In our experience, there is still denial in the industry over the indirect expenses associated with data, so often the best starting point is to understand the total cost of data. The issue isn’t just about the cost of data acquisition, but how it’s enhanced, proliferated and distributed throughout the enterprise. Asset managers should also consider the value of the data to the firm, through robust cost benefit analysis.
In order to measure the cost and value of data, firms must be more rigorous in understanding their true data environment. Whilst many firms (but by no means all), have made significant strides toward understanding their total cost of data acquisition, few have a coherent picture of the data consumers and usage, or the workflows and internal cleansing that is undertaken.
The first challenge for investment firms is pinpointing these costs, as the information is usually lost across processes, jurisdictions and entities. Once a true picture of the data processes and costs is built, you can look to introduce greater efficiencies, rationalise data sources and derive increased benefits from this data.
The first place to start, though, is to work out your true costs of data ownership.