When investment firms talk about improving their reporting, they usually mean one of two things: better technology, or more headcount. Both can help. But the firms that see the most consistent improvement in report quality, report content, timeliness, cost efficiency and future-proofing are the ones that address all aspects of the operating model – the way people, process and technology are combined to produce and distribute client and fund reports.
So what does a good reporting operating model actually look like?
Define what reporting is for
This sounds obvious, but many firms have never explicitly answered the question. Is reporting primarily a regulatory obligation, a client servicing and retention tool, a business development asset, or all of the above? The answer shapes decisions about investment level, quality standards, turnaround times, and how much personalisation is justified for individual client relationships.
Firms that treat reporting as a pure compliance overhead tend to underinvest in it and wonder why clients disengage. Firms that treat it as a client relationship tool tend to over-engineer bespoke outputs that may be expensive to maintain.
Clear ownership across three domains
A well-designed reporting function has clear ownership in three areas.
Data ownership – someone is responsible for each of the required data attributes, ensuring the data that feeds into reports is accurate, timely and approved for publication. In most firms, this sits with teams in operations or data management.
Production ownership – someone is responsible for the report production process itself: overseeing the content and display within the report templates, workflows, timelines, quality checks and distribution. This is typically the reporting team or client servicing function.
Content ownership – someone is responsible for the investment narrative: commentary, forward outlook, the story the report tells about portfolio decisions. This generally sits within the investment or senior relationship teams.
Problems arise when these three domains are blurred and responsibilities are not defined and clear. There also needs to be an overall owner of the reports – this falls to the reporting team, who may not contribute every element within the report, but has full authority to ensure all the areas contribute as agreed, to create the completed report.
A production schedule that actually works
The production schedule is the operational backbone of the reporting function. It should define every step from the period-end data, through report scheduling, report review and sign off, to report distribution, with named owners and deadlines for each step.
A common failure point is investment and market commentary. Investment teams are typically not given a firm timeframe to provide the commentary with consequences for missing it. The result is that commentary arrives late, compresses the review and sign-off window, and forces a choice between a late report and a report that has not been properly checked.
With Reporting as a Service – such as that provided by Opus Nebula – the commentary can be reviewed and checked separately and simply digitally inserted into the report packs at the end of the production process. This more flexible workflow model allows for multi activity streams, tightened deadlines and no loss of accuracy or timeliness.
Technology that removes manual steps
The technology layer should automate everything that does not require human judgment: data ingestion, calculations / aggregation, template population (including client specific variations), and distribution. Every manual step in a reporting process is a potential error point and a potential bottleneck.
What the technology cannot fully replace is the human review layer. A good operating model includes a structured review step where a senior person with reporting expertise checks output before it reaches clients. However, a modern reporting system will be undertaking these checks and highlighting where users need to focus their attention. With Reporting as a Service, thanks to the use of data validation checks, automated workflows and content aware reports, no finished report can be incomplete, inaccurate or stale. These types of checks provide investment firms with huge efficiency and productivity gains compared with an older legacy system.
A continuous improvement loop
The best reporting functions treat their output as a product and run a continuous improvement process. After each reporting cycle, they ask: how can the process be improved further, what else do the investment team want to include in their reports, have any clients asked for anything new or any changes to their reports? Having a review and update process that is efficient and affordable, all such changes can be accommodated in the next reporting run.
Firms that do this consistently produce noticeably better reports after two or three cycles than those that treat the reporting cycle as a problem to get through and then forget about until next quarter.
Frequently asked questions
How big does a reporting function need to be?
The right size depends on reporting volumes, complexity of data and reporting outputs and how much is supported by technology versus manual effort. Firms with modern reporting platforms can support large client books with small, specialised teams. Firms running manual processes typically need significantly more headcount to achieve the same output, with less consistent quality.
Should the reporting function sit in operations or client services?
Either can work, provided ownership and accountability are clear. The important thing is that whoever owns reporting has both the authority to enforce production processes and production deadlines with the all contributors, including the investment team, and a technical set-up that is fully supported and available 24/7. A reporting function that is purely administrative tends to lack the clout to make the process work and improve it over time.
How do you measure reporting function performance?
The standard metrics are volume of reports produced vs volume required (is the system or process constraining the business), timeliness (percentage of reports distributed by the agreed deadline), accuracy (error rate per reporting cycle), and client satisfaction (feedback and query volumes). A score for the ability to evolve and improve the reports should also be allowed for. Cost per report is also a useful efficiency metric, particularly when comparing in-house production against a managed service model or the more modern outsourcing of the reporting system model.