Allianz Global Investors Management Partners (AGI), which is made up of three separate investment management firms, has about $45 billion in assets under management. While the assets are not eye-popping when compared to a Vanguard or Fidelity, it's still a sizable company.

What's not sizable, though, is the technology team that supports AGI's business applications. In all, just 33 people manage all of the business applications for AGI's three investment management companies, San Diego-based Nicholas Applegate Capital Management (NACM), Dallas-based NFJ Investment Group and Oppenheimer Capital (OpCap) in New York. The application team oversees all of the systems that are needed to run the business, including portfolio management, compliance, sales, CRM, performance and attribution functionality, to name just a few. And the management of all of the business applications and software falls under the leadership of one person, Steve Rapp, who is the managing director and CTO for Allianz Global Investors Management Partners. (Rapp's 33-person team oversees only business applications. Another team of 70 or so people runs the technology and operations side, including all hardware, desktops, networking and telephones.)

With such a relatively small support team, most observers would assume that AGI leans heavily on outsourcers. "We don't have cadres of programmers working for us in an outsourced facility in Bangalore," Rapp says. "But we do have classic long-standing outsourcing relationships." For instance, AGI's accounting systems are run out of Toronto at an SS&C Technologies facility.

"In those cases, we are entirely outsourcing the environment and application, and we just remote [connect] in," app explains. "We have a number of relationships like that."

And AGI doesn't lean heavily on consultants either, according to Rapp. "We use consultants here and there, such as people we have worked with for a long time," he says. As for his 33 full-time team members, Rapp jokes, "These guys are pretty busy -- there are some weeks when they don't sleep."

Big Decisions

Despite the group's small size, Rapp and his senior team members -- including SVP Larry Russell and VPs Mike Urban, Sean Hudson and J.P. Gagnon -- have made some big decisions recently, as is increasingly common of the CTO role in today's business environment.

For example, last year Rapp, then just the CTO at NACM, made the big decision to relocate to New York. The change in scenery turned out to be the right decision for Rapp and for AGI. But moving 2,900 miles to another office was a relatively small decision compared with some of the other work-related decisions Rapp has made over the past couple of years, as AGI is in the process of replacing and standardizing virtually all of its major business systems simultaneously.

"If you were to name all of the major application platform systems at an investment management firm, we are changing all of them at once," Rapp relates. "We are working on the accounting, portfolio management, trade order management, FX trading, performance and attribution, and reconciliation [systems]. This is a multiyear project."

In fact the project is the reason why Rapp requested to be transferred to New York -- so he could help oversee the move to the new systems. "When you are doing a change at this level -- basically all of the major systems -- you need to focus on the people who will be involved in the project," Rapp says. That's not to say that actually configuring and rolling out the new systems is easy.

"Having smart people who are experienced with the technology certainly helps" make the transition to the new technology easier, Rapp comments. "But with so many new tools, you are moving people away from their old systems and practices. That creates a lot of anxiety, and that is one of the things that I actually thought long and hard about.

"That is why I asked if I could relocate to New York for a period of time," Rapp continues. "I felt that to have someone fly in to New York and say 'Here's some more change. My flight leaves tomorrow, see you in a month' -- that is disconcerting. It doesn't build a relationship, and it doesn't build a sense that we are trying to raise all the boats here" in terms of adding functionality and capabilities across the organization.

One Thing Led to Another...

Specifically, AGI is adding functionality by implementing a unified portfolio platform based on technology that NACM has in place in San Diego. "This all started through a collaboration between myself and the then CTO here in New York" in early 2008, Rapp says. "Originally it was going to be operations and technology. We then shared some application technology that was developed in San Diego [for NACM]."

At that time, Rapp adds, OpCap and NFJ were starting to embark on a major technology investment to upgrade many of their business systems. "They saw some of the things we already created, so they decided to co-opt them rather than pay someone else to develop them," Rapp says, adding that at that point senior management saw the benefits of having one technology organization that serves the three independent investment management companies.

For portfolio management and trading, AGI is migrating to Fidessa's LatentZero Capstone platform. "The migration was already underway in San Diego [for NACM], and we will put LatentZero into place at OpCap and NFJ," Rapp reports. FXall, also new to AGI, will be used for foreign currency trade execution in all three firms, he notes.

AGI also is moving OpCap and NFJ to SS&C's Sylvan performance attribution software, which has been in use at NACM since 2003. According to Rapp, the move to the Sylvan product made sense because the application integrates easily with other SS&C products, including Pacer, which all three firms will use for portfolio accounting. Previously, portfolio accounting was handled by Advent Software. The goal is to get OpCap and NFJ on Pacer by early 2010, Rapp says. AGI also is moving all three firms onto Lexus Nexus Interaction for CRM. Currently NACM (since 2003) and NFJ are on Interaction, with OpCap set to transition from SalesLogix in 2010.

Rapp says there are a number of reasons why AGI is moving to these applications. "One reason, of course, is for economies of scale and economic savings," he says. "But, most important, we are adding functionality for the business and, in some cases, the technology is changing the way the business operates so it is more efficient." The new systems, Rapp asserts, can improve business processes and help people make even better business decisions.

In addition, NACM already had a lot of experience with some of the technologies, so it made sense to leverage that knowledge across the three companies rather than select other applications and start from scratch, Rapp contends. "A lot of work had already been done at Nicholas Applegate, and the various applications integrated well," he relates. "In this industry you can find a lot of applications, but they are fairly siloed. You need to find ways to knit them together. Sure, you can look at an individual tool from a certain vendor and it may have superior functionality, but when you look at how they are integrated with other applications in a complete package, the value may not be there."

While Rapp declines to put an overall price tag on the project, he says, "It is in the millions of dollars in terms of spending. And it is in the millions of dollars in savings in years two, three, four and beyond."

Winning Formula

Undertaking such a large project -- or, rather, so many large projects -- with such a small team is possible, Rapp contends, because of the way the team is structured. According to Rapp, he has assigned senior technology team members to work closely with the heads of the business units. "The technology team responds to key departments in the organization. The team can have a tight relationship with the heads of the various departments," he explains. This way, Rapp adds, the head of institutional sales, for instance, can work with the same technology people day in and day out so Rapp's team can understand "on a very intimate level" what the important motivators for the head of institutional sales are. "The same thing holds true for the chief investment officer and all of his portfolio managers and traders," he says.

Having some continuity in the business-technology relationship also brings consistency to the process. "This is a formula that has worked well for me over a long career, and I think it is an obvious approach," Rapp says. "People really appreciate getting to know someone and realizing they can count on them."

Most important, the technology platforms that AGI has selected can grow with the business without adding IT head count, Rapp contends. "Our head count picture from a technology, applications and operations standpoint is very defensible," he says. "We have advanced technology that is allowing us to manage head count at a very competitive level. We delivered a technical platform that can grow and doesn't increase staff as it grows. Usually in the operations and technology area, as the business grows, you need to add operations and technology people in lock step. We have done away with that."