Profit model for non-execution services

• US 7,953,652 B1
• Filed: 06/12/2006
• Issued: 05/31/2011
• Est. Priority Date: 06/12/2006
• Status: Active Grant

• Current Assignee: Morgan Stanley Services Group Inc. (Morgan Stanley)
• Original Assignee: Morgan Stanley
• Inventors: Hurewitz, Barry S.
• Primary Examiner(s): Kramer; James A
• Assistant Examiner(s): Vezeris; James A
• Application Number:
  US11/450,994
• Time in Patent Office: 1,814 Days
• Field of Search: 705/35, 705/30, 705/36.R
• US Class Current: 705/35
• CPC Class Codes: G06Q 30/04 Billing or invoicing
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

Methods of pricing non-execution services provided by a firm comprising an execution service provider and a non-execution service provider. The methods may comprise the steps of accruing a payment for execution and non-execution services from an external client and allocating a first portion of the payment to an execution service provider and a second portion of the payment to a non-execution service provider. The methods may also comprise the steps of calculating a cost of providing the non-execution services, and calculating a profit of the non-execution service provider considering the cost of providing the non-execution services and the second portion of the payment.

Claims

1. A computer-implemented method of determining the profitability of a non-execution service provider unit of a non-execution service provider division of a firm, the firm comprising an execution service provider division and the a non-execution service provider division, the method comprising:

receiving, by a computer device, an indication of a payment for execution and non-execution services from an external client, wherein the computer device comprises at least one processor and operatively associated memory;

receiving, by the computer device, an indication of an allocation of a first portion of the payment to the execution service provider division and an allocation of a second portion of the payment to the non-execution service provider division;

receiving, by the computer device, an indication of an allocation of a portion of the second portion of the payment to the non-execution service provider unit;

calculating, by the computer device, a cost of providing the non-execution services of the non-execution service provider unit to the external client; and

calculating, by the computer device, a profit of the non-execution service provider unit to service the external client considering the cost of providing the non-execution services to the external client and the portion of the second portion of the payment allocated to the non-execution service provider unit.

2. The method of claim 1, further comprising:

receiving, by the computer device, an indication of an allocation of a second payment from a second external client for other execution and other non-execution services;

receiving, by the computer device, an indication of an allocation of a first portion of the second payment to the execution service provider division and an allocation of a second portion of the second payment to the non-execution service provider division; and

receiving, by the computer device, an indication of an allocation of a portion of the second portion of the second payment to the non-execution service provider unit of the non-execution service provider division;

calculating, by the computer device, a second profit of the non-execution service provider unit to service the second external client considering a cost of providing the non-execution services of the non-execution service provider unit to the second external client, and the portion of second portion of the second payment.

3. The method of claim 2, further comprising allocating, by the computer device, a resource of the non-execution service provider unit to either the external client or the second external client based on the profit and the second profit.

4. The method of claim 1, further comprising:

receiving, by the computer device, an indication of an allocation of a first amount from an internal client to the non-execution service provider unit;

calculating, by the computer device a cost to the non-execution service provider unit of providing non-execution services to the internal client; and

calculating, by the computer device, a third profit of the non-execution service provider unit considering the first amount and the cost of providing non-execution services to the internal client.

5. The method of claim 4, further comprising allocating, by the computer device, a resource of the non-execution service provider unit to either the external client or the internal client based on the first profit and the third profit.

6. The method of claim 4, wherein the internal client is a unit of the execution service provider division.

7. The method of claim 4, wherein the internal client is a second non-execution service provider unit.

8. The method of claim 1, wherein an amount of the second portion of the payment is determined by the external client.

9. The method of claim 1, wherein an amount of the portion of the second portion of the payment is determined by the external client.

10. The method of claim 1, wherein an amount of the second portion of the payment is determined by the computer device.

11. The method of claim 10, further comprising determining, by the computer device, the amount of the second portion of the payment based on at least one of the group consisting of at least one survey of similar external clients, information specific to the field of the eternal client, and a popularity of the non-execution service provider unit.

12. The method of claim 1, further comprising the computer device providing a user interface, the user interface comprising a representation of the profit of the non-execution service provider unit.

13. The method of claim 1, further comprising allocating an amount of funding to the non-execution service provider unit, by the computer device, wherein the amount is dependent on the profit of the non-execution service provider unit.

