MIT Case Study: Learning how to work smarter at PSP Investments

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Jeanne Ross, Director at MIT Sloan School of Management and author of "Enterprise Architecture as Strategy" wrote this case study about my work at PSP.

Jeanne Ross, Director at MIT Sloan School of Management and author of "Enterprise Architecture as Strategy" wrote this case study about my work at PSP.

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  • “Level 1 BFM describes roles, main tasks and data elements, types, and stewardship. A level 1 process starts and ends within a single function of the BFM and consumes and produces information from/for other processes in other functions. This insures clear process segmentation and isolation.” “The BIM initial derivates element set was design by Mike Bennett in 2007. With PSP’s support, Mr. Bennett then expanded this work into the EDM council semantic repository.”
  • Comment from PSP: For easier access to information, we prefer SQL views, which all reporting tools support (including ad-hoc reports from Microsoft Office and SharePoint) to web services which often require IT to deploy specific software to users before they can access it
  • This is the Public Markets function. Processes in red have projects attached to them. Top row is target (process) architecture. Bottom row is the enterprise data bus; space between shows data movement into and out of enterprise data bus. Middle (big) row shows that systems don’t cross processes, in general, and that they don’t directly feed each other data.


  • 1. The Information Based Organization: Learning how to work smarter at PSP Investments
    November 12, 2010
    This research was made possible by the support of CISR sponsors and patrons.
    Peter Reynolds, Cynthia Beath and John Mooney contributed to this research.
  • 2. Working smarter through information managementat PSP Investments
    Public Sector Pension Investment Board of Canada, founded 2000
    Fiscal Year 2010 Net Assets C$43.6B
    Statutory goals: manage funds in the best interests of contributors and beneficiaries, maximizing investment returns without undue risk of loss
    How PSP works smarter:
    Focus on clean data enterprise-wide as PSP moves from a diversified to a coordinated operating model
    Need to understand full portfolio to manage exposure risk, evaluate opportunities, and measure performance to be effective at active investment management
    Need accurate and consistent financial reporting
    Need consistent transaction and position data for business unit level analysis and decision making
    Enterprise architecture: business function model, business information model, and enterprise data bus as part of a Service-Oriented Architecture
    Organization structure and roles: governance, data stewardship, business integration team and data quality & optimization team
  • 3. Enterprise architecture models enable separation of processes, information and roles
    Business function model (BFM)
    Details six business functions, each with a process owner: public markets; private markets; investments; finance & treasury; process and information management; and enterprise support
    Defines business function boundaries, process decomposition, and process governance; each business function has a process owner
    Shows what information is produced and consumed in each process, ensuring process segmentation and isolation
    Business information model (BIM)
    includes top-level information domains, with clear boundaries and data governance model.
    Shows how applications are used to perform tasks in BFM.
    All business cases must specify how a project impacts BFM and BIM
  • 4. Examples of top level of Business Function Model and Business Information Model
    Source: PSP internal documents, used with permission
  • 5. Enterprise data bus supports PSP’s data focus
    Enables data cleaning via PSP rules at the source, so each type of data exists in only one version and is usable by everyone
    Only master data moves between systems
    Decouples data from systems and processes, simplifying changes in any of them
    Implemented via reusable information services using SQL; supported by all reporting tools
    Different from a typical data architecture in which all data goes to a data warehouse, which leads to a complex logical database interface and tightly coupled systems, processes and data.
    Raw data
    sed data
    Master data
    Capture, ensure accuracy and timeliness
    Apply semantic and quality rules
  • 6. High Level BFM : processes, systems and datarelationships for one function
    Source: PSP internal documents, used with permission
  • 7. PSP’s organization for working smarter
    Governance committees for each of the six business functions
    Project governance in accordance with target architecture
    Portfolio prioritization  which data is cleaned and mastered next
    Data quality and optimization team – across the organization
    Monitors data quality
    Fixes exceptions as per PSP rules
    Business integration unit – outside of IT
    Data governance (prior experience showed IT should not be responsible for this)
    Oversight of process governance
    Has credibility to work with both IT and business groups
    Data stewards are accountable for a given piece of information. Is “last gate”: person who must say the data is right; often the producer.
    Example: transaction data: trader writes raw transaction, counterparty vets it to make it a master executed transaction, and back office transforms it into a confirmed transaction. Different entities, so different data, and different stewards, even though in most cases the physical data about the transaction is unchanged.
    External data (e.g. Bloomberg) has no steward, as PSP can’t fix its errors
  • 8. Working smarter in practice
    Engage the business to define information needs
    Proactively explain why data, drilldown, and analysis is important, focusing on real cases
    Manage the business’s expectations on timeframes
    “Feed” data to the organization
    COO requests ad-hoc reports for complex situations that uses data that he knows exists
    Show the value of clean data for speedy reports
    E.g., response time if ad-hoc reports had clean data is 10x faster
    Make sure the infrastructure is reliable
    If IT can’t keep systems running, they can’t be trusted to implement the new architecture and data capabilities
  • 9. Benefits to PSP of working smarter
    Clean, transparent, consistent data entered only once reduces operational risks
    Lower data cleaning and maintenance costs, fewer external data sources, and reuse of services that expose the data reduce operational costs
    Fully encapsulated processes, data and systems, which can then be optimized independently increase business agility
    More efficient and effective risk management removes need to add staff even as the organization grows
    New types of risk analysis are possible with the proper data
    Systems are up more because a major cause of failure was bad data