25 Years of Global Insights: The Definitive Checklist for Investment Management System Success (Part 1 of 3)

Replacing a legacy investment management system is both a strategic opportunity and a significant undertaking. Not only for the organisation and its underlying infrastructure but also for the teams driving the transformation. Navigating questions and concerns around vendor contract, budget, operating model, functional requirements, methodology, timelines, and resource allocation can be overwhelming.

What should the new system be able to support? Which project approach should be adopted? How long will it take? How many people do we need, and which skillsets will be required? These are just some of the many questions needed to be answered when embarking on a large-scale transformation project.

About This Series

Drawing on Dimensional Community’s 25+ years of global implementation experience through our consultancy network, we have identified the patterns that lead to success and the pitfalls that cause delays. While every organisation is unique, certain core principles remain universal.

This 3-part article series provides a strategic framework for your transformation and migration, serving as a practical checklist to guide discussions before, during, and after your go-live.

• Part 1: Pre-Project Planning & Foundation: Vendor strategy, operating model, project management, and change management

• Part 2 (coming in February): Implementation & Execution: Core phases, data migration, testing, and stakeholder engagement

• Part 3 (coming in March): Go-Live & Beyond: Transition planning, post-implementation support, and operational excellence

What's Covered in Part 1

In this first instalment, we will focus on the phase leading up to a successful project start.

Specifically in this first article we will address the following topics:

1. Vendor & Contractual Strategy

2. Target Operating Model & Ownership Governance

3. Project Management Office

4. Change Management

1. Vendor & Contractual Strategy

A strategic vendor and contractual strategy is the first pillar of a successful transformation project and system implementation, ensuring the legal and financial framework supports, rather than hinders, the delivery reality. Firms must navigate the tension between fixed price models providing budget certainty but often lack flexibility to handle the complexities of investment workflows, and time and materials (T&M) structures, allowing agile adaptation but carry the risk of cost overruns.

Central to this strategy is addressing the inherent incentive misalignment between vendor and client. While a client defines success by long-term operational efficiency and platform adoption, a vendor’s success is often measured by meeting narrow, checkbox-style milestones or billable hours. To mitigate this, contracts should move beyond generic service levels towards a milestone-based approach incorporating performance-based incentives rewarding the vendor for business outcomes and KPI’s applicable to the client, such as a successful and signed-off discovery phase, solution deliverables, data migration and/or UAT. By aligning the commercial terms with the practical stages of the implementation, firms can prevent a contract-to-reality gap where the system is contractually delivered but fails to meet the outcome optimum of the investment teams.

Comparison of Contractual Pricing Models

Model	Pros	Cons	Alignment Risk
Fixed Price	High budget predictability; transfers financial risk to the vendor	Rigid scope; changes require costly and slow renegotiations	Vendor may prioritize speed and "minimum viable" quality to preserve margins
Time & Materials (T&M)	Maximum flexibility; easier to start quickly without exhaustive specs	Total cost is largely unknown, although a budget can help manage this; requires high client oversight	Vendor is incentivized by billable volume rather than project completion
Milestone based	Balances cost control with flexibility for complex phases (e.g., UAT)	Can be administratively complex to manage and track	Requires clear definition of completion criteria’s to ensure success is shared

Red Flags in Vendor Strategy

Choosing the pricing model which suits a transformation the best is only half the battle; the long-term success of an investment system replacement depends on how that pricing model is executed. Even a well-structured contract can be undermined by misaligned incentives or operational disconnects. To ensure your transformation remains on track, it is critical to monitor for specific behavioral red flags indicating the vendor strategy may be diverging from your organization’s ultimate goals. Examples of such red flags are:

• The "Shadow" Implementation: When the contract assumes the implementation will be relatively simple, but reality proves to require extensive customisation to meet the business requirements and thereby increasing the amount of work required.

• Scope Drift: A lack of clear sign-off points in the contract leads to continuous, unbilled (or over-billed) requests.

• The Handover Gap: Vendor success is marked at "Go-Live," while client success only begins 3-6 months later during business-as-usual (BAU) operations.

Vendor Evaluation Checklist

To help navigate these potential pitfalls during the selection phase, the Vendor Evaluation Checklist outlined below provides a framework for testing a vendor's claims against operational reality. By asking these types of targeted questions, you can identify whether a vendor’s proposed strategy contains the necessary safeguards to attempt to prevent any red flags before the contract is signed.

