AlphaChat: Architecting future-proof investment data management

In our latest AlphaChat, host Stephen Huppert speaks with Bryan Stephens, Head of Customer Transformation at AlphaCert, about the growing momentum behind enterprise transformation in investment management. They explore the regulatory shifts, operational challenges, and evolving investor expectations that are prompting firms to rethink how they manage systems, data and risk.

Bryan shares his insights into what makes transformation efforts succeed, or fail. From legacy system challenges and AI integration to the critical role of enterprise architecture, change management, and communication, this conversation goes deep into the realities firms face. With examples from large-scale projects and practical advice for those just starting out, it’s a grounded look at the complexity of change, and what it takes to lead it well.

Read the transcript below.

Stephen Huppert: Welcome to today's episode of AlphaChat. We are diving into transformation in the investment management world. What's driving it, the challenges firms face, and how enterprise architecture is playing a critical role. My name's Stephen Huppert and I'm joined today by Bryan Stephens, Head of Customer Transformation at AlphaCert, and an expert in enterprise transformation and advisory services.

Great to have you here, Bryan.

Bryan Stephens: Thanks, Stephen for having me. Looking forward to this.

Stephen Huppert: So let's start with the big picture. What's really pushing investment management firms to transform right now?

Bryan Stephens: Yeah, look, it's a mix of external and internal pressures. So, externally we are seeing, you know, tighter regulations, more competition and investors are really expecting more personalised digital first type experiences. And internally firms are trying to do the standard reduced costs and streamline operations, that's kind of, status quo and the result is really an urgency to modernise systems and improve how data is managed and used. So that's what's really driving the transformation.

Stephen Huppert: Yeah, I mean those pressures of reducing costs and streamlining, getting that efficiency in the operations is something I'm hearing a lot of. However, it's never easy to, you know, throw out your old tech and get some new tech or even try to plug new tech into the old systems. So what's making the integration so tough and challenging for organisations?

Bryan Stephens: Exactly, Stephen. Yeah, it's really plug and play. Legacy systems weren't built for things like AI or cloud platforms or blockchain or all that sort of new technology that we're seeing. So when you try and layer on these new capabilities, you run into compatibility issues. You get, issues with, you know, the way the operations work, you get in increased operational risk and higher costs.

So if the integration of these technologies isn't handled well, then you miss out on the value that those technologies are supposed to deliver.

Stephen Huppert: And, you know, you mentioned AI there, Bryan. It's certainly the buzzword of the moment and I think unlike blockchain, which we are still waiting to see the impact, I think AI is having a very immediate impact and everybody I talk to is looking at how they can use AI both in the back office, but also in the front office.

So that's really important. And the operational risk that you referred to is certainly a huge factor, especially here in Australia with new regulation starting in about a month's time, that's gonna put a really tight focus on operational resilience and operational risk management.

Bryan Stephens: Yeah.

Stephen Huppert: You mentioned also the cost pressures.

How does that impact the decisions around the technology?

Bryan Stephens: Yeah, so it's a real balancing act for organisations. On one hand, they need to invest in that technology to stay competitive but on the other hand, they're being pushed to reduce fees and improve margin. So, every tech investment needs to be highly strategic and really focused on long-term value and not just a short-term fix.

Stephen Huppert: Yeah, I mean there's so much demand for limited funding. And when I speak to heads of investment operations that's one of the big challenges, that they are expected to do more with less.

Bryan Stephens: Yeah.

Stephen Huppert: And also, you know, being in the back office it sometimes doesn't get the attention that it probably should have.

So that's a really important one. And a key part of the evolution that I'm seeing in investment operations is around the data, how they use the data and how they manage their data. So there are huge amounts of challenges in their area. What are some of the common challenges that you see when you are talking to clients?

Bryan Stephens: Yeah, it's pretty consistent, Stephen. Like the big ones are poor data quality just real inconsistency and then also siloed systems. We still have a lot of siloed data. The fact that we have more access to data, means we're creating more silos. It's just, it's a challenge for everyone.

