From fragmentation to integration: Mastering platform implementation in investment management

Introduction: The platform transformation imperative

In a dynamic financial landscape, investment managers face persistent pressure to enhance operational efficiency, ensure regulatory compliance, and deliver a superior client experience. This imperative has driven a significant shift away from fragmented ’best-of-breed’ technology landscapes towards more integrated, platform-centric solutions. This article looks at the critical process of platform implementation, offering strategic insights and outlining Deloitte's best practices.

The transition from fragmentation to integration

Historically, investment managers have often adopted a best-of-breed approach, selecting specialised tools for discrete functions such as portfolio management, trading and or compliance. While offering deep functionality, this strategy inevitably led to fragmented data silos, redundant processes, and elevated integration and operational costs – something we refer to as an ’integration tax’. This hidden levy manifests itself in delayed product launches, manual reconciliations, and an IT budget consumed by maintaining complex point-to-point connections rather than fostering innovation.

For Swiss investment managers, given the critical importance of operational excellence and stringent regulatory adherence, this integration tax is particularly burdensome. The need to manage cross-border complexities, comply with UCITS and MiFID II, and align with FINMA and FIDLEG requirements, alongside initiatives like T+1 settlement, demands highly interconnected and agile systems. The future calls for a move towards more integrated platforms, offering streamlined workflows, real-time data access, and simplified vendor management. 

Platform implementation: A structured transition

Implementing an investment management platform is an inherently complex process, requiring careful planning and execution. To ensure successful transformation, it is essential to follow a structured approach, in five phases. 

Architectural considerations and strategic choices

When considering platform approaches, investment managers must evaluate three main architectural archetypes:

Best-of-breed: Offers deep functionality and flexibility but suffers from complex integration, data inconsistencies, and vendor sprawl.

Semi-integrated: Provides balanced functionality and flexibility with easier orchestration but requires strong internal architecture and governance.

Front-to-back: Delivers a single source of truth and seamless workflows but carries risks of vendor lock-in and reduced modular flexibility.
 

The challenge is greater for firms managing multi-strategy portfolios combining liquid and illiquid assets. A monolithic platform may falter when confronted with diverse lifecycle management needs of private equity or real estate. Forward-thinking firms are adopting a ’platform of platforms’ approach, building a core, unified data layer – often a cloud-native Investment Book of Record (IBOR) – and connecting specialised modules via open APIs. This hybrid model provides consolidated risk views while retaining specialised functionality.

Deloitte's best practices

Drawing on extensive implementation experience, Deloitte emphasises several critical success factors:

BRD and contractual framework definition: Robust Business Requirements Documents (BRD) and clear contractual frameworks with measurable Service Level Agreements (SLAs) eliminate ambiguity and ensure accountability throughout the transition process.

Functional analysis COM vs. TOM: Comprehensive analysis comparing the Current Operating Model (COM) with the Target Operating Model (TOM) identifies gaps and opportunities, ensuring optimal alignment of business objectives with platform capabilities.

Migration approach: Investment managers must make a careful choice between a ’big-bang’ and ’phased implementation’ approach. Phased implementation allows smoother transition and risk mitigation, while ’big-bang’ offers speed but carries higher complexity risks.

Change management: Effective stakeholder engagement through communication, training and support is essential for building buy-in and facilitating platform adoption. Upskilling the workforce maximises platform benefits.

Alignment of ways of working: Successful implementation requires alignment between organisations and platform vendors in terms of support models, establishing effective third-party management frameworks and continuous collaboration recalibration. 

Conclusion: Building for future resilience

The future of investment management technology lies in modular, interoperable ecosystems that enable innovation and resilience. Emerging ’composable architectures’ and cloud-based platforms offer new possibilities beyond traditional best-of-breed versus all-in-one debates. The future is evolving towards dynamic, intelligent ecosystems powered by Generative AI and Data-as-a-Service (DaaS).

For Swiss investment managers, competitive advantage will lie in combining their tradition of operational excellence with technology architectures built for agility and innovation. At Deloitte Switzerland, we help investment managers navigate this complex journey, transforming challenges into opportunities through in-depth sector expertise and proven methodologies. Whether exploring full platform migration, building hybrid architectures, or future-proofing existing systems, our multidisciplinary teams guide end-to-end transformation. The time to invest in that future is now; waiting is no longer a viable strategy.

Authors

• Daniel Hirs, Partner, Technology & Transformation, Investment Management
• Ueli Preisig, Director, Technology & Transformation, Investment Management
• Michiel Simonis, Manager, Technology & Transformation, Investment Management