James Milne, Head of Product at AlphaCert sat down with Stephen Huppert, Independent Consultant and Advisor in July, for another Alpha Chats session.
In this episode, James and Stephen discuss the fundamentals of data management for investment management professionals and share insight on the value of the soon-to-be-released, AlphaCert Data Management Maturity Model.
If you liked this episode, be sure to download our DM³ white paper and check out the other blogs in the Alpha Chats series: Non-fungible tokens (NFG), Climate Change Financial Risk and Learnings from the GameStop Saga.
Alpha Chats Data Management Video Transcript
Hi, everybody. Welcome to the latest in our Alpha Chat series. I’m here with an industry leader, Stephen Huppert, who’s been in the industry for around 30 years. He has a lot of experience across the industry and many with customers. Today, we’re talking about data management in the industry. What we’d like to introduce is the AlphaCert Data Management Maturity Model, which we’re going to be sending out in an eBook and a white paper in the next couple of weeks. We want to drill into that a little bit today and really answer a few questions. Why did we build a data management maturity model? How should customers use it and how should they think about it? What are the benefits around having a data management maturity model; a framework with which to look at your data management within your organisation?
I’ll start off with a few thoughts in terms of what the data management maturity model enables. At the moment, we see data management every time we go and see a customer, a point which everybody is aware of and is gaining a bit more traction. But really, it’s becoming increasingly important for investment managers to have a clear focus on their data. There are challenges in both small and large funds around data and the more data a business has, the more complex it becomes, and the more important data management becomes. That’s really the thinking behind that data management maturity model. Stephen, when we think about the framework, what questions are we trying to help customers and industry participants such as asset managers and funds, answer with the data management maturity model?
What does the AlphaCert Data Management Maturity Model enable?
Thanks, James. Thanks for having me here. Many of the investment management organisations that I’ve spoken to over the years, the gap between where they are now, and good practise can be daunting and overwhelming. I guess a couple of questions that often come up in our conversations are: how are we doing and what should we do next? I think we’re past the point of convincing people that data is important, that it is important to become a data driven organisation; that’s been widely accepted. If I look at the superannuation funds and investment managers I talk to, it is definitely on the board strategy, and there’ll be people tasked with the job of looking at data management. But the real challenge is where do I go next? That’s really what’s motivated us to have a think about building a data management maturity model to help organisations answer those two questions and decide where to invest their time, money, and energy so that the data manager does support the organisation’s objectives.
Yeah, thanks Stephen. I think, just to give some examples of what we see in terms of data management; when we go in to firstly consult with customers, and secondly to implement the AlphaCert platform, what we see is a progression through the stages. That’s what we’re trying to put into a framework, but what we see oftentimes is a lot of spreadsheets within the business. We see spreadsheets being used in ways which are not recommended. We were seeing multi-tiered spreadsheets 25, 50 tabs. They’re creaking at the edges. There are all sorts of look-ups which are error prone, and that type of thing around these models. Also, spreadsheets being used as databases. There’s no doubt that spreadsheets are a great tool but used in the right way where they’re being backed by validated trusted data from a single source of truth, like AlphaCert or an investment management platform. That’s how we recommend using spreadsheets within the business.
Then going through the data management maturity model — as we bring it out — you’ll be able to see we’ve gone through the various stages that people can progress their organisation through; from awareness through to action, through to having systems in place, which are really enabling the business to be humming with efficiency of moving data through the business.
Yeah, absolutely. We looked around and there are plenty of data maturity models out there. You do a Google on that, and you’ll get all sorts of things. None of them quite fit into the investment management sector. Also, a lot of them are quite complex and a lot of overhead to use them, so we were looking for something that would be relatively simple for investment management teams and investment operations teams to apply, and to be able to get a very quick assessment of where they’re at. That’s a really important one. I think a nice analogy to think about is if I’m standing outside the house and I want to get up to the roof to clean the gutters, I can’t just jump up there. I need to get a ladder. I need to go up one rung at a time, and that’s very much how we see data management. It’s all very well to have an aspiration about being a leading data driven organisation, but often the gap between now and then is overwhelming; that’s where we’ve started to get our data management maturity model in place.
What are the benefits of the AlphaCert Data Management Maturity Model?
Stephen, what do you think about the benefits of the data management maturity model? We’re providing a framework. Can you articulate some of those benefits that customers would be able to get from using this model?
Certainly, James. I think the starting point, it really does help an organisation work out where they’re up to, work out where they want to be, and more importantly, develop a roadmap with prioritised initiatives. Because we understand that every fund manager, every super fund’s got competing demands for resources and a budget. It really is important to prioritise initiatives and workout what are we going to do as a program of work for the next six months, for the six months after that? Then the data management maturity model allows you to track progress of these initiatives. That’s really important both internally within the investment data management team, but also for reporting up through to the executive, and board so that they actually can see some results of the investment they’re making.
We also found it’s useful to benchmark your organisation against other investment managers and get a sense of how you’re doing in terms of the market. It also provides a good framework for communicating with the board and executives, some common language. Another benefit that I started to see emerge here in Australia, many of our viewers will know that there’s an enormous space of mergers within the superannuation industry at the moment. I think it’d be really useful if both organisations could understand their levels of data maturity using common language and then when the merger occurs, to be able to use the data management and maturity model as part of the merger activity and post-merger activity.
Absolutely. That’s a really interesting topic that we’ll be delving a little bit further into and one of our upcoming Alpha Chats. All right. Well, thanks everybody. I think that’s a good wrap up for the AlphaCert Data Management Maturity Model. Please keep an eye on the AlphaCert website and we’ll be introducing the eBook and white paper in due course. Thanks a lot, Stephen. Great to have you on.