And a lot of firms really lack the proper metadata tools and the data governance frameworks and that makes it really hard for them to trust the data and use it effectively for decision making, so without that good foundation of good metadata and good data governance frameworks, then transformation's a real uphill battle for them.

Stephen Huppert: Yeah, it's interesting that you mentioned the data governance there. It's something that I've been seeing a lot of and having some conversations with people who are in the data governance field and they find it a real struggle to get the proper conversations at the high enough level around data governance.

It's seen as a bit of a compliance as opposed to actually this can really become a very solid foundation.

Bryan Stephens: Yeah.

Stephen Huppert: I think recognising that data governance is a critical foundation's important.

Bryan Stephens: Yeah, a hundred percent.

Stephen Huppert: Yeah. So, the big buzzwords that we've heard for quite a few years now is, 'we're a data-driven organisation'.

Lots of people talking about it. I wonder if anybody really understands what that means in practice. And that's causing huge amounts of challenges in trying to become that ideal data-driven organisation.

Bryan Stephens: Yeah.

Stephen Huppert: what are some of the challenges that you see people grappling with?

Bryan Stephens: Yeah, with a data-driven organisation, you can put those tools in place. But when you're talking about transformation, it's more than just the tools that you have. And I think one thing that a lot of organisations really fail to understand is that we're talking about an organisational shift, you know, you're bringing in new capabilities and you really need to position the organisation for those new capabilities.

So we're talking about new skill sets, new processes. We're talking about changing culture sometimes, and that's really hard to change. So, changing how teams collaborate and how decisions are made, it's a huge opportunity but you really need to take sort of careful approach to planning and supporting people as they go through that.

Stephen Huppert: And I guess it comes back to the basics. Any operating model, any transformation you've gotta consider people, processes and systems. And so often what I'm seeing is a lot of focus on the systems, the technology, but as you point out, forgetting the people and forgetting the processes.

And I like the reference to the culture there and what it even means to be data driven. And I think we need more conversation about that and that'll be really important. Organisations need to step back a bit and think, well, okay, I'm gonna be data-driven, but what will that even look like?

How will I know if I'm data-driven?

Bryan Stephens: Yeah. Completely.

Stephen Huppert: So, as we are thinking about the transformation, the term we used before was an enterprise transformation, so that's far reaching across the whole organisation. And it does disrupt, it can be quite disruptive for the whole enterprise, for the whole organisation.

So what are some of the key ingredients in your experience of a successful transformation project?

Bryan Stephens: Yeah, great question Stephen. One I'm pretty passionate about, to be honest. I've worked in projects a long time and I've seen great projects, I've seen poor projects and there's a range of factors. But look, key elements I think for me is you need really good governance in your project structure and I guess I'm talking about the hierarchy and the different sort of way that escalated. So when an organisation project gets stuck, it needs mechanisms to really be able to move forward and escalate the decision up to a higher authority to make that decision. So, governance is key. And then also, having a really well structured project team itself with clear deliverables that's super important, but it's really, it's a common mistake as well. In terms of organisations just really enough clarity or have the right roles there. So yeah, the project team really needs to have a mix of business experts,

project roles, project managers, business analysts, and the tech specialists, et cetera. I guess the other thing that I see commonly overlooked is like the project initiation document or some sort of scoping document or something that really sets that clarity. I guess people kind of feel like it's a bit of an administrative overhead to do that, but it really just sets the tone, it sets the direction, and it's super important. I really encourage people to make sure they do those project initiation documents or whatever sort of scoping document that you have at the start, before you embark on the actual transformation.

Stephen Huppert: Yeah, look, that's so important, and you're right. we've got a project and they just rush off at a hundred miles an hour and wonder why they don't get to where they need to get to. So, you know, it's interesting, your reference to that project initiation document or project charter, whatever it might be upfront, and, you know, everyone can have their own name for it, but really, as you were talking, it reminded me of the map that guides you. You don't just go off into the jungle and wonder where you're going. You do a survey, you'll get your map in place, you'll work out where you're going, what sort of equipment you need and you know, you could expand that metaphor into what type of people do you need along the way, depending on the terrain that you're gonna be crossing,

make sure you've got a fit for purpose team.

