The two large technological challenges for today are cyber security and regulatory. The spend for these two items is growing and cuts into development and innovation budgets. Firms in the financial industry are spending much more on risk mitigation and finding it hard to spend on new, innovative ideas. In the private equity world, it is not that easy to get the data needed to research non-public companies and the data around non-public companies is not clean (private companies are not required to file with the SEC). One wish list solution would be a standard filing process that private companies need to follow and then someone to create a centralized database of this data with a front end developed to meet an investor’s needs (ability to answer many questions about the private companies). There are firms working on this, but until the input process is standardized it will be challenging. Expectations from providers will be secure cloud based applications/infrastructures so that firms can scale faster, develop faster, or integrate faster if not going to build.
From Data to Actionable Insights
Enterprise data and reporting is very hard when it comes to understanding the core data (initially just understanding how the business defines their core data), the process and governance. If organizations can get the understanding of the data correct, the process and governance correct then leveraging a technology becomes easier. To get this right you have to first have a mandate from the top for Enterprise Data and reporting, and then your business users have to own their data and work with technology teams to figure out what is the core data that needs to be governed and what policies/procedures should be put around this data. With respect to resources, organizations should hire strong data associates (understand data structures, organizing data, etc.) who have a good understanding of the business. When setting up data councils a business person should chair the council and stewards of the data should sit on the business side also.
“If there was good research data on private companies, it would make the due diligence and decision support processes on companies easier”
Importance of Infrastructure Security
In the private equity space, it is very important if you are global to have a good infrastructure in place. Your investment professionals are traveling frequently and need laptops, phones, collaborative tools, and connectivity to their files. So the ability for your private equity professionals to work from any place, anywhere, anytime, is very important on how you look at the technology. Your security strategy with associates going into many different countries is also very important. Also in the alternative asset management space on the private side we are buying new businesses and some have to be incorporated into our infrastructure, so our infrastructure has to be built for scale and agility for change.
Security is one item that keeps me up at night. The attackers continue to get more sophisticated and we manage the risk with processes, training, and technology. An item that I have future thoughts around is standardizing on private data elements. The SEC is very stringent on filings for public companies (which is good), but there is not the same discipline for filings of private companies anywhere. If there was good research data on private companies, it would make the due diligence and decision support processes on companies easier with the leverage of technology. Firms are trying to create various systems, but it will not be its best until the data is standardized up front.
I think in the future as Alternative Asset Management firms continue to figure out how to improve their bottom line and gain potential insights around the business, then big data will be very important. Due to the global collaboration and global need of investment professionals in Carlyle mobile, cloud, IOT are all important– the Digital World.
In the alternative asset management space we are moving to the “Desktop of the Future” because our users have to be able to work from anywhere at any time and be able to get to any files. We have not completed this deployment, but this is our strategy. So mobile phones, tablets, cloud have revolutionized our space, making our user base much more productive.
A Word for CIOs
The role of technology has changed greatly at our firm. It used to be break/ fix and now we are providing solutions with the business and meeting their needs by understanding their customer experience. Professionals in the technology space have increased their business acumen to truly partner with the business. My role as CIO has become much more strategic and the intersection of the Business, Technology, and Finance/Budget challenges me daily. CIO’s have to know much more about the business and their strategies than they have had to know in the past and they have to stay on top of emerging technologies.
Within Carlyle we have transformed the technology team to be true business partners where we understand the business, understand the process, and then we assess if we truly need technological leverage to solve the problem or is the solution just a process or organizational change. We have put a big focus on change management, communications, and creating transparency for the business. The business should always know the value proposition. We are always looking at potential disruptive technologies to see if they would add any value to our user base.
The role of the CIO understanding security and having a well-qualified CISO is very important. At Carlyle we know how important it is to mitigate our risk so the CISO pays full attention to this area. The CISO works between IT and the business and works closely with legal, compliance, Enterprise Risk, and internal audit. For a CIO, Security should be their main focus.
A CIO starting in the Alternative Asset Management space needs to understand the business first, learn the culture, assess the current state, and then set the strategy for the future– always being a TRUSTED partner with the business.