Ryan Bateman had never been a CTO and Sands Capital had never had a CTO—it was a curious pairing. But Bateman has come in and established his credibility, and now he has to keep that winning streak going. By Anthony Malakian
There is an axiom in the world of sports that states that winning cures all ills. This is the case in business as well—any manager will say that there’s an enormous amount of pressure to get off to a good start when taking over a new job.
The same holds true for chief technology officers like Ryan Bateman.
A little more than 12 years after he graduated from Northwestern University, Bateman was named the CTO of Sands Capital Management. That may not seem too surprising to some technologists, but consider this: Bateman is the only person dedicated to IT at Sands, which has about $20 billion under management, and he graduated with a degree in English studies and not computer science.
Growing up in a small town in Missouri, Bateman never aspired to run IT for an asset manager; the only thing he really wanted to do was get out of the sticks and head to Chicago. So he chose Northwestern, and since he was the creative type, he studied literature and music.
Like many before him, Bateman found that there wasn’t much of a living to be made in the arts, but understanding technology just so happens to use a similar part of the brain. “There’s a lot of interplay between the people who are good at music and good at technology,” he says.
After moving to Washington DC, he found his way into the world of technology as an engineer at investment bank Friedman, Billings & Ramsey (FBR), where he spent 10 years learning the business. Bateman learned IT on the job and by signing up for night classes.
After a two-year stint at vendor Ipreo, Bateman found himself at the right place and time and was handed the Sands Capital job. But moments of opportunity are fleeting, and Bateman needed a win. As a result, he decided to steal a page from talk show queen Oprah Winfrey’s playbook: Everybody got an iPad.
The First 90 Days
“When you’re young there’s a lot of pressure because you really want to demonstrate quickly how good you are, and you almost have to take a step back from that and say, ‘You know what? It’s not about me; it’s about the organization and doing things in a way that benefits the organization,’” Bateman says.
Sands Capital, which is a long-hold equity firm, outsources its entire infrastructure. After the downturn of 2008, like many other capital markets firms, Sands—which is led by chairman and founder Frank Sands Sr., and CEO and chief investment officer Frank Sands Jr.—wanted to diversify its portfolio outside of the US market and incorporate more global strategies.
But going global means a larger workforce, more complex investments, and the back office becomes more unwieldy—this, in turn, creates the need for a CTO to manage this ever-increasing web of complexity.
While Bateman had never managed technology for a global institution, he did spend some time running FBR’s International IT operations out of London for three years, and, perhaps more importantly, understood the importance of aligning IT with the business of a capital markets firm.
To help hone his skills, in his time at FBR he attained an MBA in international business from Georgetown University’s McDonough School of Business.
“I had decided that I knew the engineering, I knew the background technology, and I knew how to run systems and build software, but what I kept seeing was a lack of people in my department who could translate the business needs into the stuff that the teams were doing; there was a lot of friction between the business department and the people in technology with what they were executing,” Bateman says.
Bateman had been an engineer, he had run an IT unit with staff around the world, and he had studied the business end of the market on an academic level. Sands had never had a CTO before and wasn’t looking for a nuts-and-bolts technologist; it was seeking someone who could marry technology with the business. Bateman fit that bill.
The Giveaway Effect
The first 90 days for Bateman were spent addressing the firm’s basic infrastructure needs, which meant finding the low-hanging fruit. Bateman first addressed Sands’ email systems, networking and communications.
“I walked in the door fully expecting the need to prove myself, first as a knowledgeable technology expert, but also to turn around some bad trends that had already emerged,” he says.
But rather than going out and looking to embark on a complex overhaul, he first sat down with the business leaders and took notes. He followed them around. He learned which technologies they interacted with during their work days. He listened, paid attention and studied. The close-knit culture of Sands is of paramount importance and a techie coming in and rocking the boat wouldn’t have gone over well.
For Sands to truly achieve its goal of becoming more global, Bateman concluded that the firm had to first become more mobile. Investment managers frequently have to trek around the globe to find opportunities, lugging a bulky laptop and a sea of folders and papers. A tablet was the obvious choice to solve this problem, and the iPad, weighing in at less than two pounds, is also easily able to clear airport security.
Of course iPads are expensive—starting at $500 each—but Bateman found that management was on board. They approved giving everyone on the investment team iPads, and to keep things in line with the corporate culture, in the spring of 2011, they okayed giving associates iPads, too, so as not to create a division of labor.
Just as Oprah famously did when she gifted each member of her audience a new car, Bateman earned a lot of fans when he announced, “You get an iPad! And you get an iPad! And you get an iPad!”
The compliance and finance teams were markedly less enthusiastic. For example, several research associates found a way to circumvent the device’s security settings to create more free space and share documents. Their intentions weren’t sinister—they just wanted to make content sharing easier, and it’s not their job to think about corporate security and enterprise control. But, as a result, Bateman had to shut down the iPad’s drop-box functionality and Sands has since turned to MobileIron and Box.com for security and storage.
