What Every HR Department Must Do in Workday to Ensure a Smooth Start to the New Year

There are five main activities that need to be done in Workday at year end  / beginning of the year to ensure the smooth running of a business. These simple tasks are often overlooked – particularly by those new to Workday – but can have a negative impact if not done.

There are five critical tasks that Workday companies should undertake around the year-end / new year time frame. Individually, these are simple tasks but can significantly impact your HR operations if not completed in time.

Year-end activities come thick and fast, and it is easy in the last month of the year to forget to undertake some essential tasks. FinServ Consulting has identified five essential tasks that every HR department must complete to guarantee a smooth kick-off to the new year. Lack of action on these tasks could create unnecessary errors or preventable breaks in your operations, causing a lot of unneeded January headaches.

These five areas are:

  1. Scheduled Processes – (integration, reports, alerts) and Period Schedules (payroll, time off, time tracking) must be reviewed and set up / extended manually. Scheduled processes can be set up in advance up to five instances in a new year. Period schedules can be set up for up to two years in advance.
  2. Delegation Review – A review of delegation assignments ensures that they are correct and that expiration dates are extended. This will avoid the Workday inboxes of executives filling up with tasks that generally would be delegated.
  3. Compliance Activities – Review what compliance requirements are pending for the new year, including mandated data purging and verifying employee compliance with company policies.
  4. Corporate Document Updates – A review of employee documents like the corporate handbook, benefit plan documents, and company policies will ensure that they are updated and properly linked to in Workday.
  5. Time Off Calendar and Balances – Update the upcoming holiday calendar to ensure that employees can successfully request time off. In addition, review time-off balances that are carrying over to ensure accuracy.

 

#1 – Scheduled Processes and Period Schedules

Scheduled processes allow you to automate processes on a schedule (i.e. daily, weekly, monthly), such as an integration with your medical benefits provider or payroll processor. These schedules are typically set up in advance but must be maintained annually. They cannot be scheduled indefinitely and can usually be set for up to five scheduled instances in the following year.

Suppose your payroll file is not sent to your payroll provider because it is no longer automatically scheduled in Workday. In that case, the HR team risks a highly visible and potentially catastrophic mistake.

Period Schedules standardize the sequential periods you use to track absence or payroll. These period schedules also need to be entered and maintained manually and can be entered up to two years in advance.

Not setting your future period schedules can prevent employees from requesting time off or prevent you from processing the next pay run. Like the Scheduled Processes, not maintaining Period Schedules is an easily preventable error.

 

#2 – Delegation Review

Tasks are often delegated in Workday, usually to assistants of senior executives. Senior executives are generally crucial control points to granting approvals for time off requests from their subordinates or approving high-value expenses and invoices. Executives usually do not have the time or inclination to go into Workday consistently and approve these requests.

Delegating these tasks to assistants allow the tasks to be completed in a timely and consistent manner. These delegations do have expiration dates and need to be reviewed annually. Letting delegation settings expire can result in a senior executive’s Workday inbox being flooded rather than the tasks going to the correct delegated employee for processing. If the executive is not looking at their Workday inbox, critical invoice payments may not be approved, leading to unnecessary late payment penalties. For example, Market Data vendors’ unpaid invoices may lead to unnecessary late fees or, even worse, denial of critical data that the business requires.

As administrative permissions have time limits, it is easy to set them and forget them until something goes horribly wrong.

 

#3 – Compliance Activities

Data purging and employee compliance are two of the essential resets needed at year-end / beginning of the year. This means verifying that everyone has signed the required employee and corporate policy documents such as the employee handbook, Covid / return to work attestations, restricted trading policy attestations, and other necessary documents.

As these documents are disseminated throughout the year, it is easy to lose track of whether they have been reviewed and signed off on by all employees.

The time surrounding the new year is a natural time to conduct a holistic overview of the status of the firm’s overall policy attestations. For example, employees may be required to attest to understanding the code of ethics or conflicts of interest policies. Ensuring that these policies are enforced and that enforcement is tangible is key to assuaging any concerns of regulators or potential investors.

This time is also an excellent time to review how well the firm is in compliance with data retention and purging regulations. For example, the European Union’s General Data Protection Regulation (GDPR) stipulates that personal data is collected for legitimate reasons and is only kept if needed. Because of these regulations, companies will need to place greater scrutiny on terminated employees and their personal data. The HR or compliance departments must be vigilant in reviewing this data and determining if there is a legitimate reason to continue storing it in Workday.

 

#4 – Corporate Document Updates

Corporate documents such as employee handbooks, benefit plan documents, and policies can get out of date quickly as policies evolve, such as Diversity and Inclusion and Remote Work policies. In addition, the companies’ benefit providers often change, or the company changes the plan offerings themselves. The document file itself can change from content updates to file name changes or file location changes. Once this happens, the reference link in Workday may no longer work and inevitably lead to errors during any attestation process or during an employee onboarding.

Checking that the latest document versions are set up in the system should be part of any end of year to new year process. Multiple or outdated versions of documents can cause problems; ensuring that only one version – the latest – exists is essential.

Performance review templates are another area to double-check along with offer letters and other templates used throughout the year. These templates can change. Since they impact all employees and prospective hires, it is critical to be consistent and accurate in what is shown. If these templates link to external documents or are set to send information to vendors, it is vital to make sure that the links still work.

 

#5 – Time Off Calendar and Balances

A simple task that can cause many headaches is ensuring that next year’s calendar includes the correct dates for holidays. Different localities and regions may have special holidays, and observed holidays change from year to year. These are not automatically loaded into Workday; they need to be set up every year manually. This is particularly important for companies with international offices where the holiday dates may differ.

