Wharton School Is Best in Class With Databases

A waist-to-ceiling whiteboard dominates Wharton School Associate Dean and CIO Gerry McCartney’s tiny basement office below Locust Walk, the broad, leafy footpath through the heart of the University of Pennsylvania’s main campus in Philadelphia. In the middle of the board, McCartney has scrawled a "hit list" of new financial market data he plans to acquire for Wharton Research Data Services (WRDS), the school’s Web-based collection of 100 finance and accounting databases and statistical analysis tools. At thousands of dollars a pop, buying and maintaining that many databases (not to mention the terabytes of storage to support them) would break the IT budget of most business schools. But not at Wharton. McCartney can afford them because he isn’t buying for his school alone. More than six dozen business schools around the world, including Wharton’s top competitors, buy access to WRDS (pronounced "words") for $30,000 a year. As long as the system covers its costs, McCartney can provide what he likes to call "a data supermarket."

The reason schools such as Harvard, Stanford and Northwestern’s Kellogg School of Management are willing to purchase a tool emblazoned with a competitor’s logo is that WRDS makes research easier. Those 100 data sets come in many different formats; Wharton delivers them in a standard format that makes it easy for researchers to merge data from different sources and use it with popular analytic software. As a result, finance and accounting professors?who advance their career by uncovering new insights into corporate performance and the workings of financial markets?can publish papers in almost half the time and consider questions that would have been too difficult to address without easy-to-use data. Meanwhile, Wharton?already known for its expertise in finance?has made a name for itself as a premier provider of academic computing services, applying the WRDS model to the development of teaching and information dissemination tools.

Wharton is honored this year with an Enterprise Value Award because it has used WRDS to extend the value of its brand by turning its competitors into customers and making business school faculty around the world more productive. "The value they’re providing is not just to Wharton but to research in [other] universities," says Doug Barker, CEO with Barker & Scott Consulting in Washington, D.C., and one of this year’s Enterprise Value Awards judges. "[WRDS] is realizing the promise of a networked world." Says Patrick Harker, Wharton’s dean: "We know we’ve crossed this magical line when junior faculty at other institutions are saying that a condition for them taking their jobs is having access to WRDS."

But the potential of WRDS might have gone unrealized were it not for the willingness of key decision-makers?not just at Wharton but throughout the business research community?to reexamine their value proposition. "Quite frankly, it didn’t seem like a blockbuster application at first glance," says Thomas Gerrity, the Joseph J. Aresty professor of management at Wharton, who was the dean when WRDS was deployed in 1994. "It’s kind of a pretty good idea. It might be helpful to some people," Gerrity recalls thinking. "But the lights didn’t go on; trumpets didn’t blow."

Filling an Unknown Need

No one asked for WRDS. Paul Ratnaraj, then the director of core systems, data services and operations with Wharton Computing and Information Technology (WCIT), pitched the application as a labor-saver after observing that faculty and doctoral students spent 40 percent of their time programming?writing database queries and reformatting data so that they could use it for analysis, and asking Wharton’s in-house database experts for help. Academic financial research relies on statistics. Researchers look, for example, for relationships between market valuations and corporate earnings to reach conclusions about how well traditional measures of corporate performance explain the stock prices of the late ’90s?crunching data about thousands of companies in the process. Ratnaraj, now CIO with The Pew Charitable Trusts in Philadelphia, figured that if he converted a couple of popular Fortran-based databases into an easier-to-use format and wrote a few screens for building queries, professors and their students wouldn’t have to be power users?or need as much help from his staff?to extract the information they needed. "[Users] just wanted the data as soon as possible," he recalls. "They did not need to write the code to manipulate it."

After McCartney was hired as CIO in 1993, Ratnaraj assessed the costs and benefits of WRDS and collected endorsements from his tech support staff. McCartney gave him $20,000 to cover the cost of storing the reformatted data. Ratnaraj wrote the original version of WRDS in SAS?the statistical software most faculty use to analyze their data?and programmers Steve Crispi and Son To then used the prototype to build the program. Later, Crispi produced a Web version.

Wharton’s faculty was pleased, and the story of WRDS could have ended there. In the ongoing battle with other top-tier schools to attract star researchers, Gerrity, an expert in the strategic use of IT and founder and former CEO of the Index Group, knew technology was a big selling point. Gerrity charged McCartney with building a state-of-the-art IT infrastructure to brand Wharton as a computing powerhouse. WRDS was a brick on the path to IT excellence.

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