Evaluation Area	Key Questions to Confirm	Risk Indicator (Red Flag)
Delivery Reality	Can the vendor provide a demo using your specific complex data sets, rather than a generic "Golden Client" environment?	The vendor pushes back on custom data demos, citing "standard out-of-the-box" superiority.
Pricing Alignment	For Fixed Price: Does the contract include a buffer for the discovery phase? For T&M: Is there a monthly burn rate cap with mandatory status alerts?	No clear mechanism exists to handle the inevitable "unknown unknowns" found during data migration.
Incentive Structure	Are vendor payments tied to business outcomes e.g., a successful discovery phase, UAT sign-off or simply having delivered the functionality?	Payment milestones are based on calendar dates rather than functional milestones.
Expertise Consistency	Will the "A-Team" present during the sales cycle be the same team performing the configuration and implementation?	The implementation team is offshore/third-party with no prior involvement in the RFP phase.

For organizations implementing SimCorp One specifically, our architecture consultants can help validate vendor proposals against operational requirements. Learn more about our SimCorp expertise.

Mitigating Incentive Misalignment

To ensure your success is the vendor's success, consider these three contractual levers:

1. The Discovery Gate: Use a short-term T&M contract for the initial deep-dive discovery phase. Use the outcomes of this phase to define a more accurate Fixed Price for the main implementation, reducing the risk of scope shock.

2. Retention Payments: Withhold a final percentage (e.g., 10–20%) of the total project fee until 90 days after go-live. This ensures the vendor remains motivated to resolve post-production issues.

3. Shared Governance: Mandate that the vendor's Project Manager participates in your internal decisions and escalation paths. This makes them an active stakeholder in your internal project health, not just a service provider.

Balanced Delivery & Value Realisation

To ensure a successful transformation, the contract should move beyond a simple buyer vs. seller dynamic. A high-functioning project relies on a value creation incentive framework where risk is shared, and payments are tied to the incremental delivery of usable functionality rather than a single big bang go-live.

Incremental Acceptance Criteria’s

Instead of a single final acceptance criteria, the project should be sliced into manageable, functional deliverables with related project milestones. This allows the vendor to receive payment for proven progress and ensures the client realises value throughout the project.

Draft Clause: Phased Acceptance and Progress Payments

No project milestone shall be deemed complete, until the specific deliverable satisfies the following criteria. Upon client verification and acceptance, a pro-rata payment shall be released to maintain vendor liquidity and project momentum.

1. Functional Alignment: The deliverable performs as documented in the Requirements Traceability Matrix, with no "Critical" or "High" severity defects outstanding.

2. Data & Configuration: All data required for that specific deliverable is successfully mapped, loaded, and reconciled.

3. Quality Assurance: The deliverable has passed all testing phases for its specific scope and demonstrates successful integration with existing systems.

4. Operational Readiness: System configuration and workflows have been documented and handed over and accepted by the client owners. User training has been completed.

5. Formal Sign-off: Written sign-off by the client business owner for the specific milestone, confirming the deliverable is accepted and matches the agreed-upon functional specifications .

Client Performance Obligations

To maintain project momentum and ensure the vendor can meet the agreed upon acceptance criteria’s, the client should commit to likewise appropriate obligations. Failure to meet these obligations in a timely manner may grant the vendor reasonable extensions to their delivery timelines.

• Timely Information Delivery: Provide all necessary data sets, business requirements, system access etc. within the agreed-upon project timelines to ensure the vendor’s deliverable is not delayed.

• Availability of Subject Matter Experts (SMEs): Ensure that key decision-makers and business owners are available for workshops and validation sessions as scheduled in the project plan. If a decision is not made within the agreed timeline, the vendor can’t be held liable for subsequent delays.

• Expedited Review Cycles: Commit to reviewing deliverables and providing feedback or sign-offs within a reasonable, predefined window (e.g., 5 business days) to avoid holding back subsequent delivery phases.

• Active UAT Participation: Dedicate the required staff to all testing cycles. The client acknowledges the "End-to-End Validation" milestone is a joint responsibility.

2. Target Operating Model & Ownership Governance

Implementing an investment management system is not merely a technical upgrade; it is a compelling event for organisational change. A robust Target Operating Model (TOM) must define how technology, processes, and people interact to support the investment lifecycle, but it must first address a fundamental strategic question: Are we replicating the past or architecting for the future?

Three main decision points will need to be addressed up front:

The Strategy: Like-for-Like replacement vs. Value-Driven Transformation

Before deciding on vendors, systems, hosting etc. the organisation must first align on its transformational ambition and goals. The most critical, and often overlooked debate, is whether the organisation is simply replacing a system or evolving its way of working.