The time around year-end is also a good time to get ahead of nuances in the calendar for the upcoming year to give you more time to be prepared to address any employee concerns. For example, most financial services firms follow the stock market’s holiday schedule. At the end of 2021, the stock market is not observing New Year’s Day 2022 as a holiday since it falls on a Saturday. Usually, the holiday would be observed on the preceding Friday. But, because Friday is a key accounting period (year-end / quarter-end / month-end), the stock market will be open. Try explaining that on New Year’s Eve when this calendar quirk dawns on your employees.

Another critical activity for year-end is to check your employee’s time off balances due to carry over. Carry-over balances should be checked for accuracy; this will ensure that your time off eligibility and carry-over rules are correct and that an unexpected employee type / setup is not breaking the time-off rules.  Unused time off that can be paid out will need to be appropriately reviewed and loaded into payroll.

 

Conclusion

Overall, it is best never to assume that these essential tasks have been completed. Much of what needs to be done annually is common sense, but HR and Operations teams often overlook these additional inputs / actions in the crunch of a busy fourth quarter.

FinServ Consulting has found that many clients outsource support for these activities after they have experienced one of these painful events.

Whether you choose to seek our support or not, we hope these top tips help you avoid any adverse effects on your company’s operations. Getting to grips with these tasks early and on an annual basis will save a lot of time, energy and headaches in the coming year.

To learn more about FinServ Consulting’s services: info@finservconsulting.com or (646) 603-3799.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

How FinServ Helps Funds Optimize Their Operations

Operational assessments provide an opportunity for asset managers to objectively evaluate current operational structures with an eye toward improving operations. Today’s environment — characterized by hybrid work structures and new strategies focused on investments in cryptocurrencies and other alternative assets – means that managers need to initiate these assessments to ensure that existing systems and processes are aligned with long-term operational goals.

There are many reasons for an asset management company to undertake an operational assessment. The most common are that firms grow assets under management, change or add the types of assets traded, expand the range of strategies and/or funds it manages and have a more complex investor base with different requirements for shareholders. All these changes mean systems and processes set up at the beginning of the firm’s life cycle may no longer be fit for purpose.

FinServ Consulting leverages all its experience and expertise gained in working with similar funds or businesses to help support its clients in this exercise. This has given the company unique insights into how assessments can be conducted and what asset management firms will gain from the process.

Identifying Problem Areas

The first step in the process is to look at and analyze an investment firm’s full operations and processes to identify inefficiencies that are holding back the growth of the firm. This process can also reassure investors that the firm is doing everything it can to use its resources effectively while at the same time having processes and controls in place to ensure that operations from front to back office are running smoothly and are fit for the present as well as the future.

The assessments can highlight a variety of areas where firms may want to make changes. This strategic initiative looks at how technology is being used, whether service providers deliver in the most effective way and if teams are structured for optimal efficiency.  The review can expose bottlenecks, suggest areas where best practice can be implemented and show how to streamline a business. Ultimately, a target operating model is defined and presented with a path to get there.

Although operational assessments are routinely conducted by many firms, lately there has been an increase in requests for these evaluations. This is due to several reasons. For example, because of the pandemic, some technology investment has been delayed however, firms have only grown in complexity. Inefficiencies caused by manual processes may be exacerbated as the fund grows its assets under management (AUM).

Many firms still use Excel or have many operations done manually when there are more eloquent automated solutions available. The frequency of this can be a direct result of the infrastructure set up at the beginning of a firm’s life cycle. As it grows, those processes may no longer be adequate, particularly if it has experienced changes in the types of asset classes traded, the size and volume of trades or other factors. These factors mean existing infrastructure is less optimal. The systems used at the start of a business may not be scalable or the most efficient as it grows.

Identifying Where Efficiencies Can Be Made

Once the parameters of the operational assessment are established, everyone involved in a specific process in a fund are interviewed using a set list of questions. This helps identify ways to streamline work – such as trading workflows.

For instance, portfolio managers do not always have all the information they need at their fingertips. There may be a lot of manual work before a trading decision is made. Interviews with portfolio managers, traders, operations, finance, and anyone from the technology side involved in these processes are interviewed to identify areas where there may be ways to update work streams or plan for future expansion.

A list of predetermined questions also gives the conversations a focus and helps identify areas of inefficiency that can be improved.

The resulting list of projects – ways a firm can change processes, technology and even people to be more efficient – can be daunting. These projects can be small or large, complex or simple, easy to implement or difficult.

While it is always up to the firm to decide which projects it wants to tackle in the short or long term, some like to focus on quick wins that may be relatively inexpensive while others put together a program aimed at gradual transformation of processes and procedures.

FinServ Consulting has developed a project impact/effort matrix that helps identify which actions will have the most impact on the business while also judging the difficulty or complexity in implementing these compared with those that are much easier to do but have less overall effect on the business.

This assessment is a snapshot, giving the firm an overview of inefficiencies and what the impact of fixing them will be. Quick wins could include things like reorganization of the folder directory, discontinuing daily reports or giving Bloomberg access to more people. Key improvements that may take longer to implement might include hiring more people, like a tax director, implementing new systems like a portfolio management system (PMS) or a data warehouse.

The addition of new strategies and funds may also put a strain on existing infrastructure. Likewise, the introduction of managed accounts, funds of one or onshore/offshore structures to accommodate a wider range of investors will necessitate different procedures and processes.

Operational due diligence by investors can also identify red flag areas where improvements need to be made.

 

A Path Forward: Recommendations

At the end of the operational assessment there are usually five to six strategic areas where change is recommended. These range from relatively inexpensive projects to more long-term changes.

