If You’re Sticking with PORT – Don’t Just Sit There!

It’s the first day after the cut-off for the POINT transition, and you are just settling down at your desk with the Wall Street Journal and a cup of hot coffee. You log in to your beloved performance system, expecting everything to look the same as the day before, and...surprise! You dropped the ball on the POINT to PORT transition.

Rewind back to January 2017. What could you have done differently?

In a best case scenario, we’re told that PORT will mimic POINT in a “plug-and-play” type capacity. Meaning, users will be able to plug out from POINT and plug in to PORT, without any major upsets. For the purpose of this article, we’ll continue to assume a best case scenario for a feature-to-feature match on the systems-side. In that case, where could this transition go wrong?

First, let’s focus on the data migration. For any firm, the POINT to PORT transition is the perfect opportunity to assess the data management process and determine which areas are top candidates for cleanup. Most often there are many opportunities to cleanup various workflows and sweep out any band-aid style approaches that were previously put in place as workarounds. No matter how many features that Bloomberg is able to match – any inefficiencies going in, will be the same inefficiencies coming out. During the requirements period, there is an opportunity to evaluate what your firm wants out of a performance system, including must-haves and nice-to-haves, and plan your features accordingly.

Next, it’s also a critical time to evaluate the potential impact on upstream and downstream systems. As we covered in a previous article (This Old Performance System) there are several preventative measures that a firm can take to review the workflow process, including:

  1. Identify which upstream and downstream systems will be impacted by the POINT transition.
  2. Map out what kind of data flows in and out of the systems and how. The use of workflow diagrams can be extremely helpful for this purpose.
  3. Document all workarounds and/or ad hoc patches, and differentiate whether they were designed as either:
  • A “quick fix” because there were features of the up/down stream systems that were not compatible with POINT.
  • Enhancements to simplify workflows.

Finally, January 2017 is an important time to consider your implementation resources. Are the right people in place, beyond your Bloomberg representative, to support and ensure a smooth transition? As part of IMP’s proprietary heat mapping methodology, we’ve identified three main skill sets required to ensure that you have the right people on board, including:

  1. Deep knowledge of data required to support equities, fixed income, and some derivatives asset classes in performance and attribution systems.
  2. Understanding and experience with data importing, reconciliation, and reporting.
  3. Deep technical knowledge for data sourcing and mapping for all instrument types handled within the performance and attribution system.

More on resource heat mapping will be available in our POINT to PORT resource center and LinkedIn Group.

Please note, even the most experienced resources will need an adequate amount of time to prepare for the final migration. The sample roadmap below illustrates the optimal timeline for the transition – whether your firm is transitioning to PORT, or even to another system. Don’t underestimate the time it will take to complete each stage of the roadmap. The testing period with feedback loop is especially critical to plan after the initial data mapping to ensure a seamless workflow for users.

All projects have their bumps in the road, and despite best efforts, there may be unforeseen impact on workflows or up/down stream systems. In that regard, a plan should be in place for subsequent phases of the rollout. By phase 2, we should have a clearer picture of what PORT looks like, and can evaluate the actual impact on compatibility with other systems. With the right people and plan in place, there should be minimal surprises after your transition goes live.

For more information on how you can optimize your transition from POINT to PORT, contact Mike Toomey at mtoomey@impconsults.com or call 508-272-8645.

 

 

 

 

 

 

 

Valerie Villegas-Hoag

Valerie Villegas-Hoag has in-depth experience in the financial services industry.  During her tenure, she has developed in-depth knowledge of portfolio performance best practices including Global Investment Performance Standards (GIPS), portfolio management, wrap v. non-wrap composites, carve-out calculations, and investment vehicles.  Valerie has managed the performance calculation and reporting function for both index and composite level data. 

While serving as a Senior Operations Analyst, Valerie performed key functions in support of performance measurement including analyzing investment performance, turnover, dispersion, and tracking errors on a monthly basis.  In addition, she produced attribution reports capturing discrepancies.  Valerie also supported new and current product development, and was responsible for process improvement targeting inefficiencies in new and current products with a focus on illiquidity of ETFs, portfolio turnover, and possibility of model delivery delay due to vendor constraints and/or international timing differences.