So yeah, all of those elements are really important.

Bryan Stephens: Yeah, that's a great metaphor. I like that, Stephen. I might steal that sometime.

Stephen Huppert: You're welcome. You're welcome.

Bryan, you've been involved in several large complex transformations. I'm sure there's some very good ones there that you can think back on, but there's also ones I'm sure that in retrospect you could have done things better. Do you want to give me a couple of examples maybe of some of the complex transformations and more importantly, the key learnings from that.

Bryan Stephens: Yeah, sure. So a lot of my previous experience with projects has been around Order Management Systems. So Order Management Systems, pretty poorly named to be honest. Nowadays they're literally the operating system for the investment management business. Whereas I guess originally they were primarily focused on just managing the orders, but they reach right into, all aspects of the front office and extend into the middle and back office activities as well.

Bryan Stephens: So order management systems is really one of the most complex and time consuming projects an investment management organisation could undertake. And I think that really comes down to the fact that people often overlooked the effect it has on people's roles.

Really thinking about the new processes that come as part of it, the old processes that need to be decommissioned and really, what's the change in roles and responsibilities and really how do we actually change people's job descriptions in some cases. So, I think in my past experience, that's probably one of the learnings I've taken away from doing these projects several times. Thinking about it more than just implementing a piece of software, but really, looking at it from a bigger picture and understanding how we need to implement the change, including taking people on the journey. That organisational change aspect I think is probably one of my key takeaways of the last couple of decades of doing these sorts of projects, it's really often a lacking piece in delivering these projects. So I really encourage people to pay more attention to that side of doing a project. Often you just want to get the piece of software in and get the processes working and that but, without doing that organisational change part it can feel really disjointed and it can be a quite a challenge for people in the organisation to really come on board on the journey.

Stephen Huppert: Yeah look, that's really consistent with I've seen, I've also been involved with a lot of large software transformations and I think a lot of people, especially on the business side or even on the technology side, think, okay, I'll pick up one box, put that aside, and put another box in place and everything's fine.

And they don't consider the actual ripple effects of that on the whole organisation. And your comments about needing to reshape workflows, can we do things better? And even the redefining of roles, I think is really important. So yes, we need that broader view. I mean, it reminds me, I'm old enough to remember getting rid of typewriters and putting in place a word processing machine.

And you know, the first time that was done, the workflow stayed the same people were doing it. But then we quickly realised that actually you could change the way you do things. You could design your business for the new technology rather than just using the new technology to do what you've always done.

So I think that's a really good example that you bring out there.

Bryan Stephens: It is so interesting how the technology changes, but the actual impact on an organisation doesn't change.

Stephen Huppert: That's right. That's right. So given all of that, what are some of the things that you've seen go wrong in these projects?

Bryan Stephens: Yeah, look, I think for me, communication is the big one. People really have different interpretations of project scope and what one person thinks is success, someone else doesn't agree with. And so, you really need to have a way of keeping everyone on the same page.

And that might be like, you know, frequent briefings and regular updates to help make sure everyone's on the same page, really clear documentation for all project members to follow because again, these people are working on these projects, day after day and it's tricky when the scope is changing and the direction is changing. And yeah, you really wanna make sure that everyone's rowing in the same direction. And things like architectural diagrams, visual representations of projects help clarify complex aspects and topics. And then defining the roles and responsibilities in terms of each project member's contribution. And that really helps with the decision making and avoids confusion and overlap. Communication is really a key thing when you're talking about enterprise transformation. And you really gotta find that that balance between too little and too much communication. 'cause too little is gonna lead to misunderstandings, while too much is gonna overwhelm people and,there's really a bit of an art to that. It's not a one size fits all thing, it needs to be tailored for the organisation mainly to do with cultural aspects of the organisation.

