Silver

In this 48-page, 35-exhibit study, Alphacution goes to new lengths to apply the axiom that effective management requires effective measurement – and begins the process of supporting its hypothesis that there are persistent – and ultimately, predictable – relationships between trading and operational factors for asset managers. With most asset managers being private, support for this hypothesis also means that technology spending – a rarely observable data item in this universe – can be estimated with more readily observable and contextual data about AUM and employee headcount. Moreover, it turns out that by understanding the relative positioning of technology capital (via spending patterns) with that of human capital, we achieve an unprecedented and quantitative level of understanding about the underlying scope of automation embedded in that firm’s strategy selections. These findings ultimately give birth to Alphacution’s Asset Manager Ecosystem Map, and the deeper exploration into its structural alpha, active management, and passive management zones. The complete case study is available to premium and silver subscribers or via individual report purchase.

This 33-page, 29-exhibit report - distributed under our alliance with Aite Group - applies Alphacution's modeling methodologies to the global IT services sector and leverages that output to showcase the evolving role that IT services plays for global banks:  Today, outsourced IT services are firmly embedded in all industries and most large corporations. Alphacution’s message to financial sector clients and other buyers of IT services is both blessing and curse: The global IT services sector continues to be dominated by lowest-cost, predominantly India-based human capital, and the motivation to engage with these services continues to be, as it seems to have been all along, about labor arbitrage, or the savings harvested from the reduction of high-cost, U.S.- or U.K.-based in-house human capital in favor of lowest-cost, leased human capital. Although the expectation to improve performance—via higher-quality output, more efficient output, or some other cocktail of innovation—is rarely made explicit, we believe that the potential for enhanced process efficiencies adds value to the equation. This is the blessing part. The potential curse is more nuanced...

This 36-page, 29-exhibit study – a version of which was published under a data and analytics partnership with Aite Group in October 2016 entitled, “Return on Technology and the T-Greeks Framework: In the Beginning…” – introduces a new way of examining IT spending behavior within the financial services industry. It turns out that it does not matter what a firm spends on technology, after all. What actually matters most is what a firm receives for its investment in technology. In this report, Alphacution outlines its discovery that the return on technology (RoT) concept is quantifiable by normalizing and benchmarking the difference between performance (i.e., total net revenue) and the component cost of that performance (i.e., total technology spending). The four primary technology spending categories used in this modeling framework include 1) hardware and other infrastructure, 2) software and other data-processing functionality, including both internally generated and purchased software solutions, 3) IT-related human capital, including both technology and data management personnel, and 4) third-party data subscriptions. There are currently five closely related analytics within Alphacution’s T-Greeks framework, namely T-Spread, T-Beta, T-Alpha, T-Theta, and T-Vol. Finally, this study demonstrates that T-Greeks are actionable now. They can be strategically used to more efficiently monitor and navigate the ongoing business transformation process. Moreover, these analytics and benchmarks can be used for more tactical transformation, ultimately providing more detailed visibility for solution selection, shifts in the mix of human capital skills, and workflow re-engineering and replacement.

This 48-page, 36-exhibit report, which was initially published under a distribution rights agreement with Thomson Reuters in 2016, represents the first major study from Alphacution’s newly launched research platform. The findings in this content are based on the modeling of technology spending and other operational analytics from 58 of the largest banks in the world (representing 16 countries and 11 currencies) over the 11-year period 2005 to 2015. Chapter themes in this report include key drivers of the Global Financial Landscape, introduction and explanation of Alphacution’s Standardized TCO Framework, detailed review of the Analytical Foundation supporting Alphacution’s technology spending estimates, TCO Benchmark construction from various perspectives, and finally, the use of this modeling output to enhance Tactical Transformation as well as concluding remarks on one of Alphacution’s core research themes, “Return on Technology.” It turns out that what is most important about analyzing technology spending patterns is not the absolute spend, but the what firm receive for that spend.