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The time will come to update your investment performance system, and once that moment hits, it will take the right team to help you choose the right vendor(s) for the job. The team can include sponsors, steering committees, stakeholders, managers, experts, analysts, and more. These people work together to create detailed requests for proposals (RFPs) with thousands of criteria, scoring systems, and lists. During this time demos, proof-of-concepts, final selections, management approvals, and contract negotiations occur. It is a thorough process to check all the boxes.
This entire operation can require a significant amount of time and resources to create a successful operating model. It is challenging for most firms to do this, especially considering all the other priorities they must attend to in their day-to-day operations. However, soon after, someone realizes that the necessary data sources to feed this new initiative have yet to be identified appropriately or vetted. A frantic rush begins to gather information from various feeds and databases, some of which, may be considered as reliable sources.
Unfortunately, the complete truth is only revealed much later, typically during a new system’s user acceptance testing phase. This truth is almost always accompanied by disheartening news: your input data is unsuitable for the intended operating model in terms of performance.
Frequently, you will find that this type of situation will come up when you replace an outdated system with a new performance system. People often question why the old system, which relied on legacy systems with reliable data governance, is being replaced. The main issue here is that the old system or target operating model needed to be performing better; if it was, there would be no need for an upgrade. You will need to define, identify, and validate new data sources and requirements in the value chain if your upgrade shows the following on the target operating model:
- New asset classes, derivatives, time zones, or benchmarks
- More complex client, custodial, and portfolio structures
- Augmented and more flexible security classification structures
- Corrections, extensions, or enhancements to legacy performance calculations
- New attribution methodologies
Surprisingly enough, a common misconception of clients is that the vendor will miraculously solve all their target operating model problems and there will be zero issues after signature. A blur in responsibilities between execution and strategy additionally causes many problems. For example data input issues are not under the vendor’s scope. If there are any misaligned security identifiers or missing market values in merger transactions, it is up to the firm to find and fix the problem. However, doing so at this stage of the project will undoubtedly exceed your budget and timeline constraints.
Meradia is here to provide a solution for this common blind spot: the Performance Data Readiness Assessment (PDRA). A PDRA is a detailed inventory that includes all the information about your data sources, like availability, frequency, relationships, attributes, and quality metrics. This assessment is crucial to meet performance demands.
The great thing about this is you can efficiently conduct a PDRA alongside the process of selecting a performance vendor for your target operating model. By doing this, you will avoid any surprises with your data later on, which could seriously harm your project. Plus, starting the remediation process early will increase your chances of success with the key components involved.
HOW MERADIA CAN HELP WITH INVESTMENT MANAGEMENT PERFORMANCE SERVICES
We are one of the leaders in performance transformation. We have worked with and analyzed the experiences of top managers in the investment industry and developed a PDRA methodology and organizational strategy.
Our strategy includes input data sources, attributes, fitness tests, and recommended options and strategies to address any issues. With our proven tools, you can confidently achieve a successful and timely implementation of your performance goals.
Data Management Strategy for Investment Management
Investment Managers are continuously challenged by market pressures. To stay ahead of the game amid increasing pressure from investors, regulators, and market trends, investment managers are always on the lookout for ways to improve their performance and target operating model.
This is where Meradia can help. The key to achieving this within your firm is identifying and selecting a solid data management strategy. A well-defined data management strategy can help you find the right data and make it readily available, accurate, and timely for decision-making and reporting for your current operating model.
What is a perfect target operating model for your firm?
People use the term “target operating model” when businesses discuss an organizational strategy. It defines the ideal way an investment management firm operates, including its processes, technology infrastructure, and organizational structure.
Think of a well-designed target operating model as a roadmap that helps achieve strategic goals and improve operational efficiency. It not only highlights areas for improvement but also ensures resources are used effectively to deliver results.
How Meradia’s PDRA methodology can help with Data Strategy
Meradia is backed by years of industry experience and insights from top asset and wealth managers when discussing investment strategy to keep your mind at ease. We use proven tools to help revolutionize your approach to data management. Our PDRA methodology is an excellent solution for your target operating model with many benefits. From identifying areas for improvement in your data management processes to providing recommended options and strategies, Meradia has you covered.
Contact us today to start your performance transformation journey. Our team is ready to support you with your target operating models, strong data governance, creating data products, cloud computing, business strategy, corporate strategy, risk management, and more.