The white paper ‘New Plateaus for OMS/EMS Integration‘, commissioned by Eze Software Group (Eze) and produced by Aite Group, examines the state of OMS and EMS integration.
We revisit the topic against a backdrop of profound changes to industry structure and explore the drivers for the current wave of consolidation. Finally, we discuss some of the models of OMS/EMS integration that have come forth, the benefits of and challenges to the same, and briefly opine on how the industry may evolve in the coming years.
It appears the industry’s structural factors may have served to impede OMS/EMS integration as much as the technological complexity itself. But by 2016, the front-office financial technology space has moved into a period of profound change. Post-2009 global financial crisis, the vendor and services industry has been overwhelmed by competitive and existential pressures, including reduced volume, stagnant growth, rising costs, regulatory changes, and shifts in client demand—all reducing industry profitability and forcing the hands of vendors to take decisive and sometimes bold actions to ensure their firms’ sustainability and success.
Expect more industry consolidation. Stand-alone OMSs and EMSs that fail to innovate will lose market share to integrated OMS/EMS or converged OEMSs. And as unaffiliated potential partners become increasingly scarce, like seats in a game of musical chairs, vendors are increasingly fearful that the next time the music stops they will be left alone. This is driving acquisitions and tie-ups that fill gaps and round out offerings. The smooth operators that are able to integrate just right will secure revenue and growth. Vendors that don’t reinvest or just get integration wrong will fail to compete and ultimately be displaced.
The buy-side firms are the real winners as traders finally get to realise the benefits of true OMS/EMS integration.