How to leverage data, the new oil to power my growth engine for Alternative asset management “Data is the New Oil”

Data is the New Oil

“Data is the New Oil”. Oil Powered Industrial revolution, transformed our lives adding a new dimension to the way we live in today’s world  Data is poised to power Information revolution and we are witnessing another transformation adding again a new dimension to humanity, redefining the way we are making decisions and the way we would make decisions in the times to come. Sounds good and fancy too! But how does it really relate to me as an alternative asset manager? The question is very pertinent and calls for a deliberation.

Today data is produced at a feverish pace at an exponential rate of 4400% of what was being produced a decade back. This rate of rate of producing data too is growing exponentially and we would witness unimaginable amounts of data that is going to be produced. What we process today? Less than 3% of the total produced data!! This is huge gap and points to a big opportunity, just imagine if we could optimize the data capture and analyze this data what difference can it bring about when it comes to making more intelligent decisions! We need to appreciate the relevance and power of this data before we dwell on how to leverage it for alternative asset management.

One need to realize that time of the spread sheets are over for any business. A Google search, a passport scan, a bar code reading, your chat messenger,  a CCTV footage or a picture, a voice message, a telephone call,  a blog post, a video, social mentions, or a tweet all of them data can be collected analyzed and monetized. The computing powers and the algorithms today let us analyze this large amount of data in real time for more intelligent decision making.

 In this age of big data, manual and disconnected data and disjointed approaches to data management can result in outdated and inaccurate information with greater possibilities of breaches.  An enterprise is vulnerable if the data is inaccurate and outdated and threatened with breaches.

For a Private equity manager, a hedge fund manager, a fund of funds, to sum up an alternative asset manager can perform better if the data is structured in a way that the right information reaches right person at the right time and is also analyzed in real time because only then organization makes better faster decisions and can succeed.

The data needs to be able to communicate between the point of generation, analysis and decision making. It has to be two way street cannot just be one way flow it needs to be interactive. The processes of collection and processing can only be optimized in real time when the data is interactive, can have bidirectional communication and the system is always updated in real time.

So it was a good strategy to be out sourcing your processes but with the changing times and the new realities it no more makes sense to let out your data.  Apart from the data breach risks which keeps most of us on the tenterhooks, it also amounts to letting the data in the hands which would never understand the real value and how it can be used in various different ways to emanate more information and contribute to more intelligent decisions or may be, used for your data stories for your investors, co-investors, LP’s or to make a deal, but letting out you lose control &  the opportunities to optimally utilize your data for your business to the fullest.

What outsourcing as a strategy does is it lands us creating these data Islands, hardly communicating with each other in the real time rendering most of the data generated disjointed, unorganized and unusable. This leads to raveling up the issue more than solving them. Instead of simplifying the process it adds to complexities in the operation. It makes the operations more opaque than help bring in the transparency, render operations more inefficient, time consuming and error prone.  

How do I make the best use of this Information Revolution and leverage it for growth of my business?  

The next obvious question! There is no one answer to this question however if we look at it in the form of an approach to this question then the answer my friend is blowing in the wind!

Why I say the way you approach the question is more important than the answer itself, is because we aren’t even at the tip of the Iceberg of the information revolution today. So to be able to leverage and harness to the fullest the advantage of the opportunities being promised and presented by this revolution, you need to focus on the approach you take to address this question.

One has to carefully look for the signs which could help in arriving at a robust technological solution to take care of the challenges being posed by this revolution which has left no business unaffected. The choices which you make would determine your growth and competitive edge in the market, and the ramifications of wrong approach would spell doom.

One would also have to keep in mind the changing ways in which we interact with the businesses today and would be interacting tomorrow. Neither the traditional IT infrastructures nor the traditional matrices and the KPI’s are holding meaning for business analysis today. The older not so easy to customize ERP systems hosted on your servers are losing their sheen and relevance in today’s feverishly paced business which requires the system to be scalable, flexible and customizable in real time.

The accusation, implementation and maintenance cost is another major road block which has stunted the growth and adaptability of these ERP solutions amongst the alternative asset managers.

So apart from the Software portion of the solution, you also need to look at the way the solution can be delivered and implemented with minimal hardware cost and requirement. How easy is it for your team to access and by that I am not limiting the scope to just the way your people access the system in the office but the way it can provide them with the freedom and versatility of the devices being used to access the system anywhere and at anytime.

So what should the system be like?

The system should be one single platform where all your teams should able to converge in, in real time thereby empowering your teams with a new level of operational efficiency and service excellence. A single version of truth, enabling fast accurate management and focus real time collaboration and optimal performance for your organization.

 Thus it is the approach to the challenges and opportunities which information revolution has brought in, is going to determine as to how best we can harness the power of the data to our advantage.

An ideal solution to be partnered with to make the best of the current challenges and opportunities is to have an IT infrastructure which is cloud based platform giving freedom from hardware devices required to interact with the system. It rids you from heavy investments into the hardware like servers etc. which are highly depreciating assets and require an investment into IT team to manage and maintain them.  It also rids you of the costs involved in the software and hardware upgrades from time to time. Ideal solution should be a Digital Infrastructure in the SaaS format so that the costs are kept under control and you are able to assign and quantize the cost of the data management. This helps in bringing about a greater transparency and accountability, flexibility, scalability and a drastically lower entry cost for technology solution as compared to the current ERP solutions, for giving your business the technology advantage and edge!!

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