Lessons in Data Architecture from the Windy City

Written by Derek Pratt | Aug 9, 2016

I had the opportunity to work in Chicago for a few years and immediately fell in love with the amazing architecture there. The grand scale of it all, the multi-functional use of space, the blend of modern innovation with old style sensibility, and the well-organized layout of the downtown that maximizes the natural gifts of the river, parks and lake—it’s easy to see why so many people flock to the city every year and call it home. I came to learn that this remarkable cityscape resulted in large part from the response to the great fire of 1871 which destroyed much of Chicago over the course of a few days. From the ashes of this epic disaster, the second city now stands as a testament to the creativity, foresight, and hard work of so many dedicated people. Walking through the streets of the Windy City not only gives us a chance to marvel at the surrounding aesthetic charms, but it also provides an opportunity to reflect on how it all came to be and what lessons from this achievement can be applied to a different kind of architecture—data.

Like the pre-October 1871 Chicago that was built on old frameworks in a rush to capitalize on the opportunities of the time, the infrastructure supporting much of the asset management industry is built on the bones of outmoded solutions. From tragedy, the great fire gave architects from around the world an opportunity to start fresh, innovate, and usher in a new era of progress for Chicago and elsewhere.

It shouldn’t take such levels of destruction as occurred in 1871 for us to take action. The impacts of poor data architecture and data management practices directly contributed to the recent credit crisis and have allowed space for nefarious behaviors to burn companies and investors. Also, lack of wider investment and adoption of data best practices has led to missed opportunities in the investment management industry at a time when margins are tight and competition fierce. These examples, which have touched so many of us, should serve as fair warning to firms that changes are needed now. We need more firms to harness their data assets better and uncover advantageous investment insights, while also helping us connect with our clients.

Fortunately, many industry leaders see the opportunities on the horizon. Realization of the possibilities resulting from nurturing our data assets starts with sound foundational architectures. The transition from legacy to the future requires commitment, expertise, and pragmatism. Going from where we are today to where we need to be takes a series of intelligently mapped-out steps. There are no easy short cuts to leading major infrastructural changes while maintaining business as usual. However, getting the data architecture right is the essential first step in creating a foundation from which innovation can take root. Supporting advanced risk measures to avoid market pitfalls and protect organizations against scandalous predators; providing innovation labs for investment analysts and data scientists alike to discover the next great insights; building models to visualize data in new ways leading to new understandings that support investment decision making and risk management—the success of each of these opportunities is predicated on the availability of a sensible and secure architecture that puts the power of data in the hands of those who can best harness its power.

The great architecture of Chicago has inspired people in all walks of life. Next time you happen to be walking around looking for a good deep dish pizza in Chicago (call me if you need a recommendation for the best spots!), take a look around and draw from the lessons the city skyline offers to challenge ourselves in leading the evolution of our asset management industry through investment in needed data architecture improvements!

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