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Trading floors need new IT

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Since the JSE adopted SETS – London’s Stock Exchange electronic order book – it has more doubled its trade, showing that technology has an incredible impact on the financial world, writes CHRIS BUCHANAN, Director of Client Solutions at Dell EMC.

In 2002 the Johannesburg Stock Exchange adopted SETS, the London Stock Exchange’s flagship electronic order book. When a 2013 research paper studied the impact of this, it found the JSE was more liquid, had doubled its trade and lowered trading costs. There is no doubt that good technology has an incredible impact on the fast-moving yet nuanced world of financial trading.

Modern-day financial trading floors are a far cry from the noisy, frantic telephone-centred scenes of the 1980s. Significant upward trends in computing, data distribution and automated trading techniques have placed IT at the core of these environments. Trading floors are now dynamic hotbeds of IT innovation, where latency is king, and where even a few minutes of downtime can result in multi-million dollar losses. At the New York Stock Exchange, computers even have the exact same cable lengths so one doesn’t beat any others by being a little shorter and therefore faster to the mark.

But this is placing IT management teams under intense pressure to ensure operating environments are perfect. Whether performing maintenance, patching vital software updates, carrying out regular moves/adds/changes (MACs) according to traders’ requirements or ensuring processes are compliant with ever-changing security regulations, these teams have their work cut out.

With these unique challenges, organisations can benefit from Virtual Desktop Infrastructure (VDI) – the practice of hosting a desktop operating system within a virtual machine running on a centralised server, with users accessing this virtual environment through any endpoint device. When assessing how best to adapt their IT strategy there are a number of areas financial trading houses should consider:

Workforce transformation

The first of these is IT management. On a trading floor, MACs – a set of tasks that IT teams regularly perform to keep computing equipment up-to-date and aligned with user requirements – happen continuously. With traders regularly relocating and demanding ever-so-slightly different configurations of hardware and software – IT teams can find themselves on a carousel of moving parts, each one scrutinised.

The prevalence of multiple devices and mobile working compounds this challenge – laptops must be kept up to date and software applications patched to mobile devices so that trades can be executed on the move. For many financial institutions, this array of devices often includes multiple PCs per trader – sometimes one per monitor – which must be moved and managed individually.

With VDI, workstations are moved to the datacenter and can be replaced by location-agnostic thin clients, which are centrally configured, eliminating the need for a member of the IT team to visit the user’s desk. Utilising thin clients improves reliability and, in the case of MACs, enables immediate reconfiguration, getting the trader back online and sustaining invaluable uptime. For this reason, organisations such as Kotak Securities have implemented thin clients in order to benefit from the devices’ secure, high performance capabilities, and reduce the IT management burden.

Application deployment

Software deployments present another significant challenge for IT. Traders use customised application sets for news monitoring, price analysis and communication, amongst a range of other purposes. Deploying and updating these manually, across the myriad of devices, is time-intensive and adds further weight to the IT management workload.

With virtual desktops, all software deployments and updates are administered centrally, enabling the complex web of applications to be coordinated from a single system. Not only does this reduce time spent “keeping the lights on”, but also enables IT teams to focus on innovation. In a world where IT innovation can lead to millions in additional revenue, this is a significant ‘value-add’.

Security and compliance

Amongst the IT management issues regularly faced by financial institutions, security is also close to the top of the list. As data protection regulation continues to tighten and malware techniques become more varied, monitoring endpoints and storage methods becomes a business necessity.

For trading houses handling market-sensitive information, this level of protection is nothing new. Many organisations already utilise virtual desktops to remain aware of where their data resides and how it is communicated both internally and externally. With all data held in the datacenter, information is secure, and reporting/auditing is more straightforward.

The threat of malware is, comparatively, a new challenge. For traders on the move, even when operating in a virtualized environment, it is essential to keep endpoints safe from would-be hackers. To do so, organisations can patch embedded endpoint security software. This additional layer of threat protection ensures vital information is kept safe and is easily managed across all devices.

Energy consumption

The final challenge for financial trading houses seeking to get more from their IT is its impact on energy consumption. In terms of building regulations, many of the world’s financial offices are already maxed out in terms of energy usage, not least because datacenters are often housed on site. Moving workstations to the datacenter and replacing with low energy consumption desktops, such as thin clients, has a significant impact on power consumption, and air-con demands. VDI also enables more straightforward integration of hybrid cloud storage techniques, again, removing power-intensive datacenter components from the building.

VDI is helping the financial sector to overcome some of its core IT challenges. Through centralized client management across a range of devices, companies no longer have to dispatch technicians to traders’ desk or to remote deployments. Traders are not disrupted, and IT personnel can execute repairs and software upgrades in minutes rather than hours. This frees up time for IT innovation, all while ensuring vital data is kept safe.

To ease the regulatory and budget pressures facing IT departments across the finance industry, VDI is a safe bet.

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IoT at starting gate

South Africa is already past the Internet of Things (IoT) hype cycle and well into the mainstream, writes MARK WALKER, associate vice president of Sub-Saharan Africa at International Data Corporation (IDC).

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Projects and pilots are already becoming a commercial reality, tying neatly into the 2017 IDC prediction that 2018 would be the year when the local market took IoT mainstream. Over the next 12-18 months, it is anticipated that IoT implementations will continue to rise in both scope and popularity. Already 23% are in full deployment with 39% in the pilot phase. The value of IoT has been systematically proven and yet its reputation remains tenuous – more than 5% of companies are reluctant to put their money where the trend is – thanks to the shifting sands of IoT perception and success rate.