• Like-for-Like Replacement: This approach attempts to replicate existing processes within the new system to minimize immediate disruption. While it may feel safer, it often results in low value realisation. Forcing a modern system to behave like a legacy one creates a technical debt and process friction that is far more expensive to fix post-implementation.

• Value-Driven Transformation: This approach starts by asking how the new system’s native capabilities can optimise the way the organisation works. This often requires a willingness to adapt organisational structures and internal workflows to align with the industry best practice embedded in the system solutions.

The Architecture: Centralisation vs. Flexibility

Once the strategic intent is set, the primary architectural consideration for the operating model is the balance between integration and specialisation:

• Front-to-Back (Golden Source): A unified model where single data sets and processes are seamlessly unified across front, middle, and back-office operations. This reduces reconciliation overhead but may require compromises on niche functional requirements.

• Best-of-Breed: Integrating specialised vendor systems for specific functions across the organisation. This offers a high degree of flexibility and possible added business value at the cost of increased integration complexity and vendor management.

The Delivery: Resourcing & Infrastructure

The final crossroad determines who manages the system and hosting options:

• Infrastructure: Deciding between cloud-native (SaaS) or on-premise solutions.

• Human Capital: Determining whether to build and develop deep system knowledge and expertise in-house or rely on managed services to support the investment lifecycle.

Implementation Pillars

Furthermore, the framework should incorporate a structured hierarchy for decisions and escalation paths to resolve technical bottlenecks or functional misalignments quickly. By formalising who holds the authority to approve configuration changes and who is responsible for data accuracy, firms can ensure that the system remains a single version of truth scalable with the business evolution.

Ownership Governance

A successful transition hinges on establishing definitive ownership of data vs. configuration and sign-off. Without clear accountability for these pillars, the system risks becoming a repository of inconsistent information or misaligned settings. This dynamic creates a fundamental interdependency trap where the vendor is responsible for the configuration (the engine), while the client owns the data (the fuel). While this division of labour seems logical on paper, it often becomes the primary source of project friction during the implementation.

The Interdependency: Configuration vs. Data Ownership

In a standard implementation, the vendor is often considered the owner of the configuration, responsible for ensuring the system architecture, workflows, and parameter settings align with the agreed-upon design. On the other hand, the client is the owner of all data, responsible for the extraction, cleansing, and provision of the firm’s proprietary information. The conflict arises because these two elements are functionally inseparable; a sophisticated trade-routing configuration is useless, and untestable, if the client's security master data, holdings or market data is missing or incorrectly formatted.

Common Conflicts and Shortcomings

Conflict Scenario	Vendor Perspective	Client Perspective
The "Empty Shell" Problem	"We have configured the system to your specs, but we cannot demonstrate it because your data isn't ready."	"We can’t validate the configuration until we see our actual portfolio data flowing through it."
Data Latency	"Delayed data delivery has caused project setbacks. We need to address possible compensation for standby hours."	"The vendor's data requirements were poorly defined or provided too late in the cycle."
The "Bad Input" Loop	"The system is broken because the data input is malformed. This is a client issue."	"The system configuration should be robust enough to handle or flag these data exceptions."

Resolving the Deadlock

When data is unavailable or lagging, the project risks a complete standstill. Successful implementations use the following strategies to bridge the gap:

• Mock-up Data Sets: To keep configuration work moving forward, the vendor should provide mock-up data set templates allowing the configuration to be built and smoke-tested in a sandbox environment while the client continues their data cleansing. If the vendor does not have such readily available, Dimensional Community consultants can assist clients providing mock up data readily available in the correct format and mapping for the vendor to utilise.

• Data Readiness Assessment: Before the vendor begins high-cost configuration phases the client should prove a subset of data is ready for consumption to avoid the vendor having to wait for files to be ready.

• The Joint Lab Approach: Instead of working in silos, a Joint Lab environment can be established where the vendor’s configuration experts and the client’s data stewards work side-by-side. If a workflow fails, they determine in real-time if it’s a setup error or a data anomaly, bypassing the formal (and often slow) escalation process. As discussed in the Change Management section separately, Dimensional Community consultants can add significant value to this process acting as an independent advisor to the client providing the technical authority required to challenge vendor assumptions and safeguard the client’s long-term operating model.

• Contractual "Minimum Viable Data": The SOW should define the "Minimum Viable Data" required for the vendor to meet the agreed upon acceptance criteria's. If the client fails to provide this, the vendor is protected from liquidated damages; conversely, if the data is provided but the configuration fails, the vendor remains accountable.

