The Data Management Lifeboat

The Data Management Lifeboat
Anna Yegorova

Are you drowning in data? The sea of facts and figures may seem opportunistic and encouraging: surely there must be something rewarding hiding in the research! As we regularly rely on technology to track and auto-populate data, we’ve become victims of improved technology for data population and tracking – many of us are drowning in data from disparate data sources.

Data does not equal information. Just because a firm has collected a tremendous amount of data does not mean it has the ability to use this data efficiently. Data needs to be normalized and analyzed to find information that leads to the competitive edge in making a decision. The puzzle pieces that make up this information may be hiding in the stack of data, but where are they and how long will it take to discover them, and then purpose them into a consumable format? What if a competitor discovers them first? The longer the key pieces of analysis take to find, the less valuable the information becomes.

Accurate, accessible, and relevant data is crucial to the success of an alternative asset management firm. Having the right data in your hands at the right time enables you to make the right investment before your competitors do. Often the process of consolidating data into analysis to determine actionable steps is dependent upon a complex and inconsistent process. Delays result in missing investment opportunities, frustrated employees, and wasted time.

State Street’s 2014 report,        Chasing Alpha: How Data and Analytics Help Alternative Asset Managers to Outperform the Pack, reveals that there is a gap in the industry between companies using data to gain a competitive advantage and companies who fail to achieve benefits. Only 23 percent of the 81 alternative asset managers surveyed fell into the “data leader” category (page 8). There is a clear tier of alternative asset management firms running ahead with the valuable information while the rest are struggling to keep up. This report also shows that “only 16 percent of alternative asset managers in the survey strongly agree that their data and analytics capabilities are keeping pace with the growth of the business” (page 10).

State Street offers words of wisdom to firms who struggle with managing data. State Street’s “Five Building Blocks of the Data-Driven Business” advises firms to invest:

Make data easily accessible and standardized for easier analysis

  • Provide powerful and customizable reporting tools
  • Mandate that systems and reporting tools support compliance rules and regulatory requirements
  • Ensure preparedness to act fast on investment strategies
  • Develop a scalable data strategy that grows with the business (page 12)

These recommendations are essential for firms who are spending too much time on data aggregation and standardization, and missing out on opportunities under the waves of data. Finding the applicable data, analyzing it, representing it appropriately, and acting on it in time for all this effort to be profitable is best achieved with the right tool.

Industry-specific investment management systems are the filters to parse out the endless waves of data, and provide the platform for actually purposing your data into your competitive edge. Firms with an established data aggregation system and process have more time to focus on the most promising investments to make a well-informed decision at the ideal time, rather than struggle to find a direction from the sea of data.

Is your team spending more time entering and sorting through data than they do taking advantage of investment opportunities? Research Management Software is key to handling this data in a timely, organized, and logical way. Learn how you can improve your research management through automation in our free whitepaper: 7 Core Features of Research Management Software.