As discussed in my previous posts, to meet the demands of the future, the performance measurement team must reconsider many of its longstanding hiring and technology approaches. However, yet another challenge comes from a team’s management of data, the volume of which has increased in lockstep with the pressures impacting these teams.
With more and more data requests coming in from fund managers, performance teams are struggling to respond to ad hoc demands. “It’s the misperception of how easy it is to produce some of the numbers—as people ask for things and they don’t know how much time is required to produce the information, thereby putting pressure on the team. They expect quick and accurate turnarounds,” said one Head of Risk and Performance in the UK during the survey.
Coping with Data Overload
According to our survey, almost half (49%) of Heads of Performance say data is too dispersed across the business for them to provide what is needed. Additionally, 51% sat their greatest conerns regarding the change of systems is disruption. As such, effective management of data emerges as a major issue for Heads of Performance.
As it stands, performance teams are coping with day-to-day reporting, but adding the incremental value asked of them has proven more challenging. Challenges are caused by the need to manage client expectations, a lack of knowledge by end users on how long it takes to produce reports, plus resourcing and systems issues.
Understanding the needs of every performance data consumer is key to an efficient performance team, which is not only responsible for providing “true” performance numbers and added value services, but also governance concerning what is ethical/correct use of performance and diagnostics. Multiple sources of return and attribution data adds risk that governance and validation can be lost, and removes certainty that what is seen by clients and prospects is accurate.
Efficient and appropriate workflow management is an immediate and straightforward option for addressing the problems faced by performance teams. In general, it requires no extra cost and can deliver real efficiency improvements. That being said, the rise of indicative front office analytics could dilute the “one true source” of performance reports. Left unchecked, this could lead to a lack of faith in performance reporting and the acceptance of content that is “less true” than in a single source scenario.
Dean has more than 15 years of experience in performance measurement and risk analytics, primarily as a practitioner but also in sales, client service and product development. Within his role at FactSet, he is responsible for directing performance strategy with the goal of adding rich and robust middle office performance functionality and services to existing products. Dean previously served as global head of product at Bi-Sam.