axa im - investit conference -v malaval - 190707
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Data Management presentation - Investit 2007TRANSCRIPT
AXA INVESTMENT MANAGERS Investit Conference – Data Management
Identifying the Business Case for a Reference Data Project V MALAVAL Global Head of Data Management
2
AGENDA
LegalAgreementEmployee
Client&
Third partyNet Asset Value
DataManagement
Holding&
Transaction
Securities&
Market data Portfolio&
Product
LegalAgreementEmployee
Client&
Third partyNet Asset Value
DataManagement
Holding&
Transaction
Securities&
Market data Portfolio&
Product
The two key questions before starting the business case
2
Business rationale for a Reference Data Initiative in AXA IM
1
Getting buy-in from top management and the business
3
3
Business rationale for a Reference Data initiative AXA IM Challenges
Business model Focusing on investment performance via specialization and resource sharing
Specialized investment teams focused on specific investment areas where we can add real value for our clients
Teams are supported by shared resources (research, strategy, IT, Trading)
AXA IM Business Model
Fixed Income
Structured Finance
AXA Rosenberg
AXA Framlington
Equity Conviction/Talents
AXA Private Equity
AXA REIM
Hedge Funds
SALES, MARKETING AND
CLIENT SERVICES
AXA INVESTMENT MANAGERS (HOLDING)Finance, Risk Management, Legal, Audit, Compliance, Human Resources, Communications & Brand
SHARED RESOURCESInvestment Strategy, Trading, Operations, Projects, IT
INVESTMENT SOLUTIONS
INSURANCE INVESTMENT
Current Operating Model
Current Operating Model Based on vertical siloed applications :
Reference Data is embedded in Business Applications
No data ownership
Inaccurate, inconsistent & redundant data
Data access is complex
Decalog
Organisation & systems can not be in line with expected
level of Time to Market
LTOM vision Implement flexible & modular platforms
more adapted to AXA IM multi expert model
Is only achievable by the delivery of consistent data in a timely manner : The AXA IM DATA BACKBONE
LTOM*
“One fits size all” model is over
4
Business rationale for a Reference Data initiative Which data needs to be sourced centrally ?
An Asset Management company can be seen like a DATA factory It is key to show that all business processes even in different departments are using the same
core reference data
Stockbrokers Private banks Advisors Banks
5
The rationale for centralising Reference Data Which data needs to be sourced centrally ?
Distribution
DistributionPartners
InvestmentsAnd Operations
Sales & Service
Products, Valuation,
Performance,Investment
Commentary
WirehousesRegional FirmsIndependent AdvisorsBanks
Advisors
Sales Desk
Wholesalers
Content Production &Management
TransferAgent
Client
ShareholderServices
OnlineAdvisorService
ClientAccountServices
Subscriptions, Redemptions,
Transfers & Exchanges (Mutual Funds,
Managed Accounts)
InvestmentManagement
Sales Analysis &Strategies
ManagedAccountPlatform
Benchmarks Security analytics Security master Market data Position & cash External product data Performance returns
Counterparty data Settlement instructions Security data Fund accounting data Net asset values Position keeping data, cash Custodian feeds Client/account master Benchmark returns Historic performance
returns
Product master & categorization
Client & account master Positions, transactions, net
asset values, performance Fund flows / sales data Competitive analysis Prospective clients
Investment Data needs Operations Data needs Distribution needs
Common Data Subject Areas Product master Positions Transactions Security master
Benchmarks Net assets Performance returns Client & account master
6
AGENDA
LegalAgreementEmployee
Client&
Third partyNet Asset Value
DataManagement
Holding&
Transaction
Securities&
Market data Portfolio&
Product
LegalAgreementEmployee
Client&
Third partyNet Asset Value
DataManagement
Holding&
Transaction
Securities&
Market data Portfolio&
Product
The two key questions before starting the business case
2
Business rationale for a Reference Data Initiative in AXA IM
1
Getting buy-in from top management and the business
3
7
Two questions before starting the business case 1. Why is it so hard to invest in a reference data initiative ?
A certain project is expected to produce benefits, but will require capital investment
That same capital could be invested elsewhere, potentially producing a different set of benefits
How do I decide which project or projects to invest in?
His/Her Dilemma
“Things are working well today !” “I will be the last to benefit” “This service is not adapted to my
business” ”It will be quicker doing it myself”
And listening the business, choice becomes difficult…
LET’S TAKE TWO MINUTES IN THE CEO’S SHOES ?
A long term project Complicated planning A costly exercise High Risk
Looking at a Data Management, he/she sees :
8
Two questions before starting the Business Case 2. Why is it so hard to sell a reference data program ?