The assessment gives a timeline and costs to help firms make decisions on what to tackle first and what it may want to consider in the longer term. It is the firm’s decision what to do next and how.

By using FinServ for this exercise, unlike other consultants, the job does not end at giving the firm recommendations. FinServ is available to help implement all the suggestions, provide assistance in choosing the right technologies, service providers, processes and procedures to ready the firm for present operations as well as for the future.

While the operational assessment does not look at whether and how a firm might go into another business, like loan servicing, the process does look at operations where targeted improvements will make jobs more efficient and scalable. Some growing firms worry that every time they add a new fund or strategy, they will need to hire more persons, adding to the costs and making it difficult to scale the business. For them, outsourcing options and third parties that can assist them and make more staff unnecessary may be better options than adding to the employee list.

Assessments are also made on third party providers, like fund administrators. By looking closely at what a fund administrator provides, they could request more services and gauge whether the amount of money the administrator is charging is close to the costs for similar businesses. The assessments are holistic, looking at all the processes of the entire firm.

Whether the need for an operational assessment is necessitated by operational due diligence by investors, a more complex investor base, firm growth or just a health check after a few years of operations, the process is geared to help tighten processes and procedures, streamline controls, and get the firm to the desired future state where it is capable of being more efficient and making more informed decisions. A fund’s infrastructure should never dictate what trading strategies are permissible or impede a business decision.

Even firms that believe they are relatively straight forward as they only do a small number of investments or trades may be challenged by the complexity of regulatory filings, the different types of data needed for a variety of purposes and a complex investor base.

 

Conclusion

FinServ Consulting, with years of experience working with a wide variety of asset managers, brings its knowledge and expertise to the operational assessment process – and does not leave the client with a list of “to-dos”. It helps in the implementation of the suggestions to create a firm fit for purpose now and in the future.

To learn more about FinServ Consulting’s services, please contact us at info@finservconsulting.com or (646) 603-3799. 

 

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

FinServ Opens New India Office with Middle & Back Office Outsourcing Offerings

FinServ Expands Global Presence with India Office.
The New Office Enables Better Service to Fund Clients Amid Increased Demand for Support Services & Solutions.

FinServ is pleased to announce the opening of a new office in Mumbai, India. Shaurin Jobalia, who has worked with leading hedge funds and alternate asset management firms globally, will lead a growing team in India, which has more than two decades of collective middle- and back-office experience in fund accounting. The Indian team includes professionals who have previously worked at industry-leading firms such as Enfusion, SS&C Technologies, GlobeOp, Morgan Stanley Fund Services, and Bank of America.

The office will serve funds in a broad range of areas, including:

  • Assisting with daily trade positions and cash reconciliations with custodians, prime brokers, and fund administrators.
  • Providing break analysis for any issues
  • Assisting with corporate actions and swap financing accruals and setup.
  • Providing complete shadow NAV with clients’ third-party administrators, including balance sheet and income statement reconciliations.

FinServ’s Managed Services aims to provide fund managers with customizable and scalable solutions to tailor their firms’ operations.

The opening comes at a time when two key trends are converging. First, alternative asset managers are under increased pressure to reduce costs. Fees fell to new lows in 2020 according to Hedge Fund Research, as investors pulled roughly $46 billion from funds.  Secondly, COVID-19 has disrupted day-to-day operations and provided a new set of challenges for asset managers in keeping their businesses functioning effectively. A silver lining has emerged, however. The global pandemic has accelerated the use and adoption of remote workers among fund managers.  With teams working remotely, managers have leaned on service providers and recognized that they can support operations and technology through outsourcing.

With a team in India, FinServ can meet those requirements and deliver new benefits, such as reduced costs and more flexibility. The FinServ team is unique as they bring systems expertise which allows for detailed analysis and problem solving.  In addition, the team is staffed by experienced resources that have a deep understanding of different asset classes.  If a fund trades equities, credit or privates, the team brings the appropriate knowledge to assist in the processing.  By leveraging the team, funds can efficiently scale their operations by eliminating the need to increase headcount for non-core activities, or job functions.  The new India office will support FinServ’s core consulting business across specialized middle and back office managed services, software customization and implementations, industry systems integrations, and bespoke systems development.

At a time when funds are accustomed to receiving what has historically been a commoditized service, FinServ’s team takes it a step further. The teams are well-versed in each client’s unique needs and deliver on those requirements through both a hands-on and customized approach.

To learn more about FinServ Consulting’s services, please contact us at info@finservconsulting.com or (646) 603-3799.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

The Great Debate: Agile or Waterfall Project Management

Effective Project Management

Effectively managing a project and team(s) is a difficult task that faces increased challenges in a remote environment. Obstacles are exacerbated by the lack of in-person collaboration and the inability to stop by a colleagues desk for a quick and informal update. However, selecting the correct project management methodology can help alleviate numerous issues and ensure that your project is completed successfully.

 

Agile & Waterfall Methodology Overview

No project management technique is best suited for all situations. The most common methodologies are Waterfall and Agile. Although both approaches are popular and have been around for an extended period of time, specific projects are better suited by one or the other.

The Waterfall methodology is the traditional and sequential approach that is best for projects with a well-known scope likely to experience minimal change. Client input takes place at milestones as the project transitions throughout the various phases. In a Waterfall project management strategy, each phase must be completed prior to transitioning to the following phase. These phases are clearly outlined and define clear objectives that must be accomplished before progressing.

As indicated by the name, an Agile methodology is designed to accommodate change. Its iterative nature focuses on completing certain objectives by the end of a specified time period known as a sprint. Agile methodologies are well suited for projects with unclear initial requirements. The methodology prioritizes the most important aspects of a project and relies on continuous client input throughout the engagement. Deliverables are reviewed by the client and other applicable teams after their corresponding sprint. 

