Client Transitions / Data Migration
Business and technology drivers can require an organisation to migrate their core banking applications and data processing from one set of systems to another. Examples include mergers and acquisitions, divestitures, regulatory mandates, decommissioning outdated systems, or leveraging new technologies such as cloud computing solutions. Where transitions are a necessity, the process can offer the opportunity for an organisation to enhance the quality of service that it provides to its clients and, in turn, help secure a competitive advantage. However, extensive delays and/or implementation failures run the risk of incurring cost overruns, reputational damage, regulatory scrutiny and potentially a loss of business. As such, thorough planning and careful management of potential disruptive hurdles is paramount when undertaking client transitions.
New Link Consulting (NLC) has a proven track record in enabling global financial institutions to migrate client data between systems and data stores whilst ensuring minimal disruption to services delivered. The following insights outline our accumulated experience in some of the key elements necessary to navigate client migrations successfully.
Understanding Business Objectives and Client Imperatives
Initiation activities relate to understanding the drivers for change and what the organisation is looking to achieve when the programme has completed. This is often best achieved by investing time upfront to determine a thorough set of design principles which align with the underlying business drivers. In complex change initiatives like client transitions this can be used to develop a comprehensive request for proposal (RFP) and assessment framework to score shortlisted vendors on their responses.
RFP criteria can include factors such as:
- Does the system cover all of the functionality required to provide quality services to clients?
- Can the system support operational efficiency improvements, such as improved automation and STP rates?
- Is the target system incumbent within the organisation and on the strategic roadmap for future architecture?
- What are the systems capabilities and how does this compare to other, similar systems in the industry?
- Is the system provided by a vendor and, if so, how does the development model work. How easy or streamlined is customization?
- How resilient is the application and does the application have a proven track record of system uptime?
- Consideration of the pricing model to support, maintain and develop the application.
Based on the number of vendors and complexity of the applications it may be required to run multiple rounds of scoring. As an example, it is common that only subset of the vendors receiving the RFP will be invited to provide a demo.
Key Client & Business Considerations
Changing platforms can be a considerable disruptor for a business to absorb and could potentially have wide ranging consequences, not only within the organisation, but also for clients as well. The programme must provide holistic outreach to all the stakeholders impacted to understand and overcome the common hurdles such as:
- Communication strategy including scheduling transitions and client readiness.
- Critical business periods and times to avoid for the client and internal business.
- Readiness of the business including complexity of an interim operating model during transitions and available capacity.
- Sufficient SME support whilst ensuring minimal disruption to BAU.
Skilled negotiation is required amongst all the actors affected by the change to arrive at the best approach and build strong relationships. Success will greatly depend on this process to secure buy-in from all levels of the organisation.
Target System Assessment & Planning
Once the target system has been determined, a key activity is to assess the systems capabilities. This exercise should build a clear picture of the baseline functionality required to support services to clients. This may differ between clients depending on the relative service levels that they receive. Where the target system is deficient, a solution will be required to either provide the service in an alternative way or develop the enhancement.
Planning client transitions will establish the sequence and timelines for clients to move across based on their required functionality. The client is eligible to move once all their services have been delivered in the target system. Moving the simplest clients with the lowest volumes of activity first will mitigate risk during the early events and establish a baseline process to build on. This will also promote confidence helping to maintain support from the organisation.
The diagram below outlines a simplified version of how migrations could be planned following this risk-based approach, making clients eligible to transition when their required services are available on the target system.
Once the functionalities of the target system have been fully defined and necessary enhancements are underway, analysis will be required to determine the mechanism needed to perform the transition. Depending on the volume of data involved, automation may be necessary to achieve migrations within the required timeframes. It also provides benefits by reducing operational risk and simplifies the process by creating a repeatable sequence of tasks.
Often manual entry can only go so far before the risk of error and bottlenecks within data teams entering large amounts of data into the target system are deemed too great. As such, it is beneficial to assess the time and effort to deliver automation and compare with the effort to key the data manually. This undertaking should also include consideration of the projected tranche that the automation will be required by, as with a risk-based approach it may not be necessary to have all automation available for the first migration.