3. Project Management Office

As the illustration below demonstrates, the Project Management Office (PMO) encompasses too many disciplines to cover comprehensively here, so we will limit this to highlight only a few disciplines which experience has shown impact projects positively.

Of the nine disciplines illustrated, Change Management is covered as a separate topic, so this section will address the following:

• Progress and Benefits Tracking

• Communication Management

• Issue tracking

• Risk Management

Progress and Benefits Tracking

This section covers the process of monitoring and measuring project advancement towards defined goals.

To ensure transparency and maintain momentum, the PMO should implement a data driven tracking layer translating raw activity into strategic insight. This process begins with real-time monitoring via program dashboards e.g., in JIRA or ADO, capturing granular progress on sprints, burn-down rates, and milestone completion.

However, technical delivery is only half the equation; the PMO should also manage a robust Benefits and KPI Framework to measure the transformation's impact on operational efficiency, data accuracy, and cost reduction.

These complex metrics are then distilled into executive 1-page status summaries, providing leadership with a high-level view of project health, critical risks, and budget utilization. This tiered approach ensures stakeholders at every level remain aligned on whether the system replacement is delivering its promised commercial and functional value.

Communication Management

At a high level, communication management is the strategic planning and execution of information sharing ensuring effective collaboration and stakeholder engagement.

To drive a successful transformation, Communication Management should move beyond ad-hoc updates to become a structured process for strategic alignment. This is best achieved by developing a Stakeholder Matrix, which categorises individuals and groups based on their influence and interest in the project, ensuring that communication is precisely calibrated rather than one size fits all.

This matrix feeds directly into a comprehensive Stakeholder Engagement Plan, a roadmap that outlines the frequency, tone and channels of information sharing. By formalizing these touchpoints, the project team ensures that key decision makers remain invested, potential resistors are proactively managed, and the right information reaches the right people at the right time - transforming passive recipients into active collaborators.

To execute this strategy effectively, the PMO can utilise these two primary tools to bridge the gap between planning and execution:

• The Stakeholder Matrix: A diagnostic tool used to map the landscape of the organization. It identifies Champions who can drive peer-to-peer adoption and High-Influence Blockers who require targeted, one-on-one engagement to mitigate risks to the project timeline.

• The Engagement Plan: A tactical execution schedule that defines the "how" and "when." It ensures that strategic planning isn't lost in the noise of daily operations by setting clear expectations for collaboration, such as monthly steering sessions for executives and frequently visibly walking the floor for end-users.

Issue Tracking

The systematic process of identifying, analysing, and resolving issues to achieve desired outcomes is critical for the success of any transformation project.

To maintain project velocity the PMO should move beyond static lists and adopt dynamic issue tracking methodologies, e.g. by capturing these in JIRA. By utilising burn charts, the project team can visualise the rate at which defects and obstacles are being resolved compared to the rate at which they are being raised. This real-time visibility allows the Change Advisory Board (CAB) and project leads to monitor critical metrics such as the delta between open and closed issues since the last checkpoint.

By categorising issues by priority and identifying specific blockers, the team can focus resources on high-impact issues threatening the critical path, ensuring technical friction is resolved before it compounds into a timeline delay.

To ensure issue tracking leads to action rather than just data, the PMO facilitates a daily triage session going through all open issues ensuring traction is maintained, owners are held responsible for resolving issues and determine if business owners need to be consulted for any blockers. This ensures the technical resolution of issues is always aligned with the business's operational priorities.

Risk Management

In this context, risk management refers to proactive identification, assessment, and mitigation of potential risks which could impact the project, short- or long-term.

To safeguard the transformation from unexpected risks, the project needs proactive Risk Management. This involves the continuous identification and assessment of threats before they materialise into project stopping issues. By applying a structured Risk Framework, each identified risk is scored based on its probability of occurrence and its potential impact on the project’s timeline, budget, and quality.

These scores are then visualised in a Risk Heat Map, providing the Steering Committee with an immediate, intuitive view of where the most significant threats lie. This strategic visibility allows leadership to prioritize mitigation efforts and allocate contingency reserves where they are needed most, ensuring the project remains resilient in the face of complexity.

Strategic Mitigation: The Path to Green

For every risk identified in the Critical (Red) quadrant of the heat map, the PMO requires a documented mitigation plan. This plan outlines the specific triggers which will activate a contingency response and the Path to Green - a set of measurable actions designed to reduce the risk's severity. This level of rigor ensures that risk management is not just a reporting exercise, but a core component of the project's strategic execution.

To learn more about how Dimensional Community supports Project Management Offices, check out our case study on our website.