LET’S TAKE TWO MINUTES IN THE PROGRAM MANAGER’S SHOES ?
CEO
Corporate management, risk, profitability
Drivers
Demonstrate expected ROI to executives in a language they
understand and believe
What you need to do
• Explain & educate • Convince through external testimonials • Provide ROI & NPV study
How
BUSINESS
Time to market, leverage, data access, ownership
Drivers
Demonstrate added value by delivering “quick wins” in the
early phase of the project
What you need to do
• Stick to appropriate level of detail • Solve issues as they arise • Convince by quick win approach
How
TEAM
Recognition, proximity to business
Drivers
Demonstrate data management team is useful in the whole
company
What you need to do
• Educate & motivate your team to push the key messages on the ground • Focus them on added value tasks & encourage development of specialist skills
How
Challenge : Convince different players and understand intangible drivers
9
AGENDA
LegalAgreementEmployee
Client&
Third partyNet Asset Value
DataManagement
Holding&
Transaction
Securities&
Market data Portfolio&
Product
LegalAgreementEmployee
Client&
Third partyNet Asset Value
DataManagement
Holding&
Transaction
Securities&
Market data Portfolio&
Product
The two key questions before starting the business case
2
Business rationale for a Reference Data Initiative in AXA IM
1
Getting buy-in from top management and the business
3
10
First step : MANAGE EXPECTATIONS Explain where the main benefits are
Near- term realizable
Longer term realizable
In business Cross business
Size of circle indicates relative
importance
Quick win approach
Better regulatory compliance
Greater organizational efficiency
Enhanced management information
Trade failure/STP improvements
Improved revenue generation, cross selling and customer retention
2 years IT investment avoidance • Data feed rationalisation • Potential for application de-commissioning
Priority drivers for near- term cost adoption
• Efficient Corporate management
• Improved quality of the data
• Revenue generation and client retention
• Minimizing regulatory risk
• Cost reduction
11
Second step : BE STRATEGIC Link the reference data initiative to your company strategy
Our company strategy : Be the preferred asset manager for our client, having a multi expertise offering This business model, to be flexible, will be supported by dedicated front office platforms and new risk management tools
Not centralising core reference data will imply duplication of data, data quality issues, an increase in manual processes and additional costs
The reference data initiative is seen as the “Glue which holds things together”
A Multi Expert Business Model Supported by a flexible Operating Model
Don’t sell the initiative alone! It is part of global review of your Organizational architecture.
Fixed Income
Structured Finance
AXA Rosenberg
AXA Framlington
Equity Conviction/Talents
AXA Private Equity
AXA REIM
Hedge Funds
SALES, MARKETING AND
CLIENT SERVICES
AXA INVESTMENT MANAGERS (HOLDING)Finance, Risk Management, Legal, Audit, Compliance, Human Resources, Communications & Brand
SHARED RESOURCESInvestment Strategy, Trading, Operations, Projects, IT
INVESTMENT SOLUTIONS
INSURANCE INVESTMENT
Human Resources ( Peoplesoft )
Profitability Analysis (FRISBE)
Procurement (ARIBA)
Communications
CRM
Communications OM
Support Functions OMs
Dat
a A
cces
s Fr
amew
ork
Inve
stm
entD
ata
Mar
tS
ales
& M
arke
ting
Dat
a M
art
Sup
port
Func
tions
Dat
a M
art
Sales, Client Services OMs
Decision Making Tools(Market Outlook, Risk exposure …)
Manufacturing OMs
OSSM OM
Trad
eS
uppo
rt : G
TM
Ass
etS
ervi
cing
: RK
S
Fund
Acc
ount
ing
: GP
3 (F
R),
Sim
Cor
p(D
E) M
CH
(UK
)
PM
A :
HiP
erfo
rman
ce
AXA
IM D
ataW
areh
ouse
: ED
W
M2EData
Distribution
Client Reporting
Marketing
Marketing OM
Ext
erna
ldat
a pr
ovid
edby
SS
C
Mar
ketd
ata
Blo
om, R
eute
rs
AXA
IM d
ata
Risk Management (VAR, Counterparty Risk …)
Order Capture
Trade Compliance
Trading & Stock lending
Trade Flow ManagementPortf Controls : NAV Validation, Corp. Actions …
Third parties
EQ FI SF
IS HF P/E
12
Third Step : CHOOSE YOUR ROUTE Select the approach suitable to your company culture
Top-down Strong top management mandate Program is seen as mandatory
Advantages
Strong sponsorship LT direction clearly designed Changes are more readily adopted
Disadvantages Takes more time Need to resell the initiative
2 PRACTICES : TOP- DOWN & BOTTOM-UP APPROACH
Bottom-up Quick win model , where business
sees measurable results
Advantages Practitioner involvement and ownership Better time to market delivery Business value
Disadvantages Lack of executive-level authority and
