July 15, 2015

Cutter Associates, a leading provider of operations and technology research and expertise to the investment management industry, recently completed comprehensive research on Order Management Systems (OMS). The study found that since 2011, when Cutter last performed an OMS study, core OMS functions have become commoditized. “The definition of what an Order Management System does has expanded well beyond what is typically considered to be core functionality,” explained Mary Storrs, Principal and Director of CutterResearch. “The arms race of functionality is driven in part by the traditional OMS vendors competing amongst themselves, but also by competition from vendors who historically provided broader platforms to support derivatives and accounting.” To maintain existing clients and compete with new market entrants, vendors are now focused on adjunct functions, including portfolio management tools like IBOR and risk measurement and even functions such as performance measurement and attribution. Vendors are also focused on expanding the services they offer, including not only hosting software, but also managing data sources and even providing compliance advisory services.

But the research revealed even higher demand for improvements to existing offerings, including service, support, and upgrades. Kathy McDermott, a co-author of the study, said, “Participants were less concerned with expanded functionality, and more concerned with service. First level support, inability to influence the vendor roadmap, and challenging upgrades were specific areas of frustration.”

The study found that a significant number of firms currently using multiple order management systems are looking to consolidate in the next five years. To position themselves for success, vendors will need to increase existing clients’ satisfaction with service and ease of implementing upgrades, while simultaneously adding the peripheral functionality most sought-after by prospects.

The full 200-page research report on Order Management Systems, which includes Cutter’s expert perspective on the current market and full reviews of 11 leading vendors and solutions, is available online exclusively to CutterResearch members.

About Cutter Associates, LLC

Cutter Associates, LLC serves the operational and technology needs of the global asset management industry, providing clients the tools and services they need to be successful. By leveraging multi-faceted expertise and an unrivaled knowledgebase, Cutter Associates provides clients truly independent research, exclusive member-only events, custom operations benchmarking, and a global consultancy for strategic advice on and delivery of operational and technology excellence. Cutter Associates works with the world’s leading asset managers, providers and servicers. Headquartered in Hingham, MA, Cutter Associates has subsidiaries in Canada and the UK, and is on the web at www.cutterassociates.com

Whether developing operational strategies that drive meaningful value, or evaluating, selecting, and implementing systems, Cutter is here to help.