The investment management community has rapidly embraced cloud-based technologies due to operational requirements brought upon by the ongoing pandemic. The implementation of cloud technology is now “table stakes” and is a baseline requirement to be successful. So where can managers look to gain a competitive advantage? By embracing purpose-driven cloud technology, firms can take advantage of specialized solutions, such as the data cloud or the productivity cloud to acquire that edge.
By harnessing the analytical power of the data cloud, investment managers can vastly improve how they interact with information. Managers employing quantitative strategies are not the only firms that use massive amounts of rapidly changing data. With the rise of “quantamental” investing, more hedge funds are analyzing large amounts of data from a multitude of sources to inform their investing. Similarly, even private equity firms are starting to evaluate how data can be used to more effectively deploy capital and transform their portfolio companies. The cloud democratizes the complex data economy by allowing users easier access and maneuverability of alternative datasets. In some cases, cloud technology allows managers to store, manage and manipulate data in centralized locations. This is especially important given many business continuity plans before the outbreak of the pandemic did not account for the scale at which remote working would be required. With cloud technology, it is easy to expand storage and computational power. This flexibility allows investment managers to quickly react to black swan events.
Beyond the management of data, managers have been forced to become more operationally dynamic due to working from home policies initiated as a result of the COVID-19 pandemic. With teams spread out far and wide, it can be difficult for firms using legacy or on-premise infrastructures to work together as efficiently as they would have done when in the office. However, with the productivity cloud, investment teams can quickly and efficiently collaborate regardless of their location. Decision makers can take advantage of the adept connectivity of cloud-based applications, such as Office 365 for document management or Microsoft Teams for communication. A core aspect of the productivity cloud is interconnectivity of third-party applications in a way that fosters better collaboration and efficiency. For example, private equity firms are increasingly requiring their document management systems to connect to their chosen deal management platform and deal room software.
Another powerful aspect of the productivity cloud is its ability to utilize business robotics. There are many middle and back office tasks that can shift investment managers’ focus away from investing or deploying capital, such as accounting and human resources. Business robotics can automate many of these often-labor-intensive responsibilities that otherwise would be time consuming and expensive, freeing up resources that can be focused on alpha generating activities. When properly implement the productivity cloud significantly improves efficiency by removing obstacles or speed bumps that can slow investing down. For example, with business robotics, private equity managers can automate many parts of the dealmaking process, such as compliance approvals and due diligence tasks, in order to more quickly put money to work in this ever competitive environment.
Access to the powerful and secure tools made available by specialized cloud technology, whether it is productivity or data focused, can improve investment decision-making, enhance communication and collaboration, and streamline labor intensive manual processes. When applied effectively, and customized to the unique needs of each individual manager, the productivity cloud can provide a competitive advantage versus those firms who have simply ported their own systems from their on-premise infrastructure to a generic public cloud. If you are focused on digital transformation in investment management, please reach out to our award-winning team of cloud and development specialists to discuss how we can best tailor productivity cloud solutions to give you an edge.