 

Advantages of Each Method

The Waterfall approach’s numerous advantages derive from its structured nature. The first of which, is that it clearly defines all aspects of the project and ultimately increases planning accuracy and detail. Consequently, this approach aligns well with fixed price contracts and government entities. Furthermore, progress can be measured through the completion of each phase as opposed to a product backlog that hasn’t been addressed.

It is less reliant on client input because it is predominantly collected at milestones. This allows the client to take a hands off approach and focus on the day-to-day operations of their business. Finally, successful completion of projects managed with a traditional methodology ensures that all items are addressed and eliminates ambiguity.

One of the greatest advantages to the Agile approach is its flexibility. An Agile approach is particularly useful when the project’s timeline is strained because it prioritizes the most important features. The sprint structure aligns with Time & Materials contracts because sprints are predetermined timeframes that specify workload.

Additionally, constant client interaction augments quality via increased feedback, additional testing, and dynamic user requirements that account for evolving needs. The constant nature of client feedback allows for frequent modification of the product backlog. This is particularly useful for a technical client that wants to get a deeper understanding of the solution. They can work through their use cases and determine if their needs will be better served by an alternative route. 

 

Disadvantages of Each Method

Although each method is effective in its own right, they are not without disadvantages. The Waterfall methodology requires a thorough understanding of business requirements prior to beginning. The Project Manager must have a clear sense of all client needs and initially account for them throughout the various phases. Scenarios where the client is unable to provide a comprehensive overview of the requirements may force the PM to “fill in the gaps” – which is far from ideal.

Another disadvantage associated with the Waterfall approach is the risk of a final deliverable that is not in line with client expectations. Given that the client is less involved in the process, they may be surprised by the end result. However, the traditional approach hedges against this with comprehensive requirements and periodic updates.

Agile method drawbacks tend to be associated with one of its strengths, frequent client input. It requires a significant amount of coordination and cooperation across multiple internal and external teams. While this is great in theory, it may be difficult in practice. Clients may not have the resources, interest, or expertise required for the Agile approach’s mandated involvement. This is especially relevant when the client outsources the work as they hired another firm to step away.

The adaptability of the approach leads to many changes in the project’s scope. These changes affect the project’s cost and timeline. Unfortunately, this is not feasible for certain clients and situations. Moreover, low priority items may not get completed within the original time frame due to a focus on high priority items.

 

Conclusion

In conclusion, both the Waterfall and Agile Project Management methodologies include pros and cons. In an ideal scenario, the project would be completed successfully regardless of the utilized approach. However, certain client types, engagements, and solutions are better suited by one of the two methods. It is critical that you discuss both options with the client and pick the one that they are most comfortable with. Many professionals blend the two techniques to benefit from each’s strengths while minimizing the drawbacks. Recent trends have increased popularity for Agile management, but it is beneficial to gather all available requirements as early as possible.

 

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

Technology Sets Its Sights on Private Equity

The evolution of technology and its impact across various industries has become widely accepted, particularly for Financial Services. However, Private Equity’s acceptance of new technology has lagged behind other subsectors. Resistance is subsiding as Private Equity Funds are rushing to adopt Client Relationship Management (“CRM”) tools, utilize unstructured data, and transition to the cloud.

 

Relationship Management

Success within Private Equity is reliant upon strong and enduring relationships that are difficult to manage without the proper infrastructure. Scattered data paired with a lack of centralized oversight can serve as a catalyst for inefficiencies that hinder deal execution and frequency. Efforts to combat the before mentioned issues have given rise to the popularity of CRM systems. Furthermore, numerous CRM solutions can be configured to streamline reporting and eliminate user error.

Although the absence of a CRM system can be detrimental to a firm’s success, a poorly configured system that fails to meet user requirements may be worse. Inadequate systems are generally accompanied by a lacking implementation partner that failed to assess the organization’s needs prior to vendor selection. It is crucial to enlist the services of an experienced implementation partner that has “been there, done that”.

 

 

FinServ has successfully implemented CRM solutions for countless Alternative Asset Managers and Financial Institutions. Not only are we a Salesforce Partner, but we also have significant experience with other industry CRMs such as Backstop, Clienteer, and Dynamo. FinServ can walk you through the entirety of the process by gathering business requirements, managing the implementation so you can focus on your business, and tailoring the solution to facilitate your unique procedures.

 

Data Utilization and Analytics

We are in the golden age of data and organizations are eager to leverage as much of it as possible. Unfortunately, sourcing data from a variety of locations often leads to a lack of uniformity and an assortment of issues. Private Equity firms are implementing robust analytics and data science for Transactional Due Diligence, Post-Investment Value Creation, and more. The application of data science within Transactional Due Diligence is exceptionally groundbreaking as perspective buyers are often subjected to tight timeframes of approximately 6 weeks.

Business Intelligence, Data Science, and Machine Learning allow Private Equity firms to conduct real-time analysis and assess billions of data records in a limited amount of time. Granular post-investment analysis can be attributed to geography, customer type, and more. The segmentation of the data enables a comprehensive understanding of the business. Thus, augmenting the Private Equity firm’s ability to perform the focused improvements that are central to their business model.

Exhaustive analysis of the fund’s overarching portfolio and individual companies hinges upon access to structured data. FinServ has the extensive Business Analysis and Operational Assessment experience that is required for structuring processes and data accordingly. We will partner with your organization to remediate operational issues while integrating innovative technology.

