Stepping Forward: Examining the Pros and Cons of Modelling Platform Migration

Author: Clare Stone

Modelling platform migration is a process that provides significant benefits to the business and allows you to realise the full potential of your modelling capability. It’s not so much about new features, but more about cost savings, risk mitigation, innovation and faster delivery. Our White Paper ‘Lowering the Modelling Platform Migration Hurdle’ covers this in more detail, but here’s a taster for you.

The Current Business Environment

The first generation of financial modelling platforms appeared in the mid-1990s, and most of them still exist today. The focus at the time was to build elaborate solutions to solve the latest market challenge rather than considering the scalability, transparency or resilience of the system.

So what are some of the problems organisations are facing today?

  • Complex models and processes that are dependent on specialist and exotic skills
  • Fragmentation of models, data and related systems
  • Increased costs of change due to complexity
  • Limited scalability and opportunity to embrace new technology paradigm

And the list goes on… All of these are costly and time consuming. Let’s not forget that getting buy-in for any change can be challenging especially when other parts of the modelling ecosystem are typically owned and supported outside of the actuarial function.

The Benefits & Drawbacks

The modelling platform migration story has been complicated by a number of factors, including the high cost, effort and risk associated with change, and the relatively small marginal benefits from moving from one first-generation platform to another. Any modelling platform migrations that have taken place have typically been carried-out in the context of model consolidation initiatives, usually as the result of M&A activity, where cost or resource reduction is the primary consideration.

Now consider the pros of embarking on a migration project with Software Alliance.’s loosely coupled and open architecture makes model migration from competitor platforms a realistic and tangible possibility. The calculation kernel enables models developed elsewhere to be completely consumed with a modest amount of effort. The flexibility of the platform, particularly connectivity to legacy data sources, allows all other parts of the modelling ecosystem to initially be left unchanged. You can therefore focus on the core model migration and leave existing data, assumptions, output and any associated processes and dependencies untouched. Just porting core model logic across still has the potential to unlock immediate performance, transparency and flexibility benefits.

Assessing the Problem & the Opportunity

Software Alliance has successfully migrated platforms for various customers. Before you begin any migration programme it’s worth understanding the size of both the challenge ahead and of course the potential benefits on offer. We have outlined the potential level of effort (and indicative cost) required to port a model from a code-based competitor platform to in the White Paper ‘Lowering the Modelling Platform Migration Hurdle’ which is definitely worth a read.

For more information regarding the Financial Modelling Platform and to discuss the potential benefits of migrating your legacy modelling platform to, please get in touch.

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