Over 50 senior buy-side industry figures met at the newly-refurbished NASDAQ MarketSite in New York last June for the RIMES 2nd Data Governance Conference. On the agenda were some of the most important challenges facing the industry when it comes to changes in current data management and governance practices.
A broad mix of COOs/CDAs and heads of department attended, whose roles include performance analysis, operations management, business data strategy, fund marketing and business change. The range of different organizations represented was also broad, with representatives from small asset managers through to hedge funds, global investment companies, along with insurance companies and pension funds.
Topics included the importance of data consistency, the quantified benefits of managed data, implementation of a data governance program, best practices, improving corporate efficiency, and the impact of a hybrid data model. A top-level summary follows.
Dessa Glasser, Managing Director and Chief Data Officer for Asset Management at JPMorgan Chase
Creating Consistent and Accurate Data
Dessa summarized the requirements of regulators and the challenges faced by firms when trying to deal with those requirements – including multiple data sources, lack of consistent standards, and differences in both definitions and methodologies. Her view was that data is a core business asset, and firms ideally need a Chief Data Officer, together with teams who understand that data is their own concern. Some key best practice measures she recommended were as follows:
- Identify who is responsible for what
- Define a target state, aligned strategy, and effective governance model
- Define support structure, organization, and operating model
- Set out key priorities, requirements, and golden data sources
- Align business, operations, and technology – then implement, monitor, and improve.
The presentation went on to summarize a flexible data model, showing how technology can be leveraged to provide high quality, consistent information, along with sample data governance and data management models.
Mary Knox, Research Director, Gartner
The Data Challenge: Re-Inventing Best Practices
Unquestioned assumptions were a theme for Mary Knox’s presentations: the fact that best practices are based on past understandings and finite information. She looked at how issues as diverse as investment complexity, costs, security/privacy and technology providers all help to challenge traditional data practices. Mary examined assumptions underlying current ‘best practices’ and compared them with new realities. She explained how a ‘hybrid’ data approach is needed which understands that quality data is really fit-for-purpose data – questioning assumptions about a single correct answer – and she said that this is a business issue, not a technical issue. Mary’s key recommendations were as follows:
- Identify the reasons underlying your current data management practices (are they still valid?, document signposts for possible change)
- Standardize, centralize and control where possible – but embrace heterogeneity
- Replace ‘either/or’ approaches to data quality, architecture, and governance with ‘yes, and’
- Focus governance on opening, not limiting, access.
Michelle Bishop, Principal Consultant at Forrester Consulting
The Total Economic Impact™ of RIMES Managed Data Services
Michelle presented the results of a Forrester study that looked at the quantifiable benefits of RIMES Managed Data Services – in particular their impact on data governance, agility, scalability, data quality, timeliness, and cost reductions. The Forrester study used a Total Economic Impact™ (TEI) framework and involved interviews with four major buy-side firms.
Quantifiable benefits revealed by the TEI framework included:
- Improved productivity with increased operational efficiency
- IT resource savings with improved data feed and delivery maintenance
- Improved ability to scale cost avoidance of additional headcount
- Faster time-to-market improved front-office productivity
- Reduction in third-party legacy vendor fees.
For an example case study, the three-year risk-adjusted cash flow for RIMES Managed Data Services showed a positive ROI (309%), a NPV of $3.63M, and a 2.9 month payback period.
Eric Smith, Manager of Operations and Data Management, Harris Associates
Data Governance: Time to Implement the Plan
Assuming a ‘green light’ and executive sponsorship for improved data governance, Eric looked at how to build a framework and implementation plan. He said that settling on approach, goals, and structure/reporting should be followed by an array of implementation activities, with responsibilities, data domains, policies, tools, and training all needing to be defined. Eric outlined some important measures needed to build buy-in and momentum:
- Build your domain teams: name owners and grant them authority as well as responsibility and accountability
- Give teams tasks that bring them into the process
- Weave data governance into the organization (via collaboration with IT)
- Reinforce patterns of behavior, decision making, and authority – to create a culture of data.
Steve Cheng, Global Head of Data Management Solutions, RIMES Technologies
A Framework for Implementing a Hybrid Operating Model
Steve introduced the 2015 RIMES Buy-Side Survey, conducted across US/Canada, EMEA, and Asia Pacific. This reported 59% of asset managers saying that lack of support for data governance was the most important limitation on their data operating model. Excessive/growing costs were surprisingly ranked as least important. Steve summarized change drivers in data management, from pre-2008 drivers focused on timeliness and accuracy through to current strategic drivers that include governance/regulation, transparency, change enabling, agility, and time to market. He explained how a hybrid data model embraces all of this, and removes the complexities involved during in-house data collection, remediation, transformation, storage, and feeding.
Steve showed how RIMES Managed Data Services and a hybrid data model can deliver improved governance, complete with all of the following:
- Detailed business intelligence for senior management
- Reporting tools to analyze and manage data use
- Full inventory of all data feeds delivered from RIMES, demonstrating data provenance and lineage.
Debate around good data governance and how best to achieve it will be continuing at the RIMES 3rd Data Governance Conference in London on 24th November 2015.