Stephen Huppert: Yeah, that's a really good point. Having that right sized or fit for purpose communication plan is critical, isn't it? Otherwise it just becomes another compliance thing. But understanding the organisation, understanding what the organisation needs, both within the project, but also the broader organisation certainly would help improve the chances of success dramatically.

Bryan Stephens: Yeah.

Stephen Huppert: So what are some of the ways to keep all the different stakeholders aligned? Because in these big, complex enterprise transformation projects. You've got a broad range of stakeholders, some of them with skin in the game, some of them not. Some of them may be not interested in the success of the project, or dare I say, even would undermine the success of the project. I mean, there's so many internal dynamics going on in these big organisations.

So how do we try and keep the stakeholders aligned?

Bryan Stephens: Yeah it's making sure everyone understands the current state and the future state and I guess that comes back to the making sure things are well documented or decisions are clear and and that everyone has a shared understanding of the goals and the context. So that's really key.

And I think architecture helps a lot with that current state to future state transition. Yeah, I think that's one of the tools that organisations can really use to help with effective communication.

Stephen Huppert: And I like the way you refer to communicating the future state as well. And I guess that really comes back to the why of doing the project. And I think that helps everybody along the way. So understanding why they're doing it, what are the benefits of doing this project, I think are critical.

You've referred a number of times as we've been talking today to change management. Talk a bit about the role it plays and where we can see how we can actually improve delivery outcomes.

Bryan Stephens: Yeah, so change management plays a significant role in enterprise transformation projects. It's pretty much, it is often an overlooked part of projects, but it serves as the interface between the project and the business at all levels from the executive level down to the end users affected by the transformation.

There's several critical activities that you need to think about with regards to change management. So I guess the obvious one is the, you know, role changes. If there's any role changes and role and responsibility changes you've gotta draft that stuff into people's position descriptions. And so that's gonna require close collaboration with your organisational design and human resources team to make sure you get that right. And guess another aspect of change management, which is probably the one most people think of is actually the user training. So sometimes people think change management is just user training, but it's not, you know, really the point I mentioned before about the role changes, I think is the most significant thing. But yes, user training is important, so you gotta provide that training on the new processes, the handover points between teams and make sure everyone's understanding how processes are gonna work in the new future state. And change management, another key

function it serves is acting as a regular checkpoint or having regular checkpoint forums and running that and really engaging the end user community, in terms of understanding where are they on their journey in this transformation effort. And are we heading in the right direction in terms of how they see things and feeding that back to high level management. Yeah, so I mean, change management, it's super critical. I think I've come to appreciate it more and more as time has gone on in terms of how much of a role it plays in success of large enterprise transformation projects.

Stephen Huppert: Yeah, absolutely. And you mentioned success in transformation. How do we measure it? How do we know if we actually achieve what we wanna achieve?

Bryan Stephens: Yeah. Yeah. I guess the answer in the nutshell is, you need clear, measurable goals tied to business outcomes. And you do that through creating these smart type goals. So, you know, specific, measurable, achievable, relevant, time-bound. So for example, maybe a goal's gonna be, to grow sales of product X in the Asia Pacific market by 10% in the next financial year. It really needs to be that concise. And that's really gonna help people understand, okay actually, through this initiative, what are we trying to achieve?

And more often than not, like you don't actually see that metric part assigned to an initiative. It's like do this piece of work, but you're not really told, what is the outcome we're trying to achieve? And for the project managers that's crucial. How do they know that their initiative has been successful?

Unless you can give them some sort of benchmark that you're trying to target. So, measuring success in a project, you know, it's different depending on who you are and what your perspective is. But definitely from the top level, there needs to be really clear guidance in terms of these sort of metrics that assigned to projects. Because as I mentioned, you know, everyone's got their own perspective in terms of project success. You might have an executive that considers a project a success if the sales growth targets are achieved. Meanwhile the salespeople are affected by this implementation of a new CRM

and they've basically seen increased workloads due to low level processes being inefficient. So, you know, they probably wouldn't consider it a success. So, there's an element of perspective when it comes to measuring the success of a transformation project.

