Bookrunner v. 11 Ready for Prime Time
DISCLAIMER: This article first appeared in the Sept. 2006 issue of The Risk Desk, and is reprinted with the permission of Scudder Publishing Group, LLC www.scudderpublishing.com.
“The changes in regulatory compliance have led our customers to tighten up their internal procedures a lot more than in the past. The middle office has started to push a lot of work out to the traders, who are getting much more involved in putting their deals into the system. Therefore they need a lot more feedback from the system, so they can manage their trades appropriately.” So says Brian Nicholson , services and implementation director at RiskAdvisory. He’s explaining how, after 10 years and 10 versions, RiskAdvisory’s newest version of its ETRM solution, Bookrunner v. 11, has been something of an overhaul of the entire product.
When RiskAdvisory ramps up a new release, it’s all about listening to the customers, literally. The company holds an annual product development strategy to brainstorm with its Bookrunner user groups, basically plotting its strategy with existing customers. Then it watches the market, taps prospective clients for feedback and hones in on internal business strategies to cement the direction of the latest version. The result this year is Bookrunner v. 11, which among other things liberates the application from the client-server platform onto the Web-enabled Oracle 10g as a way to accommodate an increasing mobile workforce.
Bookrunner is trying to be both a trader tool, capturing physical and financial trades at the front end, and a risk-management tool that runs those trades through risk analytics and generates reports at the back end. These days, the application has to appeal to traders who are being forced to get more involved with the software that they probably want to be. That means Bookrunner has “much more front-end spice,” Nicholson says, “so the traders will buy into getting the trades in there and then providing limits management and better reporting just for the traders.”
What kind of bells and whistles? Traders are used to spreadsheets, so Bookrunner’s front end has a bit more of that look. Traders also have much tighter VaR and mark-to-market limits now, so they have to have stronger limits management. “When the middle office says you’ve exceeded your limits, they’ve got to be able to say here’s where we’re at, here’s where the strategy’s going forward. They can put in ‘what if’ deals to see where it would reduce their overall exposure to the market. Traders are getting a lot more proactive, getting deals into the system and using that as their main tool rather than just spreadsheets. They’ve got internal compliance issues and they have to have documented it all the way through. They can’t just have it in a spreadsheet then dump a ticket off to an assistant to input it. They’ve got to be approving it all along the way.”
But traders aren’t the type to go in and play around with a risk-management system, so it has to be quick and easy. Traders make money on the phone, not fiddling around with a computer system, and they need feedback very quickly so they can see where they’re sitting in the marketplace and react accordingly. “They’ve got to get in, get out and get back on the phone. So they need a system that’s very responsive to what they need. And flexible, because each trader likes to look at it a different way.” Bookrunner v. 11 allows traders to tailor their entire desktop to include price feeds, graphs showing MtM and so on. “Dashboard is the wrong term. In SAS, now we’re calling them data portals – you’ve got a lot of things coming on your desktop at once. Traders usually have three or four monitors running all kinds of things; we’re trying to tie into that framework and make it seamlessly interact with other applications and price feeds,” he says.
With tighter compliance requirements under Sarbox, the new version of Bookrunner also needed to have much stronger reporting tools. Here RiskAdvisory looked at integrating the data warehousing and analytics products from its parent company, SAS. Using Oracle 10g is the first step toward a full Java front end, which will enable integration of these SAS tools. So far, the company has linked Bookrunner with the SAS Risk Dimensions tool, a high-end analytics simulation and pricing engine. In this formation, Bookrunner becomes the trade capture tool and the data is fed to Risk Dimensions, which spits out all kinds of analytics. “We use it for simulation engines. The reason is the optionality in the marketplace these days. They’re using more and more options, so they want a simulation-based VaR number. We use SAS analytics tools for that.”
Risk Advisory has also begun to link up with SAS’s business intelligence tools rather than driving data through standard Oracle reports. “The more we can make the front end look seamless, it becomes a whole portfolio applications server. That’s where we’re trying to take Bookrunner so we can tie into all the other tools that SAS can provide.”
Customers are asking for stronger credit risk analytics, and they also want the collateral management side beefed up in a big way. Bookrunner v. 11 has modules for both. “We’re trying to move into the realm of Raft and Rome , providing more functionality to compete with (their solutions) so we can have more of an end-to-end risk-management system,” he says.
“An additional benefit to providing a Web-enabled environment is that it’s much easier for technology groups to work with. It’s easier for the IT group to upgrade the system, putting it on the server and pushing it out to their client base,” he says. Existing Bookrunner clients need to install a full upgrade, so RiskAdvisory started contacting clients in February and working with them on the switch from client-server to the new Oracle applications server architecture. “It’s not a quick switchover,” he says. “But IT guys in general are pushing this forward because they want to get on the newest versions of the Oracle platform and stay as current as they can. And they’re always pushing us to stay even more current.”
RiskAdvisory is Canadian-born and it’s got a strong client base there, but since it was acquired by SAS in 2003, the company has been working with the SAS sales team in the US market. “We’ve have some good success in that market in the last year,” Nicholson says. “I wouldn’t say the purse strings are loosening up, but the requirement for the middle-office tools are getting stronger, not just in the top-tier companies but in the middle-tier as well. We’ve got a good price for smaller companies that have maybe two or three users.”