4. Change Management

Effective Change Management is the bridge between a technically functional system and a successful business transformation. Without a structured approach to the human element, even the most advanced investment management system risks low adoption or operational workarounds.

Principles of Transformation Change Management

A successful transformation relies on transparent stakeholder communication flows that move beyond simple status updates to provide “What It Means for Me” clarity at every level of the firm.

This is anchored by a Change Advisory Board (CAB), which serves as the formal gatekeeper for all system and process modifications. The CAB ensures changes are vetted for cross-departmental impact preventing a fix for one business team from inadvertently breaking a process somewhere else.

Crucially, managing resistance to change requires a proactive rather than reactive stance; identifying change champions early can help neutralize scepticism. This effort must be backed by visible and active executive sponsorship support, where leaders don't just approve budgets but actively communicate the vision and reinforce the value of change. When project bottlenecks or cultural friction arise, a clear path from the project team to the executive sponsors ensures that roadblocks are cleared with the necessary authority to maintain momentum.

Bridging the Incentive Gap

Managing change at the intersection of vendor and client interests requires a clear distinction between product defects and scope evolution. The primary tension arises because a vendor is incentivised to categorise every request as a change request i.e. billable, while the client views them as in-scope functional gaps expecting them to be covered under the original scope and cost.

To manage this, the Change Advisory Board (CAB) must include a technical architect from both the client and the vendor to provide a Technical Arbitration layer. The goal is to move away from a zero-sum game where one party loses financially. By establishing a pre-agreed Escalation Procedure for commercial disputes, you prevent technical progress from stalling while the procurement teams argue over who pays for the work.

When internal teams lack the specialised skillsets required to oversee complex system transformations, utilising external competencies from Dimensional Community serves as a vital bridge between vendor system capabilities and the client’s operational reality. Dimensional Community consultants act as a neutral system and solution architect, possessing deep platform-specific knowledge such as in SimCorp One while remaining independent of vendor sales incentives. By operating at the intersection of business and technology, we help translate high-level user requirements into robust business workflows, ensuring the system is configured to solve actual operational challenges. This expertise is particularly critical in Change Advisory Board (CAB) settings, where the consultant provides the technical authority needed to collaborate with vendors in validating design decisions and ensuring alignment with the client's long-term operating model.

To learn more about how our Solution Architect service can support your SimCorp One implementation, visit our website.

Managing "Who Pays?" – Strategic Principles

Scenario	Typical Incentive Misalignment	Resolution Strategy
Defect vs. Scope change	Vendor claims it is a new requirement; Client claims the system doesn’t work.	Reference the agreed upon acceptance criteria's. If the functional requirement or workflow was in the original RFP/SOW and doesn't work, it is a defect i.e. the vendor pays.
Delivery Reality Shift	The vendor underestimated the complexity of your data; they want more T&M hours.	Utilise a Contingency Reserve pre-negotiated in the contract for joint discovery issues.
Executive Sponsorship	The project is delayed; Vendor wants to charge for idle time.	Executive Sponsors from both sides must meet to trade-off: e.g., vendor waives fees in exchange for a high-profile case study/reference.

The "Cost of Change" Escalation Path

When a change is identified, the following flow should determine the financial responsibility:

1. Categorization: The project team classifies the change: Regulatory Mandatory, Business Value Add, or Technical Debt.

2. Commercial Impact Assessment: The vendor provides a quote (T&M) or confirms it's within the Fixed Price scope.

3. The "Value Lever" Discussion: If the vendor is charging, the Client Business Owner must decide: "Does the ROI of this change exceed the cost, or can we revert to the Target Operating Model (TOM) standard?"

4. Executive Escalation: If the parties disagree on the Defect vs. Feature status, the issue is escalated to the Steering Committee. Here, the Executive Sponsor uses their relationship with the vendor’s leadership to seek a Commercial Compromise e.g., 50/50 cost split to maintain project momentum.

What's Next?

Successfully replacing a legacy investment management system begins long before the first piece of configuration is delivered. By establishing a robust vendor strategy, defining clear ownership governance, implementing rigorous project management disciplines, and proactively managing change, you establish the foundation for a transformation delivering lasting value, not just a technical go-live.

In Part 2 of this series, we will shift our focus to the implementation phase itself, testing frameworks, and how to navigate the complexities of designing and building your target operating model in practice.

Ready to discuss your transformation journey? Dimensional Community's consultants bring over 25 years of implementation experience to help you navigate every phase of your investment management system transformation. Contact us today to learn how we can support your project from strategy through to operational excellence.