Becoming a Data-Driven Organisation

As investment firms turn to data to help inform and improve investment and operational decision-making, they need to take a logistical, rather than tactical, approach to data management.

Marc Rubenfeld, Head of Sales EMEA, Eagle Investment Systems


Evidence-based management has become the new normal across businesses as organisations in every sector are looking to improve decision-making and, ultimately, the client experience. This isn’t necessarily new, but what has changed is that today they’re leveraging facts and data instead of relying purely on the gut instincts of their workforce. This has been made possible because technology has evolved to a point where the client experience can be substantially improved by utilising and combining data in new and unique ways. For example, Uber has combined lots of different types of data together to create an entirely new client experience and business model.

At a high-level, this has created a new breed of organisation: the data-driven organisation. A data-driven organisation fundamentally relies on data to conduct business and optimise the client experience. They typically display several characteristics, including a relentless focus on measuring results and continuous improvement, coupled with frictionless self-service capabilities available to clients. To achieve these characteristics, the value of data must be baked into the organisation’s DNA.

Organisations will need to become data-driven if they want to remain competitive. Like countless technological advances in the past, if your organisation does not embrace the potential of data, it will begin a painful journey to irrelevance. Imagine a business that did not embrace electricity or the telephone; this is the same prospect facing businesses that fail to embrace data today.

The investment industry is no different; firms are more focused on data than ever before as a means to rethink both the client experience and how to perform day-to-day business functions. Specifically, investment managers are undertaking transformation programmes to put data at the heart of their organisation in order to realise the benefits of being data-driven.

Study Your Logistics
While data can indeed lead to better decision-making, it’s not guaranteed and—as many firms are finding—cannot be achieved overnight.

Consider the quote attributed to General Robert H. Barrow, of the US Marine Corps: “Amateurs talk about tactics, but professionals study logistics.” While referring to military operations, this sentiment is just as applicable to data management. Becoming a data-driven organisation cannot be achieved through tactics alone. Only by focusing on the data management processes and the underlying framework—the logistical components that enable and promote a data-driven organisation—can the enterprise benefit from accurate and fit-for-purpose data.

One common misconception, for example, is that more data automatically leads to better decision-making. While this statement can be true, accumulating data for accumulation’s sake is not necessarily desirable and it very much depends on the quality and accuracy of that data.

Take the data lake as an example. They can provide a very helpful repository for storing unstructured data. Additionally, they allow users to retrieve the necessary analytics, as needed, so this may seem like a logical step in becoming a data-driven organisation. But while data lakes are extremely flexible, they’re just as susceptible to lapses in data quality. In fact, the term ‘data swamp’ has been coined to describe a poorly designed or neglected data lake with unusable data.

Plotting a Course
Becoming a data-driven organisation is no easy task, and focusing on the logistics to facilitate data accuracy and implement robust, repeatable processes to get data to the right place at the right time is a prerequisite.

Talk of business transformations typically begin with aspirations of building data lakes and leveraging elastic computing. While it’s true that new technologies can take operations from ‘good’ to ‘great,’ most organisations I meet with aren’t ‘good’ yet. I believe that this is the biggest challenge in our industry, but companies can start to make progress using an agile approach and by focusing on their core investment data.

Under this approach, traditional data management tools supported by a managed service can give organisations a high quality core dataset to build around. This requires buy-in from the entire organisation, but needs to be done as a first step. Once this foundation is created, it’s easy to add other data domains. Users can also plug this high quality data into a data lake or other unstructured data store so it can be merged with a wide array of other data sources.

When scoping out a new data management project, transformation architects should avoid the inclination to do everything at once and risk overstretching. Instead, focus on the areas that will deliver the greatest value first.

They should also resist the temptation to go it alone. Transitioning to become data-driven is a complex undertaking and organisations that try to build their own solutions often miss critical pieces of the larger puzzle. They may be focused on some technical or architectural standard, for instance, that locks them into maintaining and running everything themselves long after that standard is out of date. By leveraging the experience of third-party vendors and consultants, organisations can avoid some common pitfalls, while maintaining focus on the overall objective.

Furthermore, consider how the data management process can be most effectively deployed to serve business needs. To do this, organisations will want to identify which elements are commoditised and no longer represent a competitive advantage. Being data-driven does not necessarily mean ‘owning’ the entire data supply chain either. By working with independent solution providers, firms gain industry-standard capabilities that can be tailored to meet bespoke requirements. Perhaps more importantly, these components can be provided as a service, which instills flexibility and helps manage costs, while facilitating future growth.

To find out more about the logistics behind becoming a data-driven organisation, please read my recent article titled “A framework for data accuracy and supporting better decision-making,” published in the Journal of Securities Operations & Custody.

Leave a Reply