Indata is not easy to place in the bifurcated world of buyside trade order management.
Is it a soup-to-nuts vendor, such as Advent and SS&C with their comprehensive offerings for every facet of the small money manager's business? Or does it inhabit the high-end with Charles River, Eze Castle and Macgregor, with their single-minded devotion to robust and elaborate order management systems?
Dave Csiki, a managing director with Greenwich, Conn.-based Indata, says the firm straddles both worlds. It makes the short list when a buyside shop wants a top-of-the-line OMS, but is also determined to sell systems to other parts of the organization.
These days, Csiki's on the road promoting a new customer relationship module. It's for anyone within the money management firm with client contact. That leaves out most traders, but reflects the vendor's belief that the trading room is just one part of the front office.'
It also reflects Indata's belief that most order management systems are functionally similar. It is broadening its offering to stand out from the pack. That pack consists of some ten vendors. The new module brings to three the number of systems Indata sells to the money manager's front office.
Its Precision Trading OMS has been around since 1993 while its performance measurement system was the basis for the company's inception in 1968.
Csiki, who has been with Indata for five years, works out of the firm's San Diego office. Traders Magazine technology editor Peter Chapman put these questions to him about INDATA.
Traders: Why buy OMS technology from Indata? What makes you different?
Csiki: That's a good point. Among the top OMS vendors, the functionality is roughly equivalent. People buy our system because they are looking down the line at more seamless integration by using Indata for other functions.
Traders: That's what you call internal straight-through processing?'
Csiki: Right. The seamless sharing of data among the systems that money management firms use to run their business.
Traders: And you do that differently than your competitors?
Csiki: Yes. To the best of our knowledge, we are the only vendor with one common [Microsoft] SQL Server database that is updated by various application modules. For example, once a trader executes a trade in the OMS, it is updated to the same table in the database that is used by the INDATA portfolio accounting system.
Traders: The two systems share the same database?
Csiki: Yes.
Traders: How is that better than what's out there?
Csiki: Most systems that pass data back and forth use the batch' method or expensive middleware. After a trade is done, the information travels to a directory somewhere as a batch file. Then the back-office person imports it. The problem with batch files and data-sharing is that errors kick out because of differences between the way the accounting system and the OMS work. With Indata, we have one database which virtually eliminates the potential for errors.
Traders: Batch processing is the industry standard?
Csiki: Right. Most money managers have more than one application and database for accounting, portfolio management and trading. They pass batch files back and forth.
Traders: In order for this scheme to work, then, the buyside shop needs to purchase your accounting system as well.
Csiki: Yes, if they are looking for a complete solution.
Traders: And presumably your new CRM also works off the same SQL Server.
Csiki: Correct.
Traders: Why do they need a CRM application?
Csiki: Most money managers lack the systems capability necessary to track their interaction with customers. A CRM helps them to differentiate their level of service. That's especially important right now when everyone's performance is not so great.
Traders: What does it do?
Csiki: It gives them a customer's information right at their fingertips in real time. And because it is accessible over the Web, they can call it up right in a customer's office during a presentation, for example.
Traders: I gather market forces played a part in your launch of the CRM as well.
Csiki: The driving force in the market today is firms managing less than $5 billion in assets. Someone with $2 billion in assets will not be able to foot a $500,000 bill for just an OMS. That's the going rate for a lot of the larger vendor solutions. It's a big upfront investment. So, we're trying to offer ancillary products and services that add value to the money manager's operations.
Traders: Those small firms have generally drifted to the soup-to-nuts vendors for inexpensive technology. Can you compete?
Csiki: Actually, a big part of our business is the people using one of those products. They might not be entirely happy with the limited functionality and legacy technology. They are looking to other vendors like the Merrins, Charles Rivers and INDATA.
Traders: Finally, you are unusual in your industry in that you run a small agency brokerage. It's based in Greenwich and it's called Gordon Haskett. Why do this?
Csiki: It largely services the soft dollar needs of our clients – for those clients that use commission dollars.
Traders: So the customer executes a trade through you and you earmark a portion of the commission towards payment of the OMS?
Csiki: That's right. Some clients want to pay part of their bill in commission dollars. Gordon Haskett provides a better conversion ratio to INDATA clients than they might get from their existing brokers, usually one-to-one.
Traders: Interesting. Thanks for your time.
