By Laura Jesson
In December 2015, Bloomberg announced they were acquiring Barclays Risk Analytics and Index Solutions (BRAIS). The announcement went through the investment management industry like an emergency weather alert—an urgent call for planning and action. The deal, originally expected to close in April, is now expected to close by July of this year. As soon as the deal closes, the clock will start ticking down the 18 months until Barclays decommissions POINT forever, and a large majority of POINT clients feels that 18 months is too short to smoothly transition to a new solution. Most are also concerned about the potential for declining support during the transition, as POINT employees are likely to be looking aggressively for positions at other firms.
Combining the market-leading Barclays indices and their superb team with our data management, analytics and distribution will provide more independence, liquidity and transparency to the marketplace, improve industry innovation and further meet the diverse needs of our global client base.
- press release on BRAIS acquisition, December 16, 2015
Roughly 200 investment managers around the world use Barclays POINT every day. Many have been using it for more than a decade, and POINT functionality is deeply embedded at these firms. Clients use POINT as a source of index data and for many highly complex functions including portfolio management, risk analysis, and performance measurement and attribution. Each of these 200 firms now has a decision before them: to convert to Bloomberg PORT or to seek out alternatives. However, the detailed information to make this decision is not readily available. POINT clients have told us that Bloomberg has been helpful fielding questions. But until the deal closes, Bloomberg won’t be able to say definitively which POINT functionality they will carry over to PORT, making analysis and decisions significantly more difficult for client firms.
Given the tight timing and the complex technical and logistical issues, what should you do? Clients use POINT in many different ways, shop-to-shop, and desk-to-desk. So each must develop their own roadmap, their own possible stopgap measures, and their own list of replacement options, one of which might be to use the Bloomberg PORT product by itself. The best way to begin is by assessing your current state, thoroughly analyzing and documenting all the ways POINT is embedded in your various investment processes. You should fully understand all data inputs and outputs, as well as the specific use cases and asset types that POINT covers.
Most POINT clients are still assessing their current state, but once they know the details, they can begin strategizing about their future state options. Some might need to satisfy only existing functional requirements, while others might want to take advantage of the opportunity to expand their requirements list.
The extension of the expected deal closing date from April to July has given POINT clients a little breathing room. With a better idea of the number and types of solutions they need, firms can begin preliminary planning for implementation—prioritizing tasks, securing budgets, taking inventory of internal skills, and supplementing those skills with external resources as necessary. But a finite number of external resources possess the required skills. So like your neighbors all scrambling at once to buy bread and milk before a storm, all 200 POINT clients around the world will be competing simultaneously for these resources.
In March 2016, Cutter Associates surveyed our investment management clients and found that 15% of those using POINT expected to transition to the expanded Bloomberg PORT solution, and 40% expected to transition to systems other than PORT. Because of the breadth of data and functionality offered in Barclays POINT, most firms will very likely need to implement more than one system to replace it and achieve their desired future state.
Among the POINT clients surveyed who expect to transition to Bloomberg PORT, many had serious concerns and questions, including the following:
Vendors are aware that most clients will need more than one system to replace POINT, and they are in strong competition to earn the business. But POINT clients are considering all of their options for replacing POINT functionality short term and long term, including the following:
There’s no need to panic, but now is the time to act. Like homeowners scrambling to prepare for a storm by buying bread, testing flashlights, and considering evacuation options, POINT clients must quickly secure adequate funding and staffing, and strategize about potential stopgaps and contingency plans.
While you’re defining your current state and your future state requirements, we recommend attending to a few additional tasks:
And remember, Cutter Associates can help you accomplish all of these tasks. We can help you assess your current state, devise a workable transition roadmap, and design your future state. We can also help you search for vendor solutions and select those best suited to your needs. Contact us today.
About the Author
Laura Jesson has more than 15 years of experience in the financial services industry as a project manager, business analyst, and consultant. She joined Cutter Associates in 2013. Previously, Laura spent eight years working at Wells Capital Management and Evergreen Investments, where she managed investment operations projects. She also worked at Omgeo as a member of the Central Trade Manager (CTM) product design team. Laura started her career at Andersen Consulting (now Accenture) as a process consultant supporting a variety of projects for clients in the financial services industry. Laura earned her B.A. in Economics and Psychology from Amherst College.
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