Maximising Optimisations: Benefits of Internal Reference Data Usage Metering with Xmon

As presented in one of our previous articles “Xmon: Managing Reference Data Flowing Within The Organisation”, Xmon has the capability to monitor reference data requests flowing between internal systems. This is especially useful to do in organisations that leverage capabilities of an Enterprise Data Management (EDM) platform, as it enables deeper tracking of data flows and a more complete understanding of usage patterns. In this article we illustrate the benefits of such an integration and highlight how market data officers are able to fully view and manage the flow of market data throughout the whole organisation.

Enabling Internal Cost Allocation

 

The above diagram illustrates how Xmon can be integrated to track data flowing into the organisation, i.e. from external data vendors, as well data flowing within the organisation, i.e. from internal data distribution systems, such as EDM platforms to internal consumers.

By defining the same commercial model for the ‘Internal Requests Contract’ as the vendor’s rate card, Xmon is able to reconstruct a complete cost profile for each internal consumer, and produce a true cost allocation by consumer or cost centre. Consequently, this allows market data officers to allocate spend fairly to each business line/consumer, based on their actual consumption.

 Monthly cost allocation by internal system/consumers

 

In addition to providing cost transparency to end data consumers, Xmon can also deliver a Return On Investment (ROI) dashboard, which measures the efficiency of the internal data distribution platform. It calculates the savings generated by consolidating the requests for market data internally before acquiring the actual data from the vendors.

Return on Investment dashboard measuring the efficiency of clients’ internal data distribution platform

 

Enabling Data Lineage

Maintaining data lineage is crucial for ensuring data integrity, compliance and cost efficiency. Xmon takes data lineage to the next level by offering field-level visibility and look-through capabilities, by tracing data flow from data acquired from the vendors to its final consuming applications. This data lineage is made possible thanks to the definition of field dictionary synonyms, which maps equivalent fields between vendors’ mnemonic and internal data distribution layer dictionary.

In addition to this field-level lineage, Xmon can report on the list of security ID’s requested by each consumer, which among other things, serves as a base for calculating a fair cost allocation based on actual consumption.

Enabling Cost Optimisation

With its advanced reporting capabilities, Xmon’s transparency empowers organisations to identify opportunities to mitigate their market data spend and ensure they only pay for the data they actually consume. Thanks to the field-level data lineage we can easily trim unnecessary costs by identifying fields which are collected from the vendors but not used by any internal system. In addition, reporting on the internal consumer usage enables market data officers to highlight to the business some expensive categories triggered by just a few fields and discuss alternative solutions to source such fields using a different commercial model from the same vendors for optimisation. Alternatively, the universe of securities requesting those fields can be trimmed down.

The analysis described above is able to generate additional savings between 10% to 15% of total spend, and importantly, enables fair spend allocation and powerful usage metering for data flowing within the organisation.

If this article is interesting to you and you would like to find more about this topic, please get in touch, we would love to help you!