1. Have complete data from day one. Data quality is key to getting users to adopt new fund management software. Many fund managers we encounter just want to get the database set up with little or no data and then they wait and see what data gets in there. Most of the fund managers who use this approach will tell you that this is a recipe for failure.
2. Commit to using reports out of your database. Especially with a new system, fund managers are hesitant to use reports out of the database because they feel they don’t have enough data to drive the report. The result is they continue to use their excel models or whatever limited reporting tools they had used previously. Unfortunately, the limitations they faced with the tools they used to use are often why they looked for a new database in the first place. If fund managers commit to driving fundraising or deal pipeline reports out of their database, they’ll find that the data that goes into the database will increase in volume and quality.
3. Get buy-in from executives. As with any IT spend, a new fund management system is going to be more successful if leadership or an executive sponsor is behind it and they are committed to making it successful. Today, there are many technology options for the private equity industry, and it is important for firms to evolve their team to have someone take the lead on these strategies to remain successful and competitive.
4. Acknowledge that it’s not just technology you’re implementing. You can’t just throw a new system in place and expect everyone’s behavior to change; there’s a large change-management aspect to implementing new technology. It’s important not only to acknowledge the change but embrace it by benefiting from feedback, incentivizing people to be early adopters, and expecting there to be some resistance, as there would be any time you ask employees to change their behavior.
5. Set clear and attainable goals during implementation. A simple goal such as “We’re going to be able to drive our deal pipeline” lets your team understand what you are working toward and lets you focus on one set of functionality and specific workflows to support that functionality. There is also an easily-recognizable point at which you can see that you’ve reached that goal. Starting out without clear goals and simply trying to get your system to do everything you can think of right from the start will ultimately just slow people down.
To read further on best practices for private equity firms, read 4 Steps to Differentiate in Private Equity.
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