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Posted 25th January 2017 by Lawrence McCrossen

You want to build software for your portfolio/risk management, compliance, market making or perhaps investment/operations reconciliation. So you design, plan, build and you’re done, just like building a house, right? 

I used to hear this a lot from our clients in the Finance Industry, although not so much these days since Agile has become more popular.

So why isn’t it the same? Why can’t we make accurate plans the same way they do in the building industry? 

Building a House

Leaving aside the fact that building construction doesn’t always go to plan either, there are some key differences, in reverse order of importance:

Number 5…

For larger, longer projects, such as major portfolio management or risk systems, business requirements may change under one’s feet. That doesn’t happen so fast with buildings, and if it does it’s too late to change anyway!

Number 4…

It’s generally easier and cheaper to change software than it is hardware – so people do change it! There’s an expectation that things such as security types compliance rules will be added and altered because it can be.

Number 3…

Technology changes fast in the world of software, and that can lead to uncertainty in development timelines as unexpected issues arise. The finance industry is subject to rapid change too, in as markets evolve and regulations are adjusted (normally tightened).

Number 2…

It’s extremely difficult to envisage the entire system behaviour up-front, there are so many degrees of freedom, if not infinite for even a small sized system. This is particularly the case if current operational processes within a financial services organisation are being reconsidered as part of the project. Houses tend to be more straightforward functionally. This is of course a key reason why Agile methods are popular.

And the Number 1 Reason building software is not like building a house…

Software systems are often unique, and being designed for the very first time, more like new type of building than a new construction which is a variation on something previously built. Many financial systems are available off-the-shelf, so if a fund manager, trading operation or bank is building a bespoke system, it is because their processes, trading or risk management is proprietary and by definition the system has not been seen before.

If you'd like to discuss your software development options with The Bridge at no cost or obligation, feel free to call Lawrence on 02 9993 3300 or email lawrence@thebridgedigital.com.au