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IT Complexity, Budget, ROI Key Challenges for EDM Projects

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Confirmation that understanding of the importance of enterprise data management is growing among C-level executives comes this month in a new report commissioned by GoldenSource. According to the report, based on 17 interviews with CTOs and CIOs within financial services firms in North America and Europe, 47 per cent of respondents say their firms have in place an enterprise data strategy supported by senior management.

Risk management and “business enablement” are the key drivers for investment in EDM, the survey finds, eclipsing the old operational efficiency/cost reduction argument – and this despite the fact that a significant 27 per cent of respondents believe the problem of trade failures has worsened, due mainly to increasing volumes of complex instruments like credit derivatives.

IT complexity came top of the list of “challenges in achieving EDM”, followed by “finding the right budget” and “lack of concrete ROI”. Of the latter the report states, “Those that found it a significant problem said it was difficult to get long-term projects, such as data management initiatives, pushed forward when there was a competing and constantly growing list of short-term priorities.”

Tim Lind, senior vice president, product strategy at GoldenSource, says “one of the ongoing frustrations” is the intransigence of some firms in terms of investment in data management. “Financial services is essentially a data management profession, therefore it is remarkable that firms question the need to implement an appropriate structure to support data, and continue to insist on needing a proven ROI,” he says. “You will never know with precision how much a dollar invested in infrastructure will yield in terms of payback; people are chasing something which doesn’t exist – a rock solid business case based on metrics.”
Ironically, firms don’t seem to have the same trouble finding budget for business applications and additional data sources: these areas came out as top priorities for planned expenditure in the survey. “But the more applications you throw into the mix, the greater the complexity becomes. The return on investments in new applications and data sources cannot be achieved fully unless firms also invest in the necessary infrastructure to manage those applications and sources,” Lind warns.

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