Suresh Kumar- CIO Pershing
Date: Wednesday , December 28, 2005
“Existence of information technology is to serve the business; if it can solve business problems then the work is done,” says Suresh Kumar, Chief Information Officer of Pershing LLC. Blending the usual formula of business and technology, Jersey City, N.J. based Pershing provides online securities trading, clearing, information management, financial products and services.
Though the company is not a pure play software developer, it works on platforms of other companies to develop applications. Pershing has adopted various technologies to improve the online trading experience, but being a technology-oriented firm, the most important challenge was to deliver products and services by leveraging technology at optimal costs, Kumar says.
In 2002, the company’s technical expenses were at 42 percent of its total revenue, which was brought down to 30 percent in 2005. The company struggled to diminish these expenses along with the dotcom bust. “One of the challenges that we faced was to reduce our technical expense and convert our fixed expenses into variable expenses to bring the cost down,” he added.
To shrink the technical expenses Pershing adopted methods of delivering innovative technology at an optimal cost. These efforts have proved fruitful when it won the best-practice award from Technology Managers Forum in the category of “technology innovation” in the year 2005. They bagged the award for their “ResetExpress,” which was designed to automate the process of password reset using biometric authentication via telephone. In 2003, Pershing secured first place in the “project management category” under the banner of same forum. Here the idea was to put multiple management metrics into one place, which was tracked with multiple tools. Besides using multiple tools in processes, it also deals in strong architecture background.
Service oriented architecture, which is now in high demand, had already been adopted by the firm in late 80s as message oriented architecture, says Kumar.
Founded in 1988, with a clear focus to innovate, Pershing, a division of Donaldson, Lufkin & Jenrette Securities Corporation, was the first online broker, before the Internet brought online trading. Kumar says, “We were the pioneers in offering services on Internet in 1995. And were the first to allow customers to open an account online and start trading up to $25,000 without having money in their account.” During 1995-96, when most online service providers were using HTML, Pershing chose to work on Windows based Application on Internet, which delivered fabulous results and the company closed about 35 percent of the trade online.
At present, Pershing is developing a product called “Service Center,” a single platform that can handle multiple services for clients. According to Kumar, the whole idea behind creating this feature was to receive various types of requests from customers and pass them to different business areas within Pershing to improve processing efficiency to provide better solutions. “By coupling business with technology, we created “Rapid From” facility which has enabled us to create an infrastructure that can provide better service, transparency, accountability, and service-level measurements to about 300 different services in a short period of time through a single portal,” he added.
Besides, Pershing is also working on another project called ‘Aims,’ where the company is re-engineering existing transactions so that the firm can try to process transactions straight through as much as possible. By working on this it generates an infrastructure of common components such as route engine, workflow and activity engine. “This allows a person to get all those information which is required to complete a transaction,” says Kumar.
Most products used by Pershing are based on in house technology. It gives an added advantage to the customers, as regulation changes pace; most financial service firms’ cannot afford the cost, while Pershing can glide into the new mode with ease. Kumar says, “This provides an important value proposition for our customers that they don’t have to focus as much on their technology investments because, we are here for them.” The company is also in the process of applying Linux based applications. But also emphasizes on the importance of correct licensing and support for a product and application.
With a global presence, Pershing hopes to maintain the same set of processes, mechanisms and quality to develop software. Quality being a key driving force for Pershing, it is very unique for an information technology division to track CMM Level Certification.
Pershing has been awarded with CMM level 5 certification including its Indian arm iNautix Technology India Private Limited. Kumar feels, getting quality certification works as a motivating factor.
CMM Level is not just for developing software but also for evaluating the unique process. This has marked an increase in the company’s productivity by three times in terms of cost on development side. “If you have industry frame work such as CMM and ITIL, it gives lot of support and helps in attracting good talent to the organization,” says Kumar.
Pershing forayed in to the Indian market by setting up iNautix Technology, in the year 2000, based in Chennai. The target was to find a space in the dotcom arena and hire quality talent available in India. With the unit in India, Pershing is at an advantage with talented staff that works 24/7 along with cost advantages. Kumar feels, “If we figure out how to solve a problem, increase revenue, improve productivity and reduce technical cost, that is the value that a business is looking at from technology.”
And if an organization is moving to a developing market to fulfill theses objectives then it is very much essential to have long-term strategic objectives. The objective, which works on basic fundamental of a business, is to prepare for failure. Even Pershing had faced few failures; they launched few services, which is out of the ground now.
Kumar says, “It is not necessary that every thing we do should turn to be a great success, but, taking risks, is the only way to succeed.”