The iPads allowed Bateman to establish his credibility. It was an outward gesture that showed that he was listening to the users and that he was examining their needs and tailoring a technology strategy to those needs.
In addition to adding iPads, Bateman also implemented a new research management system. The core of the firm’s investment business is its proprietary research, being able to clearly document that research, and getting that research to the portfolio managers and decision makers.
“You can have great investment ideas, but if you don’t buy and sell the businesses at the right times—and we do that on a multi-year basis—then all is lost,” Bateman says. “You need great research and great execution.”
There was a legacy research system in place that Bateman says was not cheap and wasn’t doing an adequate job. Furthermore, it was run through the email system, which was leading to outages as users tried to cull through 20 years of history. So this was another relatively easy victory: Not only could he improve the research management system—he could also shore up the firm’s email system.
“One of the big focuses of our business—the long-hold equity business—is the concept that there isn’t a secret sauce or a black box; it’s about sound investment decisions through the research process and the execution of your research ideas,” he says.
Bateman turned to Code Red for this new implementation. He also looked at Advent’s Tamale system, but he preferred Code Red because he felt that the smaller company would fit better into Sands’ corporate culture.
He also conducted an in-depth examination of social media to see how, and if, it could be employed at Sands. The firm looked at developing an internal social media network for collaboration throughout the enterprise, but what it found was that people preferred to use email. They also looked at Twitter and found it to be an excellent consumption tool, but that not much could be made from it as an outgoing message producer.
“Social media, for us, is a powerful way to consume information, but I don’t think that there’s much value to engage in it outwardly,” Bateman says. “At the end of the day, we didn’t feel that social media was mature enough for business-to-business transactions. Our customers—institutional investors—are not on Facebook and they’re not communicating with us on any sort of social media platform.”
The Art of Consumption
Similar to Twitter, the iPad has proven to be an extremely powerful consumption device, but it’s not mature enough on the information-entry end of the spectrum. Sands bought Bluetooth-enabled keyboard hardcases for the iPads so users could write and enter data more easily, but access to the data—rather than data creation—has proven to be of paramount importance.
“We’ve found that the iPad is primarily a consumption device; there’s a dichotomy between content creation and consumption,” says Bateman, who adds that currently, about 80 to 90 percent of the iPad’s usage is for consumption.
Bateman is still looking at ways to turn the iPad into more of a two-way device. For example, he is exploring the idea of using trading apps that will allow portfolio managers to model and input their orders. He wants to allow workers on the ground to use their tablets to capture what they see and, if necessary, adjust and send info back to headquarters so the analytics team can crunch the data and disseminate it to Sands’ clients.
The Next Win
For Bateman, 2011 was about grabbing at the low-hanging fruit, improving the basics of the firm’s infrastructure, and gaining some quick wins. This year, he is focusing on the business application layer of Sands, which consists of large enterprise systems.
On the list of installations is a new portfolio administration system, fully implementing the research management system, and moving the firm’s data onto a network of relational databases.
“A lot of legacy systems need to be upgraded to compatible database technology, and we’re building out a data warehouse so that we can really analyze all our data,” Bateman says. “Right now, everything exists in silos, so we’re going to move all the systems toward the same database technology—which is SQL—where now we can start to correlate data across systems. That was never possible before.”
This is Bateman’s first turn as the lone head of technology for a capital markets firm, so there are still many lessons to be learned. With the easy victories out of the way, he now has to figure out how to continue to make the firm more efficient while proving the returns on investments (ROIs) he’s made, which is something that Bateman says is extremely challenging to prove.
“Trying to put a dollar value on a lot of the activities that surround that is not just tough from a technology perspective—it’s tough from a business standpoint,” he says.
What that means, though, is creating a culture of metrics, slicing and dicing everything, and measuring everything. It is also largely based on intuition, but being that the market is cyclical and there will eventually be hard times ahead, those easy victories won’t be quite so constant in the future—and Bateman recognizes this.
It’s nerve-wracking, but exciting, too, he says. He’s been given free rein to run IT for a nearly $20 billion firm; as long as he keeps IT tied closely to the business he can essentially make of it what he deems fit.
“The opportunity to make the business better—how can I make the business users better?” he says. “That’s what’s most exciting for me.”
More from Waters
Updating your subscription status
Work with us on your Integrated Marketing Campaigns
WatersTechnology offers a full range of custom research, surveys, webcasts, video and whitepapers for firms looking to demonstrate thought-leadership through their marketing campaigns and generate sales leads.
The catalyst for change in client reporting is a more empowered, digitally aware consumer. Excellence of service delivery will be key to investment managers...
Without a consistent source of data and limited functionalities in existing systems, firms are unable to perform tasks that are becoming increasingly important...