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Organizational Structure and the Performance Team of the Future

Risk, Performance, and Reporting

By Dean Mcintyre  |  August 22, 2019

Today’s performance teams are focused on providing indicative on-demand diagnostics to inform the front office’s strategy and conducting official performance measurement for reporting. However, pressures surrounding data, regulation, and the way teams are structured are changing these teams as we know them. To understand the state of performance and how teams are responding to these new pressures, FactSet partnered with Coleman Parkes to survey 100 Heads of Performance across Europe, the U.S., and Asia.

One of the major themes revealed by this survey was the ongoing effort to streamline performance teams by integrating them with other groups and updating hiring strategies to reflect today’s needs.

Departmental Makeup: Functional Process Merging is the Future

Based on our conversations, it appears Heads of Performance see a united front between performance, risk, and reporting as a means to cope with increasing front-office demands. Outside of any cost discussion, data concordance is pivotal for the industry. As teams move from a large data landscape to a more streamlined process, reducing the TCO will mean partnering with fewer vendors. But how does this reflect within the groups using the same core data process?

The C-Level seems to be interested in cost saving via efficiencies in process and bringing multiple functions under the same leadership. On the other hand, the leaders of the groups most likely to integrate talk more about streamlining the core process of loading, cleansing, and maintaining data and results. One specialist team serving multiple groups and understanding the specific needs of risk, performance, and reporting seems to offer an obvious path to drive efficiency.

However, if the benefits of integrating teams are obvious, the integration isn’t happening with similar enthusiasm. More than 80% of those surveyed have not yet merged with other teams. Even where groups have integrated, many report problems. According to the survey, 45% fear the perception of the role of performance could be negatively impacted if merged with other functional groups. Is this a result of the perceived diminishing value of a position if you make team members “jacks of all trades and masters of none” or is the idea of merging performance (which looks for the abnormal in the normal) and risk (which looks for the best guess or the normal in the abnormal) a challenge most are not prepared for?

However, if the benefits of integrating teams were obvious, the integration isn’t happening with similar enthusiasm2.png

It’s possible that the speed of merging cross-functional core processes is being hampered by the challenges of delivering month-end data as well as answering the increasing demands for diagnostics in the front office. The survey also found that 46% of respondents said they were concerned that their company does not assign sufficient resources to performance measurement.

The Way Forward

It’s pivotal in an environment with shrinking fees and higher demands to accept change, as standing still in a fast moving world can leave you in the darkness. But that does not mean you should blindly follow others. Ask questions of your company ethos, understand the best use of the people you have, and learn how your team would benefit from a better core data process and workflow. There is no golden ticket, but the performance/risk/reporting teams are the front line to clients. If you merge groups or processes, know that delivering consistent, concordant data to your consumers should be paramount and will help all groups build trust. 

Past the opportunities and hurdles presented by integrating the performance team with other functional subgroups that support the front office, our survey also identified pain points for these teams surrounding technology adoption, workflow enhancements, and the hiring practices.

For more about these trends and how the performance team must adapt, download our eBook: The Performance Function Reshaped: The Teams, Technology, and Workflows of Tomorrow

This story originally ran on November 11, 2017

the performance function reshaped ebook

Dean Mcintyre

Vice President, Senior Director, Portfolio Management Business Development

Mr. Dean McIntyre is a Senior Director, Portfolio Management Business Development at FactSet. In this role, he is responsible for the growth, direction, and go-to-market strategy for portfolio management solutions, focused on new technology and capabilities for the portfolio manager. He has over 20 years of experience in the financial industry, primarily as an investment performance and risk practitioner but also in strategy, sales, client services, and product development. Prior, Mr. McIntyre has held senior positions with vendor and investment management companies including UBS Global Asset Management, Bloomberg, BISAM, Northern Trust, and Schroders.