 

Transitioning to the Cloud

Cloud utilization is rapidly increasing as stigmas against housing data in off-premise locations have eroded. Private Equity firms are realizing the significant benefits provided by transitioning their data to cloud environments, SaaS, and IaaS locations. Migration allows firms to focus on their core competencies rather than hosting data. Cybersecurity is a predominant concern that will be alleviated by outsourcing a portion of the responsibility to an organization that exclusively focuses on housing internal and client data. Safeguarding this sensitive information is required for client safety, firm reputation, and regulations such as GDPR.

 

 

One consideration that may be inhibiting your organization’s migration to the cloud is the massive undertaking of doing so. FinServ has honed our data migration expertise through 15+ years of working alongside more than 40 of the world’s top 100 Hedge and Private Equity Funds. Communication is emphasized throughout our engagements and we will partner with your organization to ensure a proper and efficient transition. Furthermore, FinServ will take the opportunity to streamline processes and eliminate bottlenecks that have been hindering your business.

Even though Private Equity has been slower to adopt new technologies than other Alternative Asset Managers, the industry has begun to align with key initiatives offering indisputable benefits. The implementation of superior technologies like CRM systems, Cloud infrastructure, and the utilization of data for advanced analytics supplements competitive advantages and investor returns.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

Prepare for the New and Remote Workplace

COVID-19 abruptly forced many financial institutions into a remote staffing model without the slightest inclination of its duration. Barring the infrastructural challenges, many employees have enjoyed the elimination of commuting, comfortable attire, and flexibility. The mandatory adoption of working from home will have significant implications for the daily trips to the office that were once the norm.

An Operational Assessment of your firm’s technology and procedures will identify issues that will be exacerbated by a sustained virtual workplace and provide insight into four verticals: Planning, Security & Controls, Collaboration, and Client Interaction. It is important to perform an exhaustive analysis of your firm’s technology and procedures to identify issues that will be magnified by a remote model.

 

Planning

The importance of planning is one of the few constants in today’s erratic climate. Many organizations are creating management teams and enlisting the assistance of third-party specialists to navigate these tumultuous times. Creating a specialized team will enable flexibility, establish accountability, guide the implementation of new technologies, and mitigate risks.

 

Security

The sensitivity of client data within financial services results in security being a predominant concern. One particular issue is numerous employees accessing company information with wireless networks beyond the organization’s control. The combination of unsecured networks and increased attacks from opportunistic deviants poses significant risk to financial institutions and their clients.

Furthermore, cybersecurity teams’ impeded ability to respond may affect their capacity to remediate issues in a timely fashion. Many teams are accustomed to face-to-face collaboration and/or additional resources that may not be available when working from home. Prevention is the best defense and can be achieved by conducting a detailed assessment of your firms processes and systems.

Establishing procedural controls and maximizing the native features of current technology will enable your company to stop attacks before it is too late. An effective defense for eliminating external access to company information can be as simple as utilizing 2 Factor Authentication or modifying a monthly process.

 

Collaboration

Collaboration is a major concern that inhibited employer’s from implementing a remote workforce prior to the pandemic. The recent success of remote work has assuaged worries and has even led banking heavyweights such as JPM and Barclays to consider the implementation of remote teams and/or rotational models. Rotational models are particularly attractive because they reduce fixed costs while balancing the benefits of in-person and entirely remote staffing models.

The short-term success of a virtual workplace will not persist if institutions fail to align their technology and operations accordingly. Video conferencing has emerged as the predominant medium for establishing virtual connections but has unfortunately been accompanied by a series of growing pains.

 

 

The sheer volume of concurrent employees leveraging the video conferencing system often overloads the solution if it was configured for a lower number of users. Additionally, various teams utilizing different platforms may result in access issues. Mass collaboration can be facilitated through the implementation of a uniform video conferencing system such as Microsoft Teams or a sophisticated document management system like SharePoint.


User error caused by a lack of sufficient training and limited employee access contributes to bottlenecks that can be easily avoided by partnering with an experienced implementation partner. Although the days of side-by-side spreadsheet collaboration may be behind us, teamwork can be augmented with the use of platforms such as Microsoft’s SharePoint. Multiple users can simultaneously work on the same file while SharePoint maintains versioning, audit trails, and an assortment of security features that protect sensitive data.

 

Client Interaction

Successful client interactions are dependent on thorough and frequent communication. The investment industry has recently experienced a level of volatility and uncertainty that makes communication more important than ever. Asset managers and financial institutions must have the necessary operations and technology to efficiently communicate and protect information that has traditionally been delivered in person.

A popular solution for the mass distribution of content among Salesforce users is Pardot. Pardot is a marketing automation tool offered by Salesforce that boosts communications with potential and current investors. Moreover, it is important to evaluate CRM solutions such as Backstop, Clienteer, Dynamo, or Salesforce to ensure that your team is maximizing their functionality.

 

 

The unexpected transition to remote work was a daunting task that will have lasting impacts throughout the financial services industry. Organizations must align their processes and technology if they desire a seamless changeover. Technologies such as Microsoft Teams & SharePoint, an Operational Assessment, and a dedicated Management Team are likely required. FinServ has served as a trusted advisor to the world’s leading Asset Managers & Financial Institutions for more than 15 years and is the ideal partner for facilitating this conversion. 

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

Robust Integration with Salesforce

Integrating external data feeds from your Administrator can facilitate operations and eliminate many of the daily bottlenecks faced by employees. Investor Relations teams may struggle to adequately communicate key performance and investment data to investors if they are simultaneously juggling numerous information sources. Directly feeding Administrator data into Salesforce will allow them to navigate a singular system while answering critical questions. Moreover, you can finally eliminate your countless excel files and the associated processes that mandate excessive manipulation.

