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Specialization in: coaching, training, mentoring, organizational assessments for all aspects of software development, and consulting on strategies & implementations of process improvement engagements. Expertise in all leading methodologies such as IBM Rational Unified Process (RUP), OpenUP, EnterpriseUP, and Agile approaches such as XP, Scrum, and DSDM. Over 15 years of experience in guiding companies toward improving the implementation of new process solutions and technology, providing services as an agile coach, process mentor, and trainer. Organizational change management leader, working hand and hand with organizations in developing a strategy for implementing an improved process and the resulting organizational culture changes. Focus is the company’s Return on investment (ROI) and helps manage how much effective change a given organization can adopt at any given point. Coached, mentored, and trained thousands of practitioners on all aspects of software development, conducted dozens of Conference presentations, authored many publications, sat on advisory boards, and chaired User Groups. Author of “Implementing the IBM Rational Unified Process and Solutions – A Guide to Improving Your Software Development Capability and Maturity, IBM Press 2007”. This is the book on how to implement & adopt RUP and make it agile, that was written at the request of the IBM Rational brand, and is based on more than a decade of real life practical experiences implementing, mentoring, and coaching on software development process engagements. Invited by the IBM Rational brand in 2003 to become a member of the Methods Client Advisory Group (CAG), providing input and direction to the development of RUP and other IBM methods. The group consists of 20 selected individuals representing expertise from around the world. Program Director of the largest Rational User Group in the country, Co-Discussion Facilitator of the Rational RUP Discussion forum for IBM’s developerWorks, and a recurring member (1 of 4) of the Process and Portfolio Management Panel of Experts IBM Rational Software Development Conferences for consecutive years. Frequent speaker at industry conferences on topics related to software development best practices, effective coaching & mentoring, and organizational change management. Joshua has posted 7 posts at DZone. View Full User Profile

Software Development Practices Applied to Financial Modeling

03.25.2010
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The current state of the economy and its financial crisis has required organizations to put additional structure and scrutiny to financial model risk management.  There is increased stipulation for rigor and accountability from executive management, audit, and external agencies when it comes to the utilization of financial models guiding or influencing business decisions.

Are you thinking what’s a financial model?  Well, they are approximations of a complex real-world process…hmm that sounds rather academic.  Basically, models are used to reduce complexity using really really sophisticated mathematical and statistical calculations to estimate something or predict an outcome.

As it turns out, in practice, financial modeling is a lot like software development, unless you are chatting with a financial modeler and then they are nothing alike ;).  Models incorporate lots of functional features, data extraction, data transformation, calculations, and output in various formats.  Further, although there are modeling specific development tools and environments, these often have limited performance when scaling up for multi-user scenarios so models are frequently implemented in SAS or C++.  Yeah, that sounds very similar to software development to me.

So what is the big difference in financial modeling vs. software development?  The resources.  People that are typically engaged in financial modeling are not formally (or often even informally) trained in software development, they are economists and mathematicians and in a few cases I have experienced physicists.  Organizationally they are normally outside of the IT area and are not subject to the same IT general controls. 

I am just beginning to help a client use the process we created for development of small apps outside of IT (see http://www.upmentors.com/144-More-On-the-Process-for-Development-Outside-of-the-IT-Area) and apply it to the financial modeling area along with all the necessary tweaks to fit that specific type of domain.  I will continue to write about how it is developing and the path we take to get to our first release…

Joshua Barnes

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Published at DZone with permission of its author, Joshua Barnes. (source)

(Note: Opinions expressed in this article and its replies are the opinions of their respective authors and not those of DZone, Inc.)

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Peter Veentjer replied on Fri, 2010/03/26 - 4:32am

The big problem I usually see with financial models is that I don't see them. Often the business logic is completely overshadowed by the technical complexity or by anti patterns like anemic domain models (so your business logic is scathered all over the codebase).

This makes business logic often very inflexible and hard to understand.

 

Peter Veentjer

Multiverse: Software Transactional Memory for Java

http://multiverse.codehaus.org

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