14. The method of claim 1, further comprising:

receiving, by the computer device, an indication of a fee for services of the non-execution service provider unit;

finding, by the computer device, a cost to the non-execution service provider unit of providing the services, and wherein calculating the profit of the non-execution service provider unit comprises considering the fee and the cost.

19. The method of claim 1, further comprising receiving, by the computer device, a second allocation from the first internal client, wherein the second allocation is directed to a second non-execution service provider unit.

15. A computer-implemented method of determining the profitability of a non-execution service provider unit of a firm, the method comprising:

receiving, by a computer device, an allocation from a first internal client, wherein the computer device comprises at least one processor and operatively associated memory;

receiving an allocation from a second internal client;

calculating, by the computer device, a cost of providing non-execution services by the non-execution service provider unit to the first internal client;

calculating, by the computer device, a cost of providing non-execution services by the non-execution service provider unit to the second internal client;

calculating, by the computer device, a first profit of the non-execution service provider unit considering the allocation from the first internal client and the cost of providing non-execution services by the non-execution service provider unit to the first internal client; and

calculating, by the computer device, a second profit considering the allocation from the second internal client and the cost of providing non-execution services by the non-execution service provider unit to the second internal client.

16. The method of claim 15, further comprising allocating, by the computer device, a resource of the non-execution service provider unit to either the first or the second internal client based on the first and the second profit.

17. The method of claim 15, further comprising:

receiving, by a computer device, an indication of a payment for execution and non-execution services from an external client;

receiving, by the computer device, an indication of an allocation of a first portion of the payment to an execution services provider unit and an allocation of a second portion of the payment to the non-execution service provider unit;

calculating, by the computer device, a cost to the non-execution service provider unit of providing non-execution services to the external client;

calculating, by the computer device, a third profit considering the cost of providing non-execution services to the external client and the second portion of the payment; and

allocating, by the computer device a resource of the non-execution service provider unit to at least one client selected from the group consisting of the first internal client, the second internal client, and the external client, wherein the allocating comprises considering the first, second and third profits.

18. The method of claim 15, wherein the allocation from the first internal client is taken from a reward pool established by the first internal client from its own revenue.

20. The method of claim 18, wherein the reward pool is at least one of a predetermined amount and a percentage of the first internal client'"'"'s total revenue.

22. The method of claim 18, further comprising, the computer device redirecting a portion of the reward pool to a second non-execution service provider unit.

23. The method of claim 15, wherein the first internal client is at least one of an execution service provider unit and a second non-execution service provider unit.

21. The method of 18, wherein the reward pool is an expense item for the first internal client.

24. A computer-implemented method of determining the profits of a non-execution service provider division within a firm, wherein the non-execution service provider division comprises a plurality of non-execution service provider units, the method comprising:

summing, by a computer device, a first revenue of each of the non-execution service provider units derived from fees received from external clients for execution services, wherein the computer device comprises at least one processor and operatively associated memory;

summing, by the computer device, a second revenue of each of the non-execution service provider units derived from execution service provider units within the firm;

redistributing, by the computer device, a portion of the first revenue and the second revenue from at least a first of the non-execution service provider units to at least a second of the non-execution service provider units;

calculating, by the computer device, a cost incurred by the non-execution service provider units to provide service to external clients in relation to the execution services;

calculating, by the computer device, a cost incurred by the non-execution service provider units to provide service to the execution services provider units;

calculating by the computer device a cost to each of the non-execution service provider units of providing service to other non-execution service provider units; and

finding a profit of each non-execution service provider unit.

25. The method of claim 24, further comprising determining, by the computer device at least one of an investment in the non-execution service provider unit and a compensation for individuals included in the non-execution service provider unit, wherein the determining comprises considering the profit of each non-execution service provider unit.

26. The method of claim 24, further comprising receiving, by the computer device, and from the first of the non-execution service provider units, an indication of at least a part of the redistributed portion.

27. The method of claim 24, wherein a portion of the redistributed portion is determined by the firm.

28. The method of claim 24, further comprising summing, by the computer device, a third revenue of each of the non-execution service provider units, wherein the third revenue includes at least one fixed fee from an external client.

29. The method of claim 24, further comprising deriving, by the computer device, a profit per client from the profit of each non-execution service provider unit.

30. The method of claim 24, further comprising finding, by the computer device, a profit of each non-execution service provider unit per unit time.

31. The method of claim 24, further comprising finding, by the computer device, an average profit per unit time for a plurality of the non-execution service provider units.