The group -- spawned by a merger between Challenger International and Packer-owned Consolidated Press Holdings (CPH) Investment Corp -- is ending its reliance on dominant financial management software provider DST Systems in what appears to be a move to gain tighter control over its core business processes.
Challenger, which administers an investment pool estimated to be valued at over AU$10 billion, currently uses DST Systems' HiPortfolio software for its funds management and portfolio administration functions through an outsourced provider.
The financial services provider now wants to bring those functions in-house under a new system, SimCorp Dimension.
Speaking guardedly about the changeover late last week, Challenger's technology chief Derek Goh, said the new system had been chosen after a four month evaluation process that included consideration of the group's strategy for the next two years.
"SimCorp Dimensions system enables [funds management and portfolio administration] business process to be brought in-house so that it provides better control and ownership of these businesses which challenger perceived as integrated part of its core competencies required to facilitate new product initiatives," Said Goh.
Goh Said that Challenger had already carried out proof-of-concept testing for the SimCorp software and was currently implementing the new system.
Bruce Wood, managing director, SimCorp Asia said that the system would initially be tested one or two funds before being sent live in November.
While the decision to drop DST Systems may be received as an unusual step for Challenger the win has a complementary significance. Goh concedes that both the decision to in-source and move away from the financial software market-incumbent runs against industry trends. For SimCorp Challenger represents its first significant customer win since in the Asia-Pacific since it opened its office here in April 2001.
According to SimCorp's Wood, DST Systems is a quasi industry standard with, an 85 percent share of the local market and large pool of IT professionals trained in its products.
"Being the new guys come into the market it's quite difficult to get people to change their system which is really the core system for their business," said Wood.
SimCorp believes that its single-database strategy is Dimension's key selling point. Wood argues that it cuts down data-entry time and improves transaction consistency. Challenger's system will run off a single Oracle database with Windows XP clients.
