Enterprise data management is about more than an operational data store

Marc Rubenfeld, CIPM, Head of Eagle Solutions EMEA/APAC


dmSome think when it comes to enterprise data management systems that it’s purely about the integration and validation of different data from different sources and its movement downstream for use elsewhere in the business. This was certainly a view I heard repeated at a recent conference I spoke at in London that attracted business, data and IT professionals from investment management firms across Europe.

While handling active, current operational data is a crucial element of data management, it is just one aspect that is more appropriately described as an operational data store (ODS). There are other aspects, such as enriching, mastering, warehousing and “mart-ing”, that make data management a much broader discipline that can underpin fundamental processes and functions across the whole business.

Take the handling of accumulated historical position data to provide a permanent book of record, for example. Often referred to as the data warehouse, this is an incredibly powerful area of data management. Managed correctly, this data has the granularity, detail and analytical capacity required for risk management, performance measurement and attribution, regulatory reporting and compliance monitoring. It’s here – rather than in the ODS – that different asset classes, like private equity or real estate, are typically merged with equities for portfolio-level analysis. Not all data management systems provide this warehousing function and instead focus solely on the ODS side of things, but in order realise the full potential of their data, firms need their EDM platforms to be able to do both.

At Eagle, as you might expect from a company founded on a data-centric model, we have these capabilities. We have tools, such as Eagle’s Integration Workflow Studio and Data Integration Services, to take data in, validate it and distribute it to downstream systems. At the same time, Eagle Data Management contains, among other things, a permanent record of aggregated, enriched and normalized positions, and all transactions executed, as well as all the classifications applied to each security. It also has robust user manager capabilities to handle entitlements to data across the organisation.

These are important aspects of data management and have a number of associated business benefits. Consider, for example, a situation in which a regulator is seeking backup to support how a firm derived its reported 10% of exposure, which was allocated to a particular region for a given period of time. Someone would have to pull the data for each security for the specified timeframe, which has been tied to a country, which is in turn mapped to a region. With a permanent record in place and the power of look-through capabilities, users can quickly and easily derive their backdated total exposure to that region; without it, they’re left with a potentially time-consuming and futile triangulation exercise that will probably leave regulators unsatisfied.

A data management solution must fulfill both the ODS and data warehousing functions, as well as enrichment, mastering and “mart-ing”, to be able to support firms’ book-of-records needs. The Investment Book of Record (IBOR), for example, is often treated as an accounting issue; however, achieving an IBOR is as much about data management as anything else. In fact, we’ve been offering our clients IBOR solutions as part of our data management platform for well over a decade.

The typical business objectives for developing an IBOR include gaining access to a single source of financial truth across the enterprise, as well as information that is delivered accurately and in real time to improve the quality and efficiency of decision-making in the front office. Meeting these objectives relies on good data management. Approaching an IBOR project from an accounting perspective, without recognizing the role of data management, can result in an inflexible solution that requires data to be reprocessed, which only adds a layer of complexity and time, and opens the door for inconsistencies.

Beyond investment information, firms are also able to access comprehensive and consistent performance results, exposure analysis and other enriched information for all portfolios and business lines. These capabilities, when they’re part of an integrated solution, allow firms to develop a Performance Book of Record (PBOR), which delivers an “official” view of performance results and offers the flexibility needed for analysis around different asset types, historical returns, benchmark relationships, or composited portfolios and nested composite hierarchies.

The breadth of business functions that can be addressed by an investment firm’s data management system is vast; from supporting day-to-day operational functions through to performance measurement to risk management. Eagle’s data-centric approach provides the flexibility and strength to support business needs that often go well beyond those originally envisioned and that are regarded, by many, as beyond the realm of data management.

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