As the industry moves towards a cloud-based infrastructure, firms are increasingly considering migrating their SimCorp Dimension® application to the cloud. There are a number of strategies that can help achieve this goal:

1. Hosting SimCorp Dimension on a public cloud infrastructure
   • With application management performed by in-house staff, or
   • With application management outsourced to SimCorp via their Application Management Service (AMS)
2. Moving to SimCorp Dimension as a Service on the SimCorp Saas Platform, or
3. Switching entirely to another cloud native platform.

Each of these options has its own advantages and disadvantages, and the decision on which is most suitable ultimately depends on a firm’s specific priorities and strategy.

In this article, we will explore the selection process between strategies 1 and 2 to help firms make an informed decision on the best approach for their SimCorp Dimension migration. (We will only briefly be looking at switching entirely to another platform)

Cloud Strategies

Keeping the SimCorp Dimension platform on-premises provides complete control and tailored security for the firm’s critical data and processes. However, it also typically requires substantial dedicated IT resources for support, changes, maintenance, and upgrades, which can be both costly and time-consuming. Additionally, it may also limit the ability to scale as the business grows, and firms may miss out on some of the benefits of SimCorp’s cloud-based infrastructure, such as cloud native solutions, expert knowledge, operational resilience, and increased agility.

Lifting the application to a public cloud infrastructure can provide scalability and cost-efficiency, as it enables the firm to leverage the cloud provider’s IT resources and expertise. However, it still requires some IT management, and the firm may need to invest in additional infrastructure to connect to the cloud. Additionally, the firm does not leverage the full potential of cloud first features and may face challenges in integrating with other systems that are not on the same cloud provider. In essence, hosting SimCorp Dimension on a public cloud infrastructure only enables the infrastructure benefits of the cloud but leaves business optimizations and application optimizations on the table.

Moving to the cloud with SimCorp SaaS provides the benefits of the public cloud infrastructure reducing the need for IT operations. It enables the firm to focus on core business activities while leaving the IT management to SimCorp. Ideally this relieves resources for value generation, however it also requires relinquishing some control over the system to the service provider. The firm may still face the same challenges in integrating with systems that are operated locally or with another public cloud provider. At the same time, Platform as a Service (PaaS) and Software as a Service (SaaS) solutions could help firms leverage many cloud-native innovations “out of the box”, while unlocking more value from data with machine learning and other advanced tools

When going through such a massive infrastructure change, it is obvious to also consider whether your current investment management platform is compatible with the firm’s long-term strategic roadmap. While switching to another application on the surface may look attractive and may provide modern technology and flexibility, at the same time as reducing the legacy configuration from a mature platform, firms should be aware that such a decision requires a potentially significant investment both in time and resources. Further to this, a new platform may not offer the same customizability or breadth of functionalities as SimCorp Dimension, which could be a disadvantage for firms that require a broader range of investment management functionalities. In addition, there may also be challenges with integrating with other systems and changes to existing internal business processes built around SimCorp Dimension.

SimCorp SaaS vs Public Cloud Infrastructure

The SimCorp SaaS Platform offering of the Dimension suite entails hosting, management, workflow execution, and support via Microsoft Azure public cloud.

Handing over the management of your SimCorp Dimension platform to SimCorp has some clear advantages; access to deep technical understanding, extensive support framework, central management of patching and upgrades, and potentially decreased resource allocation. It typically also results in smaller internal support teams maintaining the application. However, handing over the platform to standardised management also has its own challenges – a few being; decreased detailed knowledge of bespoke development and history, migrating out of associated business-critical applications, and using a central workflow scheduler. Additionally subscribing to as-a-Service offerings may also be more costly than running applications on-premises.

Between the “on-premises” hosted application (option 1a) and the software-as-a-service (option 2) on the public cloud, a third cloud option exists (option 1b). This is neither on-premises, nor full-blown as-a-Service application management but leverages some of the key features of the public cloud; availability, scalability, and decentralized access, at the same time as it removes itself from most of the IT management and service activities. Finally, firms should decide whether to adopt a lift-and-shift approach (rehosting), rearchitecting/re-platform, or rebuilding/refactor the application as well as consider the complexity, downtime tolerance, data location, security considerations and potential impact on end users during and after the migration process.

The business case should focus on such essential aspects when determining what is the best fit for your organization.