Stephen Huppert: That focus on perspective and really appreciating that different people have different perspectives or different goals is critical.

Bryan Stephens: yeah.

Stephen Huppert: It really reminds me of a story of three bricklayers who were engaged to rebuild St. Paul's Cathedral after the great fire of 1966. I'm not sure if you're familiar with this story.

The architect, Christopher Wren, was commissioned to rebuild St. Paul's Cathedral. And one day he was wandering around the building site at the end of the 17th century, and he saw the three brick layers working hard, one crouched, one half standing, one standing tall, working very fast and very hard.

And so he said to the first brick layer, what are you doing? And the brick layer replied, 'I'm a brick layer. I'm working hard, laying bricks to feed my family.' So then Christopher Wren went to the second brick layer and asked the same question, 'oh, I'm a builder. I'm building a wall.' And then he went over to the third brick layer who seemed to be the most productive of the three.

And when he asked the question, what are you doing, that brick layer said, 'I'm a cathedral builder, i'm building a great cathedral to the Almighty.'

Bryan Stephens: Right.

Stephen Huppert: and that really does highlight having clear objectives, but also appreciating that different people have different motivations and different outcomes they're looking for.

Yes.

Bryan Stephens: Yes. That's a great analogy. I like that one.

Stephen Huppert: And so, you've mentioned enterprise architecture a couple of times. So let's focus in on that for a bit. How can that help when you're doing this large enterprise transformation?

Bryan Stephens: So enterprise architecture is a great tool. It provides a structured, holistic approach to integrating technology and modernising systems. So it enables organisations to break down the silos within the organisation. It's really focused at that high level of abstraction and it can really pull together the different silos within the organisation because, let's face it, you may sit, on the same floor as someone else, but often you don't know what they do.

So, enterprise architecture is really responsible for understanding all the parts of the organisation and really coming up with a comprehensive plan in terms of how a transformation can occur. And particularly I guess from that technology angle. But then I guess when you think about business architecture, which is a part of enterprise architecture or often thought of as a part of enterprise architecture, then that's really coming at it from a structured or strategic business planning type lens.

So enterprise architecture, it's a blueprint for supporting methodical planning and implementation of change and it helps investment management organisations maintain that operational stability while evolving to meet the future demands.

Stephen Huppert: And that's also important, isn't it? Yeah, it's interesting, I think we can all relate to that story of not really knowing what other people in the organisation are really doing and that can create all sorts of problems. So yeah, it sounds like enterprise architecture is a really valuable

framework we can put on top of what we're trying to achieve. And I imagine within that whole enterprise architecture kitbag, there's lots of different tools and frameworks that can be used. Are there some particular ones that you'd recommend?

Bryan Stephens: Yeah. Yeah. So look, most firms when they're starting out with enterprise architecture will just sort of use tools that they have available. This is Excel or PowerPoint or Confluence and that's fine. But I think as you grow, and definitely if you've got a more complex environment, then a specialised EA tool makes a really big difference. As frameworks, I'd say, TOGAF being the most well known, is one that everyone's heard of, but I'd caution against using it straight out of the box because enterprise architecture isn't a one size fits all type thing. You really need to tailor the way you do enterprise architecture to each organisation, in terms of its understanding of enterprise architecture, its maturity levels, its culture and you know, what regulations, it's affected by a whole number of different things. Yeah.

Stephen Huppert: So it sounds like the enterprise architecture is a great framework to use for helping you achieve success. But it's important to be adaptable. It's important to, I think, like we said before, be fit for purpose for your particular organisation.

Bryan Stephens: Yeah, exactly.

Stephen Huppert: Yeah. Yeah. And there's also a concept I've come across of a fractional EA model.

Could you explain what that is?

