about his firm’s challenges. In this case (and many others lately) I didn’t need to prompt the discussion or point out various pros and cons. The executive already had the talking points, and only needed a sounding board to weigh them.

Of course, we are prepared to follow up such discussions with clear recommendations and actions. Our team is helping forward-thinking firms move away from internally-built monolithic platforms (think AS400) or worn-out vendor solutions that became outdated a decade ago. We’re helping clients focus on more effective methods for capturing data nearer to its source, and then maintaining and managing that data by partnering with specialized function-specific vendors. We see more clients working to achieve a “golden source” of data, usually with the aid of a third-party vendor, and then partnering with best-in-class vendors to leverage web services and expand data access. Of course, connectivity with mobile devices is a powerful continuing trend.

Looking Ahead

Three thoughts are front-and-center as we anticipate the next 45 days.

1. The 2013 TechLeaders conference is just a month away.

2. We are growing our vendor research capabilities to meet expanding needs of our market.

3. We will soon be revamping and re-introducing our paid-subscription newsletter.

TechLeaders Conference

Beacon Strategies again will serve as educational editor for the 2013 TechLeaders Conference, to be held March 13-15 at the Omni Mandalay Hotel at Las Colinas, in Irving, Texas (Dallas-Ft. Worth metro). This conference has an ideal size and format for you to meet the leading technology providers who are supporting the enterprise needs of broker-dealers and financial professionals. Based on attendee demand, we will emphasize personal interaction, discussion and debate – including many opportunities to get better acquainted with tech vendors and hear their best ideas. Our breakout sessions this year will use a roundtable format to encourage brainstorming and relationship-building. You will walk away from the conference with the right information to make important decisions, plus the contacts to help you implement them. Needless to say, there will also be opportunities for warming up in the Texas sunshine and enjoying recreation and social opportunities with other attendees.

For more information, including registration coordinates, see: www.techleadersconference.com

Vendor Research

To help you gather information and keep it updated, Beacon Strategies is forging ahead to build the most comprehensive vendor database in our marketplace. For some time, we have been consistently benchmarking vendors through our comprehensive, proprietary methods. For each vendor, the full process requires detailed analysis and charting over many months. We now are expanding our vendor research capabilities with the build-out of Beacon Ocean, a database-centric application that can deliver up-to-the-minute information, along with comprehensive data and benchmarks on vendors. We also are enhancing our ability to distribute this data to meet your requirements and on-demand needs.

Look for more information about Beacon Ocean and our expanded vendor research, coming soon.

Industry Newsletter

In mid-March, we will be re-launching our paid-subscription newsletter, The Beacon, with new information and features. Subscribers will receive timely, high-quality information delivered four times per year. The Beacon’s expanded content will include a marketplace statistics dashboard, industry-specific articles, plus useful details from our interviews of industry leaders and surveys. You will also have access to our Industry Channel Markers and other data derived from our research. You will find the subscription competitively priced and well worth its cost in terms of the time and money saved in keeping your IT ahead of the curve.

Well, my captain is speaking, so it must be time to descend from altitude and wrap up these ideas. To summarize: The broker-dealer business and its tech-related firms are not in a recession!

In fact, I can’t remember another year that has started this fast and exciting. Looking forward, we hope to be seeing you and maybe visiting your shop this year. In any case, we’ll be keeping up the pace of research, analysis and ideas. As always, if you have any questions, give a call, email, text, or shout on LinkedIn.

All the best,

Chip

The post Reflection from 35,000 feet on the first 45 days of 2013, and thoughts on what is ahead appeared first on Beacon Strategies, LLC.

The broker-dealer (BD) industry is rapidly completing the first phase of its technology-driven transformation. Today, there isn’t a thriving BD left that hasn’t accepted technology’s ability to help drive automation, productivity and cost-efficiency.

As we enter 2013, the challenge of defining the next phase of business model development and technology solution deployment has begun, and success will require a fundamentally different set of skills and priorities.

In the first phase, most companies shared common goals that related to basic infrastructure development. In the 2012 TechLeaders Survey, BD executives coalesced around three key areas: account-opening and new business onboarding, improving overall data management and enterprise compliance and surveillance.
As we move forward, the environment continues an ever-changing progression. Regulatory, competitive and economic pressures are growing and posing a new and different set of challenges for each segment of the BD industry and for business models. For 2013, there is no standard template executives can follow to guide technology planning and resource spending. Creative “outside-the-box” thinking and strategic vision is required.