Cloud First Features

It should be emphasized that going forward we expect some SimCorp Dimension new features will be prioritized for the managed services and hence can have better support out-of-the-box when running within SimCorp SaaS. Examples include test management, upgrade services and spinning up production ‘clones’ (e.g. for development environments). Even though SimCorp has stated its commitment to on-premises clients, it is to be expected that going forward, new features will be developed with a cloud first approach in mind and over time only limited versions of this may be made available to on-premises installations. Some examples of this are the configuration management service and continuous deployment. Another example is the batch management service, which is included in the SimCorp SaaS offering, but may also be acquired for on-premises and hosted platforms via an additional agreement with SimCorp for “Application Management Service” (AMS).

In certain cases, it can be practical for firms to opt for an AMS-agreement first, as it serves as a natural steppingstone prior to a move to a fully serviced platform.

However, SimCorp’s persistent focus on cloud enabled applications, modules and “Business Process as a Service” (BPaaS) ensures the longevity of the investment management platform in the cloud.

Finally, time-to-market, strong computing capability and unlimited storage, inbuilt security and authentication, and above all, inherent capabilities to deal with big data in real-time and integration with other products; all presents a good case for having a cloud-first strategy.

Feasibility, Scoring and Selection

The selection process for moving SimCorp Dimension to the cloud typically involves several steps. First, a cloud fitment assessment is performed to determine the suitability of each cloud migration strategy for the company. This assessment evaluates factors such as application complexity, integration requirements, and data security. Based on this assessment, the firm can then determine which cloud deployment strategies is the best fit.

Next, an impact analysis is conducted to evaluate the potential impact of the migration strategies on the firm’s operations. This analysis assesses the potential risks and benefits of each migration option, considering factors such as cost, time, and resources required. The results of this analysis can help the firm to determine the feasibility and viability of each option.

Finally, a cloud migration viability analysis is performed to evaluate the potential risks and benefits of the chosen migration options. This analysis takes into account factors such as data security, integration requirements, and potential impact on business operations. Based on this analysis, the firm can initiate the evaluation and scoring phases, which helps identify which option best meets their needs.

Option scoring is a critical step in the selection process for moving SimCorp Dimension to the cloud. This process evaluates the suitability of each option based on various factors, including strategic fit, daily operations, regulatory requirements, migration cost, and vendor dependency. Strategic fit refers to how well each option aligns with the firm’s long-term strategic roadmap. This includes considerations such as the ability to scale and support new business initiatives, and the potential for future technological advancements.

• Daily operations – look at the impact of each option on the firm’s day-to-day operations. This includes evaluating factors such as system availability, performance, and user experience.
• Regulatory requirements – the extent to which each option meets regulatory compliance requirements.
• Data Management – look at where data will be stored and how it will be managed for each option. Areas like data security, data privacy, data transfer mechanisms, backup and recovery processes and integration with existing data systems should be investigated.
• Scalability and Performance – identify the firms need to scale dynamically based on varying workloads – remember to look at ongoing operational expenses.
• Migration cost – cloud migrations are typically costly, and projects can take long time, hence financial implications of each option should be properly evaluated and both short and longer term costs fully understood.
• Vendor dependency – assesses the extent to which the firm will rely on the cloud provider or a vendor for ongoing support and maintenance.

Once these factors (and other factors specific to the firm) have been evaluated, each option can be assessed and scored based on its suitability for the firm’s needs. Below is an example on how the different options can be compared to determine which option is the best fit for the firm’s long-term strategic roadmap:  

The areas are weighted according to business impact and contribute differently to the overall scores.

In the end, the final comparison and proposal should be made based on the overall score of each option, considering the firm’s specific needs and priorities. Such a proposal should include a detailed plan for the migration process, including timelines, milestones, and cost estimates, as well as a plan for ongoing maintenance and support. Migrations without a clear strategy on how and when to expect value realization, with incomplete planning, or poor execution typically end up costing more than budgeted. Ultimately, the goal is to ensure that the chosen option is the best fit for the firm’s long-term strategic roadmap and supports its IT and business objectives.

In our third article in this series, we discuss the actual migration and all the key tasks involved and look at how to optimize the new environment.

At Axxsys we have extensive knowledge and experience of facilitating the selection process and migrating SimCorp Dimension to the cloud across investment managers, so if you would like to know more about how we can support your cloud strategy please contact us at info@axxsysconsulting.com

Blog authors:

Jakob Banning, Senior Manager, Axxsys Consulting

Morten Friis, Head of Investment Servicing Technology, UK & ME, Axxsys Consulting

Definitions:

• Rehost/”Lift & Shift”: Moving applications to the cloud as-is.
• Re-architect/Re-platform: Move applications to the cloud without major changes — just tweaking to take advantage of the cloud.
• Rebuild/Refactor: Modify applications so they work in the new cloud environment.