Salesforce boasts impressive reporting and data visualization functionality that will enable your firm to draw deeper insights. The amalgamation of Salesforce Reports, Dashboards, and real time data will allow your organization to create visualizations highlighting key investor and performance metrics. Thus, augmenting personnel’s ability to anticipate client needs and answer their questions. FinServ has developed an assortment of pre-built reports and dashboards that isolate data pertaining to investment strategy, region, fee structure, performance, and more.

 

How to Integrate Your Data

Salesforce offers three primary tools for uploading data into Salesforce: Data Import Wizard, Data Loader, and dataloader.io. Each tool is applicable in its own right with differing use cases and functionality. The Data Import Wizard does not require installation and can easily be found by performing a quick search within Setup. Once you open the Data Import Wizard, it is as simple as selecting your CSV file and mapping the fields via the Salesforce Interface. Although the Data Import Wizard is a useful tool for basic uploads, it’s record count is limited to 50,000 and it cannot export data. The Data Import Wizard can be leveraged for both Custom Objects and Standard Objects such as Accounts, Contacts, Campaign Members, Leads, and Solutions.

 

 

Data Loader is a more robust data integration solution than Data Import Wizard. It is an external client application and therefore requires installation. The Data Loader facilitates the importation of 5,000 to 5 million records and is inclusive of both data exportation and deletion functionality. Users can specify configurations with the user interface or command-line interface. More advanced users can use the command-line interface to automate their data processing needs. However, the command-line interface is limited to Windows users and uses the Salesforce Object Query Language.

 

 

The final and most developed option is the cloud based MuleSoft solution known as dataloader.io. Similar to Data Loader, dataloader.io boasts importing, exporting, deleting, and scheduling capabilities. However, it can pull data from a variety of sources such as Box, Dropbox, FTP and SFTP repositories. Data Loader’s functionality is dependent on the package offering (Pricing Information) and has 3 editions that are priced at $0, $99, or $299 per month per user. The number of records, file size, and related objects ranges from 10,000, 10MB, and 1,000 to Unlimited, 100MB, and 100,000 per month.

 

 

How FinServ Can Help

FinServ’s completion of hundreds of projects spanning the Back, Middle and Front Offices for more than 40 of the top 100 Alternative Asset Mangers has enabled an expertise in industry processes, technological solutions, database management, and more. Additionally, FinServ has a deep understanding of the granular details associated with constructing a customized data model that fulfills your funds operational needs. FinServ is an accomplished integration partner due to countless experiences with Administrators and other Third-Party Data Sources.

Identifying the correct data may appear intuitive, but it is a common pain point throughout the industry. FinServ will host sessions with your various teams to identify and document their requirements. Thus, enabling the structured categorization of necessary and superfluous data. Directly integrating data into Salesforce allows for the elimination of unnecessary calculations that often mandate reconciliation. Subsequently reducing strain on your infrastructure and employees to allow for concentration on value rather than performing endless maintenance.

FinServ’s role extends well beyond the traditional tasks associated with integrating your data feeds. Business processes optimization and the identification of enhancements will originate from more than 15 years of experience within the Alternative Asset Management industry. FinServ will consolidate systems, document procedures, ensure successful implementations, and redesign processes to construct a simple and efficient approach that supports both your business and personnel.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

Intelligent Business with Power BI

In order to understand the capabilities of Power BI, it is best to start with the fundamentals of Analytics & Business Intelligence (“ABI”) and data visualization. The combination of ABI and data visualization allows Power BI to articulate information in a digestible manner that is supportive of intelligent decision making.

ABI tools are user-friendly data management platforms that emphasize self-service and provide analytical functionality ranging from data preparation to insight generation. Business Intelligence (“BI”) leverages historical information while analytics employs modeling and statistics to anticipate future events. Generally speaking, BI is focused on what happened, and analytics is focused on why it happened.

Data visualization is the presentation of information through graphical mediums like charts, diagrams, dashboards, and more. Dashboards are an amalgamation of components designed to inform stakeholders in an aesthetically pleasing manner like the sales dashboard below. The goal is to provide an informative platform that is far easier to comprehend than traditional resources such as a spreadsheet with thousands of rows.

 

 

Power BI and Its Key Features

Power BI is a business intelligence solution that enables companies to draw organizational insights by using data visualizations, performing analytics, connecting to hundreds of data sources, and embedding content into external applications & websites. An additional benefit enjoyed by users on the Windows platform is its seamless integration with the Microsoft suite. In summation, Power BI allows users to connect, prepare, model, and visualize data.

 

Power BI incorporates numerous features (illustrated above) that assist in the analysis and comprehension of a business. Three particularly impressive features included in Power BI’s repertoire are Natural Language Generation (“NLG”), Automated Insights, and Advanced Analytics. NLG uses artificial intelligence to automatically produce rich text descriptions detailing outputs. Automated Insights are conceived from advanced algorithms and are a great way to initiate analysis on large data sets. While the initial analysis generated from Power BI can provide direction for additional research and evaluation, other factors may be sufficiently analyzed within Power BI without the need for further investigation. Advanced Analytics can be performed with Power BI’s internal ABI platform and/or by integrating with external models. Azure Machine Learning Studio’s drag and drop interface can be combined with SQL and R to conduct predictive analytics on data sets.

 

Subscription Options and Functionality

The three versions of Power BI are Desktop, Pro, and Premium. Desktop, the lowest-tiered option, can be downloaded from the Microsoft Store for free. It includes the core data visualization and analysis features; data preparation, reports, dashboards, connection to over 50 data sources, and the ability to export in various formats.


