Enterprise Technology: Untangling the Spaghetti Junction of Data

Tom Whitson

Setting the Scene – The Data Arms Race

In today’s data-driven business world, asset managers are demanding access to an ever-increasing breadth and depth of data in order to stay on top, with 40% of large firms having an explicit goal to become an analytics focussed organisation. Meanwhile, over 90% of asset managers’ Data Operating Models are still in the “Frustratingly Fragmented” or “Getting Organised” phase of the journey according to historical Alpha FMC data. This article investigates Enterprise Investments Technology’s role in creating and provisioning high-quality data sets to their consumers.

Addressing an Ever-Increasing Appetite for Data

Through the early 2000s Asset Managers tended to buy “Best of Breed” systems and integrate them; typically resulting in a spaghetti junction of flat files, custom reports and point to point data flows connecting the various systems across functions. This created a high dependency on support staff to manage and upgrade these interfaces and an operational burden in terms of frequent breakdowns or delays in data transmission.

With the increase in demand for high quality, real-time, API accessible data, Managers have been forced to double down on interface spend just to keep the lights on. Typically, this has exacerbated the issue by taking up hard-won change spend and allocating it back to BAU; forward-thinking Asset Managers are looking to Enterprise Investments Technology to solve the data challenges they face.v

Enterprise Technology – The Foundation of a Solid Data Strategy

Enterprise Technology is designed to cater to a broad cross-section of the business, dealing with all asset classes and business functions. While this may leave it lacking in certain cutting edge asset classes or nuanced analytics scenarios, it creates a hugely powerful data engine capable of holding a single view across the full range of funds.

From front-to-back across all funds, this holistic view of data is seen by many as the key to unpicking the point-to-point architectures of old, even pushing into the opaque world of private markets with BlackRock’s acquisition of eFront.

Alpha see four key reasons asset managers are looking to Enterprise Technology to solve their problems:

1. Services and Technology Combined

In combination with a suite of services such as State Street’s Alpha offering, which sees CRD technology paired with State Street’s services, providers are now hoping to include a range of Data as a Service functionality. This could further obfuscate Asset Managers from the headache of managing their data, albeit for a fee.

2. Creation of Golden Sources

Often, challenges arise in defining the golden source of data replicated across multiple systems, security master or issuer hierarchies. Enterprise Technology, by nature of being cross-business, removes this challenge by reducing the need for replication of these data sets.

3. A Single Source of Data

Alpha regularly sees Asset Managers with collections of systems providing the same capabilities but for different fund ranges. This solution often appears workable with many teams being split along asset class lines; however, it does cause a huge burden for those looking to have a single view of data. Enterprise solutions remove this issue by providing a single system capable of covering all asset classes and providing holistic views required by boards and senior management teams.

4. API Driven design

Enterprise providers have typically risen data provision challenges and understand that a modern asset manager requires robust and documented APIs. With Enterprise Technology gone are the days of stored procedures and clunky reporting engines repurposed as data warehouses.

Get on Board or Get Left Behind

Enterprise solutions are already used by at least 70% of the top 30 Asset Managers; these managers are starting to see the benefit of a solid core built around an Enterprise Solution, providing them with a strong data model, API-first capability and a partner in keeping up with industry changes. All this allows these managers to allocate resources and capital to truly differentiating areas by building cutting edge front office tooling, advanced analytics capabilities or digital client experiences. In Alpha’s view, it’s time to get on board or get left behind.

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Alpha's Enterprise Experience

At Alpha, we have a wealth of experience supporting our clients with the full transition to Enterprise Technology. We work with clients to assess whether it’s the right option for you, support contractual discussions and deliver projects from technical design to implementation and adoption. Alongside this, we can call on our team of industry experts to ensure we address your specific priorities, be it ESG, Operational Resilience, Cost Reduction or Innovation. Since Alpha’s inception, we have worked on over 40 of the most complex Enterprise Technology programmes in the industry, from vendor selection, through to due diligence, contract negotiation and implementation.

About the Author

Tom Whitson
Senior Manager, Asset and Wealth Management Consulting UK

Tom is a Senior Manager at Alpha with over 11 years of experience in consulting for Financial Services firms globally. He has helped clients to deliver large scale transformations, including technology and operating model change with a focus on Investments Technology.