To realise the benefits of automation, it is common for data cleansing to be performed in order to ‘fit’ data between systems. This can offer additional benefits in terms of improved data quality; however, the client transition project should not be seen as the solution to fix all data related issues within the organisation. NLC can work with the organisation to identify areas for improvement regarding data quality and data governance.
The diagram below shows the key areas required for automation of data transfer:
data from the legacy system
- Can be as simple as utilising pre-existing reports that operational areas use on daily basis.
- In more complex scenarios can involve bespoke builds from underlying database or data lake.
- Target system approach used by focusing on what the target system needs in order to operate, instead of what the legacy system has available.
- When legacy system does not have all of the data needed by the target system then other sources may need to be considered to enrich the available data.
data into the format which is acceptable to target system
- Ideally process is simple and the target system behaves in similar way to legacy system, requiring minimal manipulation.
- In reality this is rare and significant analysis and development is required.
- Analysis will include data elements that can be moved like-for-like, fields requiring concatenation, calculated on the fly or even require manual enrichment.
- Should strive for as much automation as possible, however needs to be carefully monitored to ensure the effort to automate does not exceed the manual alternatives.
data into the target system
- It is necessary to consider whether there is an existing procedure for data entry or if the data can be loaded directly into the supporting database.
- It is possible that the data needs to be entered directly into the screen which utilises the system's inbuilt validation protection. If this is the case then possible to utilise keystroke replication techniques to automate the load of significant data volumes.
Static Data vs Dynamic Data vs Reference Data
Different data types will require assessment to confirm the approach to transition.
- Subject to infrequent change.
- Examples include set-up information relating to client accounts, such as client name and account number.
- Often possible to set-up static data in advance of migration, however it is important to have sufficient pre-migration controls to capture any changes between set-up date and live date.
- Subject to frequent change.
- In financial institutions this could be information such as cash balances and security positions.
- The timing of the migration of dynamic data needs to be considered to ensure that up to date data is moved to the target system.
- In many cases dynamic data will need to be moved on the weekend.
- Reference data comes from external sources such as market data.
- If the target system is not set-up to receive this data and is required as part of the future state operating model then it will be necessary to establish the flows to integrate it.
Whilst many of the processes in the old architecture should carry through to the new, given the new system may have many of the same functions, an assessment will be required to confirm whether these are still fit for purpose.
NLC can offer expert knowledge on business process modelling and stakeholder engagement to make this process much more efficient, by assessing:
- Existing processes, procedures, and organisational structure.
- The impact from system changes leading to new model definition.
- Organisational readiness including restructuring, training, and preparation for the transition.
A robust testing strategy must be implemented to verify and assure that the migrations are ready.
The first set of testing involves verifying that the target system can accept the data and confirming the data is suitable for operational use. A more comprehensive ‘day in the life’ test should also be completed with all impacted operational groups to verify the data is fit for purpose against the new operating model. This activity could be completed in conjunction with client testing covered in the client engagement section of this document.
Once confirmed that the target system can accept the data, the execution runbook must be tested with several rehearsals. End-to-end integrated systems environments that are as close as possible to live will improve the integrity of the testing and minimise the risk during the live event. The execution team should be given the opportunity to practice the steps and thorough lessons learnt recorded throughout in order to fix any gaps. The rehearsals will also allow the opportunity to flush live data through the system giving the most comprehensive view of how the new system will react once live.
Controls are essential to ensure the integrity of the transition, providing confidence that the data has been successfully moved in a complete state from source to target systems. If changes in the data are necessary during the transition, then these need to be explained in the output. Reconciliation expertise is required to ensure that a client’s activity prior to the transition matches with the end, including any legitimate differences within the migration process. Where the volume and complexity of the data is considerable, a reconciliation engine should be used to enhance the efficiency of the overall process and provide the information necessary to help explain breaks, which should be presented in a way that remedial action can be easily applied.
Client Engagement including Reporting
Providing transparency is important to make the client’s experience throughout the transition a positive one. A dedicated change team can work with internal client facing managers to ensure the client remains informed about what the transition means for them, including any responsibilities they may have. Whilst all clients are important heightened attention may be required for VIP clients where a hand holding experience is needed. This could also include providing consultants as an independent bridge to work onsite with clients, ensuring they are fully prepared for any changes.
