Joining the growing number of large-size vendors launching outsourced data management solutions, SunGard Data Management Solutions’ last month revealed plans of its referencePoint Managed Data Service (rMDS), which is scheduled to begin operations in the first quarter of 2005.
Based on the ReferencePoint platform that SunGard acquired through its purchase of Fame Information Services, rMDS will offer a “fully managed, outsourced solution for the loading, cleansing, formatting, enrichment, storage, management and distribution of (reference and market) data to a variety of downstream systems, backed by a help desk … (for) customer support”
In an effort to ensure it adopts best practices in meeting the data management needs of clients as well as internal SunGard business units, SunGard is in the process of forming an advisory panel – Banc of America Securities is the first named member – to help specify priorities and features of the service.
Dale Richards, president, SunGard Enterprise Data Management Solutions, says, “We already have an existing client in the form of SunGard itself. This has given us the budget and resource to build out ReferencePoint for this proposed internal use to streamline SunGard’s data sourcing and management efforts across its multiple operating divisions, saving the company literally millions of dollars in data management spend. So we’re not starting from scratch, and it makes sense to leverage this facility to provide an outsourced service for clients.”
The first iteration of the service will provide pricing and securities master cross-reference data. This will be expanded by mid-2005 to offer detailed corporate actions data. Following that, SunGard intends to provide counterparty-related data and is currently considering its approach of whether to develop a service internally or work with partners in the space.
Richards says that SunGard has been in discussions with a number of client firms and the feedback has been that some clients do want an outsourced data management solution.
SunGard aims to both convert some existing clients and bring on board new ones. Banc of America Securities involvement in the advisory panel is an encouraging sign. As Roseann Palmieri, managing director of data management for the bank says, “Data management is central infrastructure to many of our business initiatives, and this is a valuable opportunity to guide the creation of a … service that will meet both the tactical and strategic requirements of the bank.”
As well as providing a core data management infrastructure, there is a requirement for client-specific functions that will satisfy the many consumers within a financial organization. Says Richards, “Views of what is a golden copy vary by department. For example, one department may prioritize their vendor sources, while another may provide rules or algorithms for the method of cleansing data. We will work with the business groups to help define the de-partmental view of their golden copy.”
As such, SunGard has been building up its consultancy practice to meet the customization needs of clients. It recently brought in Mark Odho, who has previously worked at AIG, Reuters, and WoodGundy, to head the consultancy practice.
SunGard also views its partnerships with software vendors, integrators and data vendors as essential to the process. Richards says that SunGard is in discussions not only with other financial institutions, but also with software companies, data vendors, industry experts, and standards organizations about involvement in its advisory panel.
The vision is big. “We will provide a holistic solution across the entire food chain, from the initial input, the data cleansing and management through to the distribution to downstream client applications. This will be helped by our work with partners and clients,” says Richards.
He does acknowledge that it is a big sell and that institutions generally aren’t quick to hand over all functions to a third-party, but says that the service can be proven in a phase-by-phase approach.
Since the acquisition of Fame, SunGard has been evaluating what enhancements and new capabilities have been needed for its ReferencePoint platform and how its existing services, primarily Data Synapse’s business rules and matching capabilities, could be integrated into the solution. The work on the resulting build out, along with ongoing data cleansing operations, has been conducted by its India-based development team. SunGard also intends to move some of its basic data analyst functions offshore over time.
Although Richards declines to comment on the budget, SunGard’s spend on the reference data management service is believed to be in the 10s of millions a year.
The longer-term corporate strategy at SunGard is “to keep building and investing. Fame is not the end of the story,” says Richards. As Reference Data Review reported earlier SunGard has looked at other potential acquisition targets, including Asset Control, although nothing has yet come to fruition. Richards declines to comment on any specifics, but says, “We are always looking at other partners and are constantly evaluating whether to build or buy to help us evolve our offerings.”