A revolution has started in broking when it comes to technology. In a very short space of time brokers, who once had the reputation for being sceptical about technology, now find it an increasingly important item on their agenda. This is as true for large brokers as it is for small brokers.There are three reasons for this:Technology has come a long way very quickly - modern business administration systems give organisations the ability to manage and control their businesses by understanding what is going on at a very detailed level. FSA requirements are forcing brokers to adopt a systematic approach to managing their businesses accountably. There is an understanding that with the right tools on board, broking businesses can be more effective and profitable.
A rapidly increasing number of brokers are now knocking on the doors of software houses. Industry commentators, backed up by recent market research, also confirm that brokers see technology as fundamental in moving their businesses forward. Any broking organisation that decides now is the time to change its IT system, might typically have had one, but more typically several, systems in place. That broker has two options: build on the old system or start afresh. The right, and cost effective decision, is to start again. Building on a legacy system is like trying to decorate over many layers of wallpaper in a room; it can be done, but the results would only disappoint.Viva la revolution
But revolutions can be painful. The problems with Kinnect certainly gave those wary of IT initiatives across the market some ammunition. While that particular technology initiative didn't work, the events need to be put into perspective. You don't stop driving altogether, for example, just because one car lets you down. Brokers across the market are embracing new technology fully realising the benefits; it's available, it works, it's a great tool. While many organisations find the process daunting, getting it right is a relatively straightforward process; it's simply a matter of asking the right questions in the right order.First, for every size of broking firm, business objectives and processes need to be looked at ahead of any technology requirements. Involving your technology partner at this stage will really beneficial.Brokers should be asking, what does the business look like today and where do we want to take it? This has to be undertaken in the light of market developments and requirements, such as consolidation, electronic trading, issues about contract certainty and client monies. Further questions need to be asked about efficiency, effectiveness, profitability and, of course, compliance.Fixing goals
Once the organisation's problems and issues have been identified and the business goals established, the technology underpinning your operational strategy can be planned and implemented. Keeping those fixed goals is very important otherwise no real progress will ever be made. You must set the finishing line, before you start running.The revolution will continue to gain momentum this year and throughout 2007. Brokers will benefit from taking a strategic approach to their business and technology requirements. Implementation problems can be avoided by carrying out a thorough business analysis and setting goals ahead of any thoughts about how to use the technology. So if you are looking to gain maximum business advantage now is the time to start asking the right questions.
Michael Graham is director of Sequel