Clients may have data interfaces fully integrated into their own systems, if this is the case or not NLC can review all of the data outputs that will impact the client, providing an impact assessment / remediation plan. You may choose to invest significant effort in making the new outputs consistent or at least compatible with the legacy, or simply advise clients of the changes. If reporting output is going to change the clients may need to be included in development and testing on their side. Scheduling this with many clients could have significant implications on the overall programme timeline which will need to be carefully considered. We can help evaluate these difficult decisions, keeping in mind the investment required to support development but also provide context from a client experience perspective.
Migration Execution includes the preparation activities prior to the migration and coordination of the transition itself. Before a migration can happen all the processes, people, and systems need to be brought together. The goal is to ensure a successful transfer of the data and to bring the organisation back up and running before the next working hours begin, assuming the transition needs to take place ‘out of hours’.
The migration process should be built into a runbook, including all the steps leading up to the migration within the execution window and post migration. People are identified as task owners throughout the organisation in business areas and technology. They will be included in the testing process and confirmed available during the migration window itself. Backups also need to be identified with the knowledge to step in should unforeseen circumstances arise.
There are likely to be many systems involved in the migration beyond the source and target systems. Satellite applications that interact with these source systems will be included in the analysis for data migration, configuration, and transitions during the live event as well. They should be included in the testing and confirmed as available during execution. Often there can be conflicts where these systems are going through their own implementation or maintenance cycles. Coordination expertise is required to bring all of this together. NLC can provide the specialist skills required to coordinate the many moving parts within a migration. Leadership in this space requires the coordinator to know the overall process including the interdependencies between components. They must know where the process can be flexible to keep the process on track have expertise in issue management if unexpected circumstances arise.
Following the completion of a migration there are likely to be several further steps to close out the runbook. For example, in some instances post-migration transfers may be required for some time, and data left behind in the legacy system may still be required for operational reasons. Even though the main section of the migration is finished, focus must be maintained to ensure that these post-migration runback tasks are completed.
In line with these activities the first days the new system is up and running, especially following overnight batch processing, are when the system is most vulnerable. Elevated awareness will be required across the organisation and a team specially tasked with logging, monitoring, and resolving issues must be in place to react quickly to any unexpected system behaviour. Prioritisation should be placed on issues affecting clients and enhanced transparency in place to walk them through anything impacting them.
Very few projects have touchpoints with as many operational processes as a system migration does, which is a great opportunity to install documentation that will enhance efficiency in transformation initiatives going forwards. This includes records relating to business process mapping, data lineage, product taxonomy, client invoicing integrity and more.
Often during a significant migration, a considerable amount of knowledge will be learned about the organisation that should not be lost when the programme is over. The migration will also offer the opportunity for organisational change that can bring significant benefits for ongoing activities. Migration can bring opportunities to rationalise and simplify the business which is effectively reducing complexity and simplifying the operational footprint. NLC can perform a rationalisation of business processes connected to functions impacted by the transition and also assess opportunities for further standardisation & automation.
New Link Consulting Client Transitions / Data Migration Services
NLC provides the following services and brings many years of expertise and demonstratable experience across all of the subjects covered in this document.
- Programme Management, migration strategy, and planning.
- Design, manage and execute the RFP process to establish an appropriate target system in line with business objectives and client imperatives against agreed assessment criteria.
- Requirements gathering, design, development, configuration, and systems testing of enhancements.
- Client assessment of services provided to create a comprehensive plan of transitions against the risk levels of clients.
- Automation of data transfer utilising off-the-shelf technologies or by building a solution from scratch.
- Business process modeling, operating model assessment and remediation, including testing, implementation, training and business readiness.
- Migration execution management: coordinating the activities of all required staff members during pre-migration, the transition event and post migration activities.
- Client engagement and ongoing communications: working with your clients to help them understand the transition, what it means for them, what their participation needs to be, and preparation activities.
- Post-migration validation, management and resolution of issues.
- Comprehensive testing through all phases of the programme.
- Robust reconciliation and controls package to prove a successful transfer.
- Programme legacy review by assessing the deliverables of the programme to implement a maintainable portfolio of resources providing ongoing benefits for future initiatives.
If you would like to find out how we can help you plan, manage and execute your next migration, please contact us for more information on our services or explore https://new-linkconsulting.com/.