Franklin Park, LLC is an investment advisory firm headquartered in suburban Philadelphia,
Pennsylvania that provides customized private equity solutions, including portfolio
planning, investment manager selection and portfolio management to its institutional
If data is the life-blood of the financial services industry, the Internet has rapidly emerged as the primary circulatory system to connect financial advisory service providers with their investor clientele. Direct access to investment documents affords a major convenience to buyers. Taking this a step further, direct client access to underlying financial data, coupled with powerful analytical tools, enables better informed and timelier investment decisions. Franklin Park viewed the Internet as an opportunity to “turn the computer monitor around” to face their customers. The expectation was a win-win scenario: premium-level services could improve client satisfaction and retention. In addition, the firm could realize significant cost efficiencies by automating the collection and delivery of vast amounts of financial information.
As an investment advisory firm focused on private financial markets, Franklin Park routinely deals with collecting, analyzing and publishing enormous amounts of complex financial information. They invested considerable time exploring alternatives to streamline this process. Commercial software packages and SaaS offerings lacked key capabilities, were limited in the ability to integrate with existing in-house systems, and/or were cost prohibitive. As a result, Franklin Park embarked on a path to develop an in-house system using MS Access and SQL Server.
The approach worked well for Franklin Park until they encountered several needs that were beyond in-house technical expertise including: (1) the ability to provide secure client access to investment related documents over the Internet, and (2) the ability to provide clients with more advanced investment analytical capabilities, which required direct access to underlying financial data and the development of industry-specific performance calculations such as the Internal Rate of Returns, (IRR), which is widely regarded as the most popular and appropriate means for measuring private, illiquid investment performance.
Franklin Park approached multiple consulting firms to encode an IRR algorithm in their proprietary SQL Server database, and both fell short in their attempts. Programming an IRR algorithm is easier said than done — even the IRR functions in Microsoft’s Visual Studio .NET and Excel produce different results! Moreover, in order to meet Franklin Park’s customer-facing needs, the IRR encoding effort needed to satisfy three requirements which are frequently mutually-exclusive when running complex calculations on very large sets of data over the Internet: (1) accuracy, (2) performance and (3) flexibility.
Franklin Park needed a consulting firm with expertise in complex calculations. They needed a consulting firm with expertise in MS Access and SQL Server integration and performance optimization, so they contacted PCA. PCA and Franklin Park agreed upon a three-phase approach: (1) build the IRR calculation in SQL Server to enable internal efficiencies for generating investment performance reports and analyses; (2) build and deploy a simple, web-enabled document management system that would allow Franklin Park clients to access their investment related documents over the Internet in a secure manner; and (3) modify the IRR calculation in SQL Server to enable Franklin Park clients to perform investment analysis directly over the Internet.
Once the three phases were complete, Franklin Park would succeed in turning the computer monitor around to face its clients, and save valuable time and effort. From an engineering perspective, the three phases was the logical sequence and thus reduced technical risk. From a business perspective, the three phase approach kept the project focused and thus reduced risk to the project budget and schedule.
Phase I: Once the plan was approved, PCA implemented the IRR calculation in Franklin Park’s production SQL Server database, and testing confirmed that the algorithm produced the expected results. While this first step was successful in gaining internal efficiencies, Franklin Park still relied on surface mail and email as the primary means to deliver information to its clients. The computer monitors were still facing Franklin Park investment professionals.
Phase II: Franklin Park and PCA developed a web-enabled document management system that allowed Franklin Park clients to retrieve information related to their investments over the Internet, including investment accounting and legal documents. Success of this phase would be measured by several factors: (1) simplicity of the process for Franklin Park, (2) ease of use and flexibility for clientele, (3) performance and (4) security. PCA met the first objective by simply extending Franklin Park’s existing report generation and management methods. Storing a new document within a client folder on the Franklin Park network now also meant it was immediately available to the client via the Internet. The client-facing solution was a Microsoft ASP.NET web application that allowed clients to browse their secure document file directories and download reports as needed.
Franklin Park clients now had on-demand access to their investment related documents over the Internet. The computer monitors were now facing the client, and with less effort required of Franklin Park investment professionals! Over time, the new system would enable Franklin Park to gradually replace and/or augment traditional phone, surface mail and email communication among their client base. Cash flow statements, financial reports, legal and other financial documents were now available to authorized parties via a secure and substantially streamlined process, which yielded a significant improvement to information that was available to clients, and a significant reduction in efforts all around.
Phase III: The final phase in the evolution of the system was to enable Franklin Park clients to perform investment analytics directly on their data over the Internet. PCA re-wrote the IRR algorithm so that it could: (1) accept multiple dynamic variables including investment name and date ranges, (2) achieve optimal performance, and (3) be incorporated within customized client reports in ASP.NET dynamic web page format. All reports could now be generated on demand using client defined parameters, and all were directly exportable to Excel format. Rigorous testing of dynamic IRR queries confirmed that phase 3 was successful in providing clients with the investment analysis capabilities they required.