People have become conditioned to real-time information where, when and how they like it thanks to the digital revolution. Performance measurement in investment firms is no exception. Stakeholders want quality performance data and “fit-for-purpose” deliverables that meet nuanced stakeholder, methodology and quality requirements. Yet some asset managers cannot keep pace with static paper-based reporting that lacks the flexible views stakeholders need.

I am seeing asset management firms starting to redesign their performance measurement processes to meet rapidly changing demands. And while there is a lot of room for innovation, there is no magic-bullet solution. Quite the opposite—investment firms that want to transform performance measurement need an enterprise-wide approach to identifying opportunities for improvement across three mutually-dependent areas. 

1. End the data dilemma

It is no surprise that data is at the heart of performance measurement, or that bad data leads to bad reporting. But what may surprise some is just how challenging data management has become for many asset management firms.

Take data aggregation. To provide the multiple views of performance information that stakeholders demand, firms must aggregate data from many sources prior to calculating returns or attribution. Without a central repository for their data, asset managers could drown in complexity and manual processing that together multiply efforts—and errors.

We are also seeing widespread data quality issues. The impact is significant because it has never been more important for asset managers to be able to access—and trust—the most granular data elements. To make improvements, performance measurement teams must get to know stakeholders’ needs and take an active role in the data governance process. 

2. Evolve the operating model

There is no one-size-fits-all operating model that best supports next-generation performance measurement. Whether firms have a decentralized or centralized approach, the key is that the operating model helps enable production, delivery and client service.

In addition, performance measurement models could succeed due to thoughtful alignment of people to processes. Highly-skilled experts should focus on the highest-value activities, while intelligent automation could be utilized to gather and format data and other activities.

While it is often underappreciated, client service is mission critical to performance measurement, and should be accounted for in the operating model. Client service bridges stakeholders and the production process. The more finely-tuned and customer-centered it is, the more streamlined the entire function becomes. 

3. Enable with technology

From process automation and standardization to self-service options and dashboards, technology is essential to driving performance measurement improvement. However, there is a right way and a wrong way to invest in technologies, whether firms build or buy applications.

Think of technology as the means to the end, not the end itself. In other words, firms should let the business requirements guide the technology investments, not the other way around.

Firms should also keep their eye on the ball, and avoid investing everything at once in one major technology fix. Technology is constantly changing, and staying abreast of what’s on the horizon can help firms maintain the flexibility to change with stakeholder demands.

If you’d like more information about this topic, please read my recent InsideOps article, A New Paradigm for Investment Performance Measurement, or contact me at

Submit a Comment

Your email address will not be published. Required fields are marked *