Pressures Defining Technology Priorities and Planning
The increased pressures facing the industry are broad and powerful, and they affect all firms. Just imagine these pressures as strong headwinds, and each BD is a sailboat with a different configuration of hull, keel and sails. Executives now must “read the winds” and make decisions to keep their boats in the competitive flow, even when competitors appear to be tacking in different directions. The pressures are:

• Regulatory: Regulators are pressuring n the industry on several fronts including: increased rigor in monitoring investment professionals, more scrutiny of sales practices and suitability in specific products such as variable annuities and alternative investments; and new standards for the collection and evaluation of “Know Your Customer” data, both at the inception of the relationship and for specific transactions and strategies.

• Competitive: To attract breakaway wirehouse advisors, independent BDs are developing product, service and technology platforms that aim to match and enhance the experience these advisors have previously enjoyed. This challenge is magnified by the diversity of business lines and data sources independent BDs support – i.e., brokerage, direct mutual funds, insurance, and annuities. The current wave of roll-ups among independent and insurance BDs is creating additional competitive demands. For example, executives of the consolidated firms need better dashboards for business planning, sales force integrations, and regulatory supervision.

• Economic: A BD’s “technology ecosystem” comprises of applications and processes that drive firm-wide business solutions. Currently, building or integrating a technology ecosystem requires about 18-36 months of development and several million dollars of capital, at a time when BD staffs are overstretched and profit margins are thin. The upfront cost of a BD’s eco system is often perceived by many executives as too expensive. Any mistakes or deployment delays can significantly increase costs while also creating disruption, with potential losses of advisors and customers.

The Most Critical Strategic Choice

In our recent conversations with BD decision-makers, we have been hearing the same basic strategic question focusing on “next-step” priorities. To paraphrase it, many BDs are asking:

• “Should we focus on upgrading the part of our platform that will produce near-term results and revenues – e.g., front-end processes and advisor workstation?”

• “Or should we commit available resources to the nuts-and-bolts of our business, our back-office operations support infrastructure, which is often viewed as a cost center even though it may have more strategic impact over time?”
While this is the right question to ask, there is no single “right answer” for every firm, and there are many shades of gray in between.
The best answer for each BD will emerge by:
• Conceptualizing a view of where the industry is heading, and the positioning that will give each firm the greatest competitive advantages over the short- and long-term.

• Designing, building and deploying comprehensive business processes and technology roadmaps that incorporate the demands of each firm’s unique business model.

• Supporting this process, and related vendor-partner choices, with comprehensive marketplace intelligence and due-diligence research.
In other words, the answer isn’t just where your firm should focus next in allocating capital and staff resources. Rather, it is how “whatever you do next” connects to the firm you want to become over the next decade.

Best-Practices Standards

As you plan your firm’s tacks into the headwinds of change, it will help to keep sight of the industry best-practices. Regardless of a firm’s segment, size or business model, these practices are accepted by the industry’s leaders.

1. Effective, proactive data management

• The BD strives to gather client and transaction data in the field (at the source), with data input by investment professionals and sales assistants who are closest to clients.

• The BD partners with technology vendors who possess a strong data management track record, with demonstrated ability to share data seamlessly with other solutions, both internally and externally.

• The BD deploys collaborative business processes and workflows that efficiently link field offices with the back office.

2. Productivity partnerships – The “next phase” is too complex and costly for most BDs to navigate alone. Industry thought leadership will be driven by choosing partners and vendors in areas such as:

• Gathering, disseminating and sharing information – such as experience with client relationship management (CRM) systems.

• Creating more efficient workflows – including forms management, rules-based compliance oversight, and document storage.

• Using existing resources to address needs and solve problems – such as sales practice suitability reviews, post-transaction surveillance reviews, and flexible management reporting.

• Using visual layers driven by roles and entitlements to deliver consistent information: aligned with overall branding; and delivering common contexts for firm-wide problem-solving.

