Investment Performance on the Move: Five Steps to Manage Migration Complexity

As the performance measurement function grows in complexity, organizations are migrating to new platforms that can provide the requisite agility. Eagle’s Ian Patient highlights the new demands facing performance teams, while identifying five key principles that can simplify a new system implementation.

Ian Patient, Principal Consultant

It’s generally understood that the investment landscape has become exponentially more complex. At the front lines absorbing the increased complexity is the performance measurement and attribution team, a function that itself has undergone significant change in recent years.

From an operational perspective, the performance function is facing multiple challenges. The financial instruments, themselves, have become more complex and as active managers fight both the low-rate environment and the rotation into passive products, demands for reports and dashboards with more details and analytical capabilities have increased considerably. Another threat is that the existing function, as it endures in most organizations, tends to be fragmented, with a model that leaves team members overstretched and internal and external stakeholders unfulfilled.

Making matters more difficult, performance teams are left trying to solve for these issues on legacy systems that either can’t accommodate the required functionality or don’t have the data foundation in place to deliver information as needed and across digital mediums. And without certain capabilities today – ranging from exception-based workflows to true “look-through” transparency – it can be impossible to adequately meet the needs of a modern investment organization.

The irony is that even as the financial instruments and the markets themselves become more complex, the performance function is expected to calculate returns, deliver data and provide client service in a simple and straightforward way – effectively masking the complexity for all other constituencies. Furthermore, legacy tools do not have the benefit from machine learning or artificial intelligence engines that can capture and report trending themes to others in the value chain by way of systematized management information reporting –  live polling during the recent Eagle ENGAGE18 roadmap presentation showed 91% rated this as ‘Very Important’ or ‘Important’ as Eagle delivers future releases. The agility required to carry out this charge is why so many asset managers have sought to replace aging systems with new technology that can provide the increased analytical capabilities in a central and consistent manner while also automating performance workflows and instilling the necessary standardization to keep pace with evolving demands.

Successfully deploying a new platform involves a level of organizational transition and requires commitment from multiple areas of a firm.  Certain prerequisites, such as ensuring the new solution provides the required functionality, should go without saying, but other best practices can be easily overlooked in the rush to stand up a new system.  In our experience, certain strategies stand out as being critical to success.

Five Steps to Manage Migration Complexity


  1. Data……Data……Data
    A critical component of any performance implementation is the data.  This can be overlooked when the focus is on the system functions and capabilities but without quality data to support these functions, the results will quickly become unreliable and users will lose confidence in the system.  Therefore, one of the first steps should be ensuring a good data governance strategy is in place with the right sources of data being provided and the processes and workflows in place to validate and enrich the data as needed.  Consistently reliable data that has been validated and enriched is the foundation for a successful performance solution.
  2. Project Governance
    From the very outset, new system implementations will benefit from having executive sponsorship. The top-down advocacy can be critical in managing each of the different stakeholders who will become involved in the implementation at one time or another. The senior-level sponsorship will also facilitate communication between teams and tends to drive frequent checks that allow the organization to easily (and quickly) deal with issues as they arise. Moreover, the involvement of the corner office will often provide clarity around the objectives, which can eliminate any ambiguity around the capabilities needed to achieve desired outcomes.
  3. The Approach
    In a recent insight, my colleague Mathieu Benoit highlighted why the model office is such an important component for accounting system implementations; it’s no less critical when standing up performance systems. The model office effectively ensures that the new system can accommodate the needs of the organization and provides an environment in which the proof of concept can be tested, refined and perfected. The model office should be established at the front-end of the project and used iteratively to provide direction for the larger scale implementation.
  4. The People
    The most successful performance system implementations have as much to do with the people as they do with the technology and software being upgraded. And many organizations today will often leverage new system implementations to effect more comprehensive operating model transformations, which may also include reviewing managed services to help with data management or performance operations. When constructing the implementation team, it is important for the team to include both strong internal resources who will use and manage the system going forward as well as resources who have knowledge and experience with the system and best practices.  As a general rule of thumb, the earlier project teams can promote knowledge transfer, the better users will understand new workflows and feel empowered to introduce them into their daily operational practices. This will help facilitate organizational buy-in at the designated “go live” date.
  5. When in Doubt, Stay Standard
    Perhaps the biggest philosophical change in recent years has been the growing appreciation for standardization. As performance system implementations proceed, there is often a tendency to try to replicate an existing process or report as is rather than taking advantage of the new system standard reports or processes and this increases the level of customization involved. We will often advise clients to determine at the outset the level of customization required, and institute an architectural governance process for reviewing all proposed customizations that might arise during implementation. This not only helps to establish guardrails, but it can impose a certain amount of discipline that instills future agility over time as organizations look to take advantage of new capabilities in the performance system as their needs evolve.

Whether it’s new demands  for increased analytical performance reporting, fixed income attribution, or the need to quickly add on new methodologies such as providing clients with money-weighted IRR metrics (courtesy of the recent CRM II regulation in Canada), the complexity of the performance function only promises to grow in the years ahead. And the pressure on performance teams will mount as the relative calm of an extended upcycle transitions into a more volatile and less certain period for investors across all asset classes. A new performance solution can alleviate this pressure and allow performance teams to quickly deliver on the needs of the organization but it is important that the conversion be carefully planned and managed to ensure a smooth and successful migration.  Most organizations only get one chance to get a new system implementation right, so the process is paramount to ensure success.

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