There are several reasons behind why IoT implementations are failing. The biggest is that organisations don’t know where to start. They know that IoT is something they can harness today and that it can be used to shift outdated modalities and operations. They are aware of the benefits and the case studies. What they don’t know is how to apply this knowledge to their own journey so their IoT story isn’t one of overbearing complexity and rising costs.

Another stumbling block is perception. Yes, there is the futuristic potential with the talking fridge and intelligent desk, but this is not where the real value lies. Organisations are overlooking the challenges that can be solved by realistic IoT, the banal and the boring solutions that leverage systems to deliver on business priorities. IoT’s potential sits within its ability to get the best out of assets and production efficiencies, solving problems in automation, security, and environment.

In addition to this, there is a lack of clarity around return on investment, uncertainty around the benefits, a lack of executive leadership, and concerns around security and the complexities of regulation.  Because IoT is an emerging technology there remains a limited awareness of the true extent of its value proposition and yet 66% of organisations are confident that this value exists.

This percentage poses both a problem and opportunity. On one hand, it showcases the local shift in thinking towards IoT as a technology worth investing into. On the other hand, many companies are seeing the competition invest and leaping blindly in the wrong direction. Stop. IoT is not the same for every business.

It is essential that every company makes its own case for IoT based on its needs and outcomes. Does agriculture have the same challenges as mining? Does one mining company have the same challenges as another? The answer is no. Organisations that want their IoT investment to succeed must reject the idea that they can pick up where another has left off. IoT must be relevant to the business outcome that it needs to achieve. While some use cases may apply to most industries based on specific circumstances, there are different realities and priorities that will demand a different approach and starting point.

Ask – what is the business problem right now and how can technology be leveraged to resolve it?

In the agriculture space, there is a need to improve crop yields and livestock management, improve farm productivity and implement environmental monitoring. In the construction and mining industry, safety and emergency response are a priority alongside workforce and production management. Education shifts the lens towards improving delivery and quality of education, access to advanced learning methods and reducing the costs of learning.  Smart cities want to improve traffic and efficiently deliver public services and healthcare is focusing on wellness, reducing hospital admissions and the security of assets and inventory management.

The technology and solutions selected must speak to these specific challenges.

If there are no insights used to create an IoT solution, it’s the equivalent of having the fastest Ferrari on Rivonia Road in peak traffic. It makes a fantastic noise, but it isn’t going to move any faster than the broken-down sedan in the next lane. Everyone will be impressed with the Ferrari, but the amount of power and the size of the investment mean nothing. It’s in the wrong place.

What differentiates the IoT successes is how a company leverages data to deliver meaningful value-added predictions and actions for personalised efficiencies, convenience, and improved industry processes. To move forward the organisation needs to focus on the business outcomes and not just the technology. They need to localise and adapt by applying context to the problem that’s being solved and explore innovation through partnerships and experimentation.

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ERP underpins food tracking

The food traceability market is expected to reach almost $20 billion by 2022 as increased consumer awareness, strict governance requirements, and advances in technology are resulting in growing standardisation of the segment, says STUART SCANLON, managing director of epic ERP

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Just like any data-driven environment, one of the biggest enablers of this is integrated enterprise resource planning (ERP) solutions.

As the name suggests, traceability is the ability to track something through all stages of production, processing, and distribution. When it comes to the food industry, traceability must also enable stakeholders to identify the source of all food inputs that can include anything from raw materials, additives, ingredients, and packaging.

Considering the wealth of data that all these facets generate, it is hardly surprising that systems and processes need to be put in place to manage, analyse, and provide actionable insights. With traceability enabling corrective measures to be taken (think product recalls), having an efficient system is often the difference between life or death when it comes to public health risks.

Expansive solutions

Sceptics argue that traceability simply requires an extensive data warehouse to be done correctly, the reality is quite different. Yes, there are standard data records to be managed, but the real value lies in how all these components are tied together.

ERP provides the digital glue to enable this. With each stakeholder audience requiring different aspects of traceability (and compliance), it is essential for the producer, distributor, and every other organisation in the supply chain, to manage this effectively in a standardised manner.

With so many different companies involved in the food cycle, many using their own, proprietary systems, just consider the complexity of trying to manage traceability. Organisations must not only contend with local challenges, but global ones as well as the import and export of food are big business drivers.

So, even though traceability is vital to keep track of everything in this complex cycle, it is also imperative to monitor the ingredients and factories where items are produced. Having expansive solutions that must track the entire process from ‘cradle to grave’ is an imperative. Not only is this vital from a safety perspective, but from cost and reputational management aspects as well. Just think of the recent listeriosis issue in South Africa and the impact it has had on all parties in that supply chain.

Efficiency improvements

Thanks to the increasing digital transformation efforts by companies in the food industry, traceability becomes a more effective process. It is no longer a case of using on-premise solutions that can be compromised but having hosted ones that provide more effective fail-safes.

In a market segment that requires strict compliance and regulatory requirements to be met, cloud-based solutions can provide everyone in the supply chain with a more secure (and tamper-resistant) solution than many of the legacy approaches of old.

This is not to say ERP requires the one or the other. Instead, there needs to be a transition provided between the two scenarios that empowers those in the food supply chain to maximise the insights (and benefits) derived from traceability.

Now, more than ever, traceability is a business priority. Having the correct foundation through effective ERP is essential if a business can manage its growth and meet legislative requirements into the future.

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