Pro includes all of Desktop’s functionality and can be purchased as a standalone product for an annual subscription of $10 per user license per month or as part of the Microsoft Office 365 Enterprise E5 suite. The enhancements differentiating Pro primarily fall under collaboration and the distribution of content. For example, users can share their insights by embedding visuals within applications such as SharePoint and MS Teams. Furthermore, users can leverage peer-to-peer sharing to distribute their work to external stakeholders with Power BI Pro licenses.


Premium, the most advanced offering, comes at a hefty annual subscription that breaks down to a
monthly price of $4,995 per dedicated cloud compute and storage resource. Some distinguishing characteristics that amplify data analysis include enterprise level BI, cloud & on-premise reporting, dedicated cloud computing, and big data analytics. Other features that are included in Power BI Premium are increased storage, higher refresh rates, and a larger data capacity. Premium grants enterprise-wide access and is best suited for large organizations with significant business intelligence requirements.

 

Implementing Power BI in Financial Services

Power BI has countless applications for alternative asset managers and other financial services companies that span the front, middle, and back office. One of Power BI’s most popular functions is financial management and reporting. QuickBooks Online customers can utilize a preconfigured Content Pack that allows them to quickly construct financial statement dashboards. Users are immediately provided with functionality that comprises customer rankings, profitability trends, and various financial ratios.


Implementing and tracking KPI’s with Power BI allows investment managers to accurately evaluate operations. Best practice is to have KPIs spanning the front, middle, and back office because an unidentified issue in any of the three areas can be detrimental. A few prevalent KPIs are Investment Management Fee Revenue as a Percentage of AUM, Trade Settlements per Back Office Employee, Subscriptions vs. Redemptions, and Trade Error Rate by Asset Class.


Business intelligence can be applied to portfolio management by connecting Power BI to the underlying data sources detailing investments. For instance, asset allocation reports and dashboards allow fund managers to interpret the distribution of funds relatively easily. Another prominent application of Power BI is treasury & liquidity management because data visualizations can be developed to provide detailed breakdowns of cash management, FX hedge balances, and more.

 

Conclusion

Power BI is a powerful ABI platform that augments a business’s ability to consume data through the creation of interactive reports and dashboards. Business intelligence can be constructed to support any business function with enough data. More importantly, it can be configured to the firm’s unique needs and has the ability to adapt with dynamic business requirements.

FinServ has acquired deep industry and technological expertise through the completion of over 600 engagements at more than 40 of the top 100 Hedge and Private Equity Funds. FinServ can configure Power BI to accurately monitor operations, identify the correct KPIs, properly document business processes, and seamlessly integrate new technologies with existing infrastructure.

 

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

Controls Meet Cost Savings: Market Data Expense Management Systems

Global market data spend recently exceeded $30 billion per year1. In an increasingly data-driven investment world, market data spend is only expected to rise, as firms seek out new alpha-generating data sets to enhance returns. Additionally, quantitative investment strategies have never been more in vogue with investors; the literal arms race to find better, more powerful data sets is sometimes merely just a struggle to “Keep Up with the Joneses”.

Market data is a critical component of modern fund management; however, wrangling market data expenses has never been more important due to rising costs and increasing complexity. In this article, FinServ will cover:

  • Why is Market Data Expense Management Important?
  • What Makes Market Data Expense Management Hard?
  • What Technology Solutions are Available?
  • Complementary Solutions and Services
  • How FinServ Can Help

Why is Market Data Expense Management Important?

Market data is a Top 5 expense at most investment managers, but it is often the #1 headache. Although other expenses like employee compensation, real estate, and general technology spend reach similar (or greater) heights, market data expense management often lacks the same direct and consistent level of stewardship. Everyone wants to decrease market data expenses, even though they tend to be the least understood (e.g. complex contracts, metered services) and it is easy to pass the buck on ownership between technology, finance, operations, and the front-office. Strong, centralized control of the market data management process can help firms save millions by eliminating unused and underutilized services; however, even when market data has an organization’s focus, there are several inherent challenges with managing market data expenses without help.

What Makes Market Data Expense Management Hard?

Market data is incredibly costly and difficult to manage due to its complexity. Market data expense managers are tasked with providing structure to market data programs facing an ever-growing list of responsibilities and related challenges. These include managing a variety of execution-focused priorities, while also driving organizational change via strategic initiatives like optimizing data usage/flow and cutting out unnecessary costs. These activities include:

Expense Allocations & Invoice Reconciliation Controls:

  • Market data allocations are usually more complex than vanilla corporate expenses. A single invoice could get allocation to some combination of individuals, groups, departments, and/or strategy (e.g. fund AUM-based allocations).
  • This requires a clear understanding of the market data services and solutions currently in use, including an understanding of services purchased. How you pay matters as well; any soft dollar payments should be tightly managed along with appropriate firm compliance officers.
  • Due to the volume and complexity of market data vendor invoices, the invoice reconciliation process demands a strong technological solution to facilitate daily market data expense management.

Usage Management:

  • Keeping track of actual market data usage is required to get a handle of how to cut unnecessary costs. This includes knowing which applications use specific data, how it’s licensed, and when renewals will occur.
  • Market data usage and expense reports are required for the business to make informed decisions related to overall needs. This includes a mechanism to track usage and verify that it is in line with the original business objective.
  • Mitigate audit exposure as a firm and remediate any compliance breaches. Understand how the firm’s contracted capabilities compare with actual data usage. Determine if licenses exist for all services utilized across the organization?

Strategic Platform Management:

  • Review and implement industry best practices for market data expense management.
  • Align the overall strategy with the strategic initiatives of the business and technology teams.
  • How may the organization optimize market data consumption across the board to reduce costs?
  • How many data vendors are currently used?
  • Are any services duplicative/redundant?
  • Are there any unused/underutilized services?
  • Are there better platforms available for meeting corporate strategy?