Bryan Stephens: Yeah, so a fractional enterprise architect, is basically when you get a highly experienced architecture professional engaged on a part-time basis. So like, maybe it's one day a week or one week per month, or maybe it's just on a per initiative basis. That's got a lot of benefits. Like if you're a small investment management organisation and you don't need to or have the budget to employ a full-time enterprise architect, then you know you've got this option of a fractional enterprise architect.

So, there's no doubt you're gonna benefit from having

Stephen Huppert: Mm-hmm.

Bryan Stephens: an experienced Architect engage with you. So yeah, look, it's a really cost effective way to get great talent, but at a fraction of the full-time cost. I mean, that's for the small investment managers, but even if you're a larger investment manager, a fractional architect can help move things forward as it's pretty common in the large organisations to have your full-time architects. Basically not able to extract themselves for long enough from the weeds to make any headway on big picture things like high level design or strategic planning or governance type things. So, real benefit for the larger organisations too. And if I can add one more,

Stephen,

I'd say organisations that are thinking about merger and acquisitions and we know that there's a fair amount of that that's been going on in the Australian market in terms of Superfund space. Enterprise architects really help there. And in particular, business architects can really help because they can offer sort of capability assessments across the two businesses and that helps you then determine, okay, which parts of the business is performing best from each organisation and, you know, which one might we keep? And really helps bring some data to those type of decisions.

Stephen Huppert: Look, that's a really important example, Bryan, and you're correct. There's a number of quite significant mergers happening in the Australian superannuation sector at the moment. One just being called off even. That's in the last few days, and you're right, bringing that lens of enterprise architect to that merger can be very beneficial.

So yes the role of a fractional enterprise architect sounds like a really valuable one. So how does as we're getting towards the end of our chat to today, Bryan, how does AlphaCert fit into all of this?

Bryan Stephens: Yeah, so AlphaCert's advisory team, we support the end-to-end transformation. So, that is enterprise architecture. We do business architecture. We do initiative planning for you, we'll help with it. We also are quite commonly involved in data governance type initiatives, and we specialise in investment management, so we understand the types of systems that you have, the regulations that are in place, and the operational processes and just the realities of trying to run an investment management business. And we've led major projects like order management system replacements and custodian migrations. And so we can really help organisations through those types of large scale enterprise transformations that they have.

Stephen Huppert: And that look, that experience and deep knowledge of investment management is critical. I've seen a number of large projects not be as successful as they could have. They got very good, very well qualified, experienced program and project management people, but they lack that domain knowledge.

And I think that it is really critical to have some deep domain knowledge when we are dealing with investment management and especially data. So that's a really important point you've brought out there.

Bryan Stephens: Exactly, Stephen. If I can just riff on that for a second

Stephen Huppert: Yeah.

Bryan Stephens: Particularly with the data. It takes a lot to bring someone up to speed on investment management concepts and particularly the data. And so yeah, you do often see projects that try to do maybe like warehouse implementation internally with business analyst project managers who don't have that investment management experience, can really drag on.

And so that's where AlphaCert really exceeds. Investment management is our subject matter expertise and we can really help you with any types of initiatives, particularly in that data space. And our broad range of skills can really help your organisation achieve success.

Stephen Huppert: And that broad range of skills should give a lot of confidence to an organisation that they really are increasing their potential for success. That's great.

Bryan Stephens: Yeah.

Stephen Huppert: So, as we wrap up then, Bryan, any final advice for investment management firms starting out on their enterprise transformation journey?

Bryan Stephens: Yeah, so super important, start with a real clear vision. Focus on alignment of the people involved in the transformation effort. Don't underestimate the people side of change. And if you're in doubt, get experienced help. Using enterprise architecture, business architecture, and experienced people within investment management type transformation initiatives can really save you, you know, years of rework and millions of dollars in costs.

Stephen Huppert: Yeah. And we've all seen that happen. So look, Bryan, that was really insightful, so thanks for joining me today and look forward to having further conversations.

Bryan Stephens: Great. Thanks Stephen.

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