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Baring Asset Management

Published 07 April 2010 | By Bonaire Software Solutions

Baring Asset Management is an international investment management firm provideing investment management services in developed and emerging equity and bond markets on behalf of institutional, retail, and private clients worldwide, and has $47.1 billion of assets under management. In 2009, Barings undertook a significant project to improve the quality of Management Information available to Business, Sales and Finance management.

In addition to making information available for analysis and planning, Barings endeavoured to increase data quality, accuracy and transparency, automate processes to significantly improve speed of production, and deliver a robust, timely solution on time and on budget. To improve their management decisions, Barings' goal was to identify, gather and make available to all constituents timely, accurate, consistent, complete and relevant data.

Business challenge/issue

Before undertaking the management information assessment and solution implementation, Barings was unable to access data from the firm's institutional, retail and private client business by AUM, fund flows, revenue and other measurements in a single repository. The data needed to be accurate and timely, with controls, data integrity and audit trails as part of the solution. Barings needed to move the focus from number crunching to data analysis, and be able to deliver reports to key stakeholders via desktop, email, blackberry and other medium. Previously, Barings spent more time and energy on gathering the information and verifying it as opposed to using it to facilitate business decisions.

In an extremely competitive environment, Barings wanted to be able to illuminate the most profitable and also subscale products, clients and relationships in order to better actively manage revenues and costs. From a sales perspective, reports could not be run at a detail level on a specific salesperson, distributor, region or product. Management could not assess which products, or distribution channels were most effective. Barings wanted to automate the management information delivery to determine the optimum marketing, distribution and product mix.

For example, mutual fund flows from some distribution channels could not be identified as having come from new or existing relationships. Barings needed a greater level of granularity into the data. Barings wanted a solution that would help manage sales force capacity with confidence and monitor sales force productivity. If Barings was able to determine how products were selling, they could align resources and support. Barings sought to equip its sales force and sales management with better knowledge into its customers and distribution.

Barings also wanted to be able to understand a client's past and current buying patterns in order to forecast future sales behaviour. Forecasting takes into account customer information, market mix, market forecast, market share as well as distribution methods, but requires actual sales data to create the forecast. Once the model and the rules are built, accurate, timely sales data from disparate channels needs to be supplied. In the past, Barings spent many cycles obtaining the data as opposed to applying the data. In a highly regulated business, Barings also needed to improve regulatory reporting. In order to meet Financial Services Authority (FSA) requirements for Treating Customers Fairly (TCF), Barings sought to automate TCF reporting and trend analysis for product promotion. Another benefit of improved reporting would be improved client service through access to data on all clients' holdings and transactions, and a multi-dimensional view of clients' business. A greater window into client relationships would drive enhanced client satisfaction.

The end goal of consolidating revenue, product, AUM, fund flow and customer data is ultimately to provide accurate, relevant and timely management information to management to help Barings manage its business more effectively.

Solution

Barings selected Bonaire Software Solutions, LLC, and it's REVPORT™ Revenue Management software suite to address their need to improve access to and the quality of their management information. Bonaire with REVPORT™ provided a solution that allowed the data flows from different business units (e.g. retail, institutional, private client) to be analysed on a separate as well as a consolidated basis. The single structured database supports the solution’s flexibility and robustness.

REVPORT™ combines data from Barings' institutional, retail and private client business in one place. The data is current, accurate, and complete. The solution includes controls, data integrity and audit trails. Business users receive standard reports and are able to create and run ad hoc reports that can be delivered by desktop, e-mail or blackberry. The new solution allows Barings to focus on data analysis, not data gathering.

In addition the REVPORT™ Revenue Management software suite provided Barings with a comprehensive and robust fee billing system for both fee income and fee rebates. Prior to implementing REVPORT™, Barings used a combination of in house systems and spreadsheets to calculate fees and fee rebates. With the REVPORT™ solution Barings gained a market-leading fee invoicing system and enabled Barings to retire some legacy systems.

Impact of the solution

Barings didn't set out to recoup a payback on the project initially, but realized actual resource reduction, improved quality and improved access to data not available previously. Barings reduced the number of full time employees dedicated to management information and fee processing by nearly half by implementing the automated REVPORT™ solution. The fee processing cycle was reduced by half from 8 weeks to four weeks, cash flow was improved and fund distributors were paid their fee rebates more promptly. Quantifiable ROI and timely, accurate, usable data resulted from implementing REVPORT™. Barings achieved their goals of making information available for analysis and planning, as well as increasing data quality, accuracy, timeliness and transparency. They successfully automated processes to significantly improve speed of production and support business decisions with timely, accurate, consolidated data.

With the application of REVPORT™, Barings now has an STP environment with quality data that has resulted in data confidence that was missing before. Like many large, global institutions, Barings spent too much time and resources collecting data from multiple systems, desktop applications, spreadsheets and manual entry before employing REVPORT™. Errors and outdated information caused the data to be challenged, corrected and re-issued. In many instances, the data was dated by the time it was reviewed, corrected and delivered.

Now instead of focusing on getting the data, Barings can concentrate on analysing the data, taking action and improving business decisions. Providing sales management with timely, accurate and relevant data was a key requirement. The ability to identify sales effectiveness on a product, sales region and distribution channel basis was very limited before. Barings was previously unable to show its desired level of granularity on clients and relationships. Today, Barings is able to drill down on an individual salesperson, region, product or distributor. Management can access accurate data real-time to make adjustments to sales efforts.

Fee processing has become STP and operates largely on an exception basis. It requires little human intervention as the valuations are loaded directly from fund accounting systems into REVPORT™ and the REVPORT™ system generates the fee calculation and fee invoice automatically. The improved process has reduced the invoicing cycle dramatically.

For the first time, Barings has the data to drive the annual sales and revenue planning process. They can show predictive sales behaviour, set sales targets and track results. Factual results data can now be coordinated with sales’ knowledge of the customer to drive improved decisions. The solution provides revenue information on clients, applies market mix assumptions, and cash flows against a revenue plan.

Barings benefited from implementing Bonaire's Fee and Revenue Management solution by providing timely access to accurate data, which drives profitability analysis by product, sales channel and client. The data is accessible to business people and not held captive by IT systems or personnel. The identification and pro-active management of key global client relationships facilitate strategic planning. Tactical sales management is aided by scenario analysis, fee modelling, and predictive sales behaviour and detailed monitoring of sales team and product productivity. The strategic insights which are an outcome of the automated, consolidated client, revenue, AUM and sales information enables Barings to create forecasts, track results and adjust tactics on a real time basis in order to drive profitability. In addition a significant return on investment was achieved with the actual reduction of staff, which resulted from the automation of largely manual processes.