The Enterprise Data Repository

This article explores the need for an Enterprise Data Repository (EDR) to underpin all the operations of an Asset Management company.

Too often, budget processes and short-term pressures cause tactical fixes that conflict with longer-term goals. The result is an increase in legacy systems, poorer service and rising costs. This article identifies changes you can make.

Most of you are by now at, or near, the end of the annual budget cycle. This year has been particularly tough because of the difficult economic background and unstable worldwide politics. The consequence has been a greater emphasis on value for money.

This presents opportunities and threats. Opportunities because it gives the power to encourage business users to really justify their demands and say ‘no’ to time-wasting users. Threats exist because the allocation of money to individual business units makes it difficult to justify or champion genuine infrastructure or knowledge developments that will benefit the organisation as a whole.

The typical IT budget:

– Top management lay down broad guidelines
– Managers clarify objectives, identify work programs and make broad estimations of their costs.
– IT review infrastructure and potential business developments.
– The draft budget items are consolidated which invariably demands more money than available
– A committee is established which adjudicates on budget conflicts. In reality there is a lot of arm- twisting.
– The budget is more or less agreed but rarely gets absolute sign-off.

Once the budget year starts, the business priorities and new regulatory issues/crises invariably sidetrack the organisation.

What do we need to do better?

We have to add a focus on ‘information’. We need to become aware of the use of client, account and other data. Armed with that awareness we can introduce processes that will lead to convergence of information.

There are seven key points that make a real difference to effective information management:

– Develop effective methods of gathering information needs
– Define a clear Information Architecture that can be easily communicated.
– Organise the IT department to focus on information management.
– Adapt the budget process so that it becomes a planning aid.
– Modify projects to satisfies functional goals and also information goals,
– Create a MIS project.
– Educate people

Some of these items are discussed in greater detail below.

The information architecture

It is essential people understand the information that is needed by the organisation and its external users. To achieve that we need an Information Architecture. The architecture has to be understood by both IT and end users. It therefore has to be constructed on two levels:

1. It must specify the underlying data subject areas in a way that can be implemented on a relational database. For this we can use conventional entity-relationship modeling tools and techniques. Example of data subject areas are parties or accounts.

2. It must communicate the view of the specific functional area. If we were discussing counter-party risk management then we would expect to see a diagram containing brokers, custodians as individual entities. These are views on the underlying database that implies that the architecture has a data transformation layer

General knowledge structures

Asset managers deal with individuals and organisations. The repository must have data structures that deal with organisations, individuals, work- flow and management metrics:

– People, organisations, contacts and roles
– Countries and currencies
– Calendars, time and time zones
– Processes, events and work flow
– Management and metrics
– Documents

Asset management knowledge structures

Next comes the specialist knowledge. The EDR must support all types of investment, service or wrapper that are used by the company:

– Accounts, portfolios, funds
– Models and benchmarks
– Products, services and agreements
– Cash, equity and fixed income securities
– Unitised securities
– Commodities, FX and derivatives
– Property, art, collectables and other assets
– Orders, allocations and executions
– Classifications and hierarchies
– Fee structures, accruals and invoices