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Simplifying Portfolio Analysis: Streamline Your Work
Part Two of a Three-Part Guide for Investment Teams
In the first article in our series, we addressed how to prioritize the work you want to simplify. In this article, we turn to how to simplify your workflow. We continue to develop our worked example to better illustrate our method.
Looking across your workflow, identify opportunities to remove rework, as well as hand offs between different teams. Also, look for opportunities to standardize or normalize how you perform your work: for example, by using analytical measures that are calculated the same way every time you use them, or by using template-based designs for your reporting and publishing activities. Finally, look for opportunities to consolidate the data stores and applications that support your workflow. Can one application provide access to all the data and functionality your workflow needs? If you can consolidate your workflow into a single application, you will likely find you can remove rework almost entirely.
Worked example: step 3
A wealth manager’s home office investment team analyzes the work they are doing. They discover that they spend 40% of their time customizing model portfolios on behalf of branch advisers. The team prioritizes this as work they want to simplify and automate, and writes down the tasks they perform when customizing models.
The team identifies several opportunities to improve their model portfolio customization workflow. They are currently using one portfolio-management application to identify investments in companies involved in animal testing, a second application to model changes to the portfolio, and a business intelligence application to visualize the impact of different changes on performance and risk. The team determines that it is possible to consolidate all the data and functionality they need to support their workflow into a single portfolio-management application.
The investment team also discusses the hand off of the work required to build a factsheet to the marketing organization. The process seems inefficient. Marketing requires that a brief be completed; data are exported from several different applications and attached to the brief; and charts and tables are rebuilt with the desktop publishing software using brand assets stored in the digital asset management system. The work involves a lot of manual steps and suffers from long cycle-times, human error, and many rounds of revisions.
The investment team determines that their portfolio-management application is also capable of creating the factsheet. Rather than hand off the work using a brief, the investment team asks marketing to participate in their working meetings directly and perform the work as part of a single, integrated team. The investment team also asks a member of the compliance team to participate in their team activities directly, with the goal of improving cycle times further by removing another hand off.
Finally, the team discovers that they are calculating analytical measures differently, depending on the type of model portfolio they are customizing. The team agrees to normalize their analytical frameworks so that they can apply them consistently across all model portfolios.
Model portfolio customization workflow, after optimization.
By simplifying your work, you save yourself time. Save even more by automating what you can. Learn more in part three of our series.