What Technology Solutions are Available?

MDSL: Market Data Manager (MDM) and TRG: Financial Information Tracking System (FITS) are two of the leading market data expense management system providers in the financial services and asset management space. The overall landscape has been heavily influenced by private equity merger and acquisition activity. MDSL recently merged with Calero, a telecom expense vendor, and TRG acquired a third player in the market data expense marketplace called Screen: INFOmatch in 2019. Both MDSL and TRG aim to provide structure and clarity to manage firmwide market data, research, software and enterprise subscription spend on subscriptions to market data providers like Bloomberg, Reuters, and FactSet.

  • Contract Management and Centralized Inventory: Allows organizations to track, organize, and calculate costs related to market data vendors, contracts, products, and users. Contracts and licensing inventory details may be captured to create a centralized inventory of market data assets for use in invoicing and allocation.
  • Compliance Workflow: Compliance approval workflows may be leveraged to review soft and hard dollar eligible costs.
  • Invoicing Workflow, Reconciliation, and Allocation: Invoice processing becomes streamlined when matching against structured inventory records. Robust organizational structures may be accommodated to allocate to departments, groups, and/or individual users.

Complementary Solutions and Services

  • Managed Services: Both MDSL and TRG offer managed service offerings inclusive of contract maintenance, compliance reviews, and invoice reconciliations. If you are underwater with your current market data expense management process, consider leveraging managed services as part of an initial implementation.
  • Usage Monitoring and Control Products: MDSL: Access Compliance Engine (ACE) and TRG ResearchMonitor provide access controls and usage monitoring for subscription services, allowing you to reduce spend on underutilized services and directly ensure compliance with data access contracts/agreements.

How FinServ Can Help

Managing market data expense is often a headache for investment managers, but there are several leading marketplace solutions that help relieve the burden placed on market data managers. FinServ Consulting’s industry expertise and unparalleled track record of service for asset management clients makes us the right partner to help you select the right solution for your organization.

To learn more about FinServ Consulting’s services, please contact us at info@finservconsulting.com or (646) 603-3799.

1 Based on a Burton-Taylor Research Report.

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.

Leverage Document Intelligence to Expedite LIBOR Contract Renegotiations

As previously discussed in SOFR is the New LIBOR, one of the key issues regarding the transition of $35 trillion in USD LIBOR assets to an alternative reference rate is the lack of sufficient fallback language. Inadequate fallback language gives rise to an assortment of complications when attempting to analyze contracts using traditional technologies. Fallback language is the contractual provisions that outline the procedure for transitioning to a new reference rate.

Fallback Language Elements:

 

Issues with Fallback Language

Numerous issues arise when analyzing the fallback language of assets tied to USD LIBOR. Contracts often fail to designate a benchmark replacement rate and therefore leave managers without a clear resolution plan in the occurrence of a fallback trigger event. Most of the language was designed to alleviate temporary gaps in benchmark rate reporting rather than the permanent termination of LIBOR. Consequently, the appropriate benchmark replacement is unclear.

Compounding the lack of clarity is the absence of a standardized contract structure across various derivatives and cash products. Moreover, many contracts lack the existence of fallback language altogether. The involvement of multiple parties further complicates fallback language negotiations due to a misalignment of priorities. The amalgamation of these issues has hindered firms from storing asset contracts in a sophisticated document repository with search capabilities and often warrants the manual review of individual contracts.

 

Addressing the Situation

Changes to the structure of a fund’s holdings and operations command careful planning and execution. Amendments deriving from the termination of LIBOR mandate the construction of meticulous roadmaps and the design of new business procedures. Their creation is impossible without the knowledge of USD LIBOR assets and processes. It is vital to take a detailed inventory of all holdings, systems, and operations that are subject to change. Consolidating contracts into one or more defined document repositories augments the renegotiation process by facilitating the application of targeted remediation strategies.

Following the familiarization of contracts and their storage, the application of document intelligence solutions can greatly enhance the navigation of fallback language with tools such as natural language processing (“NLP”) and optical character recognition (“OCR”). Document intelligence has shown the ability to decrease cost by 80% and processing time by 90%; while increasing accuracy and consistency by 25% and 50%, respectively. The classification and normalization of data augments your contract review team’s ability to analyze contracts. Additionally, NLP and machine learning (“ML”) technology enable access to vital information that was formerly lost in traditional document repositories.

How Document Intelligence Works:

 

More on Document Intelligence Systems

Document intelligence solutions automate the ingestion of contracts, extract and structure key data, and automate contract repapering. Repositories frequently lack the advanced search capabilities required for evaluating fallback language. The implementation of a document intelligence system that automates the ingestion of structured and unstructured contracts can fill this gap and streamline your firm’s technological infrastructure.

Document Intelligence solutions transform key contract data into structured data models that allow for advanced search capabilities. Next, the solution automates various components of the contract repapering process such as generating the proposed amendments. Contract repapering functions can be paired with workflow tools to further streamline the process. The assortment of features offered by a document intelligence solution result in significant time and costs savings while boosting accuracy.

 

FinServ Can Help

Why tackle this arduous task alone when industry experts are eager to help? FinServ’s project management and industry expertise can provide value through the various stages of negotiating fallback language. FinServ can lead the implementation of your desired document intelligence solution, construct a comprehensive inventory of your firm’s contracts, and manage the integration of existing infrastructure with your new system.

We can produce a detailed overview of the document intelligence solution, it’s interdependence with various internal and external systems, and design the procedures associated with its use. FinServ understands that proper documentation is essential for mitigating regulatory risks, validating business procedures, and streamlining training.

 

About FinServ Consulting

FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.