direction Possibility of fragmented solution Inconsistent sponsorship
Any strategic/LT decisions & priorities are taken at the Management Board level But daily support has to be found at business level with :
Delivery of some quick wins (10 were undertaken in 2006, 4 completed in 2007) First deliverables are launched with our Business Champions (Sharing vision, High
profile service) Usage of prototype and proof of concept period to convince that service is better
We use both approaches
13
Fourth Step : CONVINCE The ROI study
Different scenarios can be studied. In AXA IM, we worked on three different options : Build an in-house data management platform, buy a software solution or outsource
Estimates were done on a five year period Savings should be measurable and credible to top management We used an external organization to validate our figures and approach
Payback : 5Y Payback : 3,5Y Payback : 3Y
In House Software package Outsource Final CEO decision taken in December 2006 is to invest in an internal data management team, supported by a software solution
20 to 25%
System retirement
10 to 20%
Improved data quality Focus on added value tasks
15 to 20%
Common & shared distribution layers Higher standards
15 to 20%10 to 15% %
Automation & optimization of data feeds Reduction of bespoke databases
Common source sharing Standardization of interfaces
AXA IMReduction
Drivers
20 to 25%
System retirement
10 to 20%
Improved data quality Focus on added value tasks
15 to 20%
Common & shared distribution layers Higher standards
15 to 20%10 to 15% %
Automation & optimization of data feeds Reduction of bespoke databases
Common source sharing Standardization of interfaces
AXA IMReduction
Drivers
14
Fifth Step : IMPLEMENT THE VISION The key building blocs
Data Management key Implementation
Enablers
Platform selection & implementation
Clear strategic plan for business and partners
RO
I
Time
Validate the Business case
Change management : Define & implement new business processes
Define quick win, & LT roadmap
Q3 07 Q2 08Q4 07 Q2 09Q4 08Key Activities Q2 07
SMF implementation –ThinkFolio Pilot
SmartCo Implementation
Development
of all Data sets for ThinkFolio DMT
UAT phase
Production
UAT Tests
Q4 09
ThinkFolio fed by SMF
SMF implementation –
All DMT Deployment
Sophis/Sesame deployment
Capstone Suite deployment
Other DMT Deployment (TBC) Decalog retirement
CTP implementation –Client View Pilot
CTP Master fileIn production
Client View CRM connected
Axa Rosenberg CRM connected
CTPimplementation –
All CRM Deployment
Finance systems connected
Axa REIM CRM connected
SFD CRM connected
GAT
E 3
Appr
oval
July
Service Approach
(KPIs, SLA)
15
2006
2007 - 08
2009
Resource Team Building Resource estimates Define the service framework
• Define a LT resource plan • Role and responsibilities need to be clarified • Start producing simple KPIs
Business Case ROI study
• Identification areas of key savings • Makes the initiative credible • Necessity to resell the business case again
Sixth Step : MAKE IT HAPPEN The AXA IM phases
Vision Set up the vision & key principles
• Will help to stay the course • Set up the principles to push alignment inside the company
Delivery Start with your business champions
• A end to end approach : Delivery of a central repository with distribution to business applications. • Quick win (small delivery, local administration)
Processes Adapt the processes
• Integration of change management on business processes is part of the reference data initiative
Manufacturing Pursue full data distribution
• Central data repositories are in place. • Need to push the data • System retirement can start
Full Data Services Internal SLAs in place
• Internal SLAs have been built and agreed • KPIs understood by the business are in place
16
Getting buy-in for the business case What’s the magic formula ?
Even if plans are big, show manageable deliverables
Calculate the ROI and transform your project as something incontrovertible
Formulate an approach to sell the business case and put it into practice
Educate business to recognize the importance of data by linking it to company strategy
17
Conclusion
Time
Func
tiona
lity
Adoption
Extension
Ongoing Optimization
Enablement
2006
2007
2009
Sell business benefits • Take the time to communicate • Keep it simple
Gain & Maintain Top management support • Sell, and resell the business case
• Deliver quick wins, but adhere to the deadlines
• Explain that business value will take time
Start now and use a phased approach
• Prepare a ROI Study • Anticipate business process change • Select your data management
architecture • Define your service led approach
(simple metrics & SLA implementation )
Be excellent
2008