In summary: Intelligent BD executives accept the challenges their firms are facing, while also acknowledging that technology is creating sustainable productivity gains and competitive advantages. They are using the industry’s best-practices to guide strategies that will maximize their firms’ current strengths and opportunities that will stand the test of time.

The post Broker-Dealer Technology 2013: Priorities Shift as Pressures Increase appeared first on Beacon Strategies, LLC.

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Article source: http://techleaders.podbean.com/2012/10/24/solving-data-management-issues/

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What famous portfolio manager lives on this point?

Vacation is good for a great many reasons. The time certainly serves as a period of decompression that rejuvenates the mind, body and soul. Time off also can be a great time for intellectual curiosity and associated thinking, as well as for just plain relaxation and enjoyment.  My time off this past week offered me the luxury of reading spy and espionage novels, which always captivate me. Vacation also allowed me to spend some time with friends, chatting over a couple of cups of hazelnut coffee. These particular friends, Jane and Pat, we see for two weeks every spring, but have never explored any interests beyond golf and the beach.  Yet, on this special summer trip to New England, we sat on their deck overlooking Marblehead harbor and its surrounding islands, and spoke in depth of their work experiences. Jane and Pat are retired phone executives that spent their careers at New England Bell, NYNEX and finally Verizon. They have been retired for ten plus years. Our conversation centered on how their job responsibilities over the years, through the various iterations of “Ma Bell” had revolved around building infrastructure. This infrastructure is the foundation for the multi-dimensional communications and data consumption environment that allows us to live, work and play with our smart devices.

Why would the experiences of these two retirees be interesting to me and to our readers? Two words: business design. Our discussion was truly relevant in a number of ways. The challenges they faced with New England Bell, NYNEX and finally Verizon directly relate to what we see in our industry. First, over fifteen years ago, these telecom pioneers were thinking about and solving many of the same issues that the financial services industry struggles with today. Integration, data flow, parsing, data management and regulatory challenges were as critical to the telecom environment then as they are to financial services now. Next, their body of work began in a think tank environment and then evolved to production, allowing their firms to test and develop solutions that would be able to be applied on a grand scale. (Thank you Bell Labs!). As executives, they dealt with the initial ideas of multi-tenancy and expandable, responsive systems.  At that time, big firms and government agencies like IBM and NASA were using the phone companies’ infrastructure systems, because their own platforms did not have the scalability they needed, and the phone utilities did. These processes, designed 15 to 20 years ago, are still vitally important, and now allow us to go on our smart phones and computers to accomplish just about anything we wish. Many of the challenges Beacon faces while working with our broker-dealers’ clients – including integration, data management, scalability and multi-tenancy – were overcome in another industry at least fifteen or more years ago.  It is a bit mind-bending that the technology in the financial services industry has lagged when other industries have gotten over similar hurdles.

The most meaningful thoughts taken away from the sun-drenched morning last week on the porch, with my cup of coffee, was the idea and term ‘business design’.  Pat and Jane referenced this term on numerous occasions. I wondered, “Is this antiquated or retro term”? The more I thought about it on my subsequent walk around the harbor, the more I came away thinking the term ‘business design’ is vague but brilliant, and certainly retro. Business design, done correctly, is an undertaking that explores and builds both top down and bottom up processes that allow one to plan a thoughtful infrastructure system that can stand on its own legs for years to come. Business processes and needs, properly defined, have the flexibility to grow and evolve. Technology can then be wrapped around those processes. The result is a more efficient and effective platform that has the capacity to morph as ancillary business processes and needs change. What I thought was really cool was that after an hour of hearing what they did, and they heard what Beacon does, we figured out that though separated by 15 years of time, we did the same thing.  We both were, and are, business design experts. As I took that last sip of coffee before going on my walk, the thought that permeated my thinking as clear as could be, is: “The financial services infrastructure profession and Beacon Strategies, LLC can, and should, learn from other industries’ experiences.  We can learn a great deal, and should be prepared and ready to take advantage of that knowledge.”

Fair seas and trailing winds -

-Chip

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Join Chip Kispert and Greg Barcus of MyOfficePortals for a TechLeaders discussion. Chip and Greg discuss integration and how technology companies can effectively partner with clients to solve for the major issues facing broker/dealers.

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