Following my most recent blog on the panel discussion held at TSAM in London recently, I thought I would add some further notes on the discussion. We had talked about buzzwords used and then about data governance… The theme of the discussion then switched to the risks you’re exposed to from miscommunication of information or data – the commentary is really as you would expect:
• Fines from regulators
• …which can lead to brand damage
• …which can lead to loss of clients and mandates
• …which does lead to outflows
• …which does directly impact your bottom line
Of course, the point was made that you do not need be fined by the regulator to incur the spectre of spectacular outflows – poor data quality in client communications is enough to trigger this alone.
I related a specific story I had been told by a director of institutional sales at a prospect I met in not too distant past, who earlier that month had got through the RFP process for a serious eleven figure mandate, which would generate many tens of millions in fees. So having got through the RFP process, this manager clearly had the right risk/performance figures to meet the minimum hurdle for inclusion in the beauty parade process. The deal was lost though on one critical point – the data presented at the beauty parade on the sales deck was completely at odds with the strategy performance as listed in the RFP response, and yes, they did not win the mandate. If you are handing someone billions and billions to manage you need to build a relationship based on trust and transparency and having inconsistent/inaccurate data leads to total breakdown in trust.
The topic switched again at this point to how can we get IT and business working together more effectively on data management projects. This topic generated lots of interesting viewpoints, which I have summarized here in bullet form:
• Business often gets involved too late – something specific to IT led projects
• There is general consensus that business-led projects are more successful mainly as the requirements are understood earlier in the process
• The project analysts and the project manager need to have strong business domain expertise with a really good understanding of technology to bridge the gaps between two teams
• It is not easy to find analysts with good understanding of IT and business – panelists agreed that the more successful people are those who start in IT and move over to business side.
At this point the discussion started to wrap up after a few questions from the audience and each panelist gave their final thoughts on overcoming the challenges. My own thoughts were that the driver of data management projects is changing, it is no longer fear of fines, it is sales and distribution demanding timely and accurate data. Another viewpoint was that we have to do a better job to remove artificial differences between IT knowledge and business knowledge, greater effort is required to try and get people to understand each other’s point of view. As data management projects are getting more complex, clear objectives and accountability are key success factors, we have to get the right stakeholders involved and use the right language. Finally, one of the panelists said we should not see data governance as a cost!
It was a great session, and I really enjoyed sharing views with the other participants on the panel. I look forward to the next one in New York on May 16th.