5 Keys to Guarantee User Adoption of your Fund Management Software

Like the well-known thought experiment, “If a tree falls in a forest and no one is around to hear it, does it make a sound?”, a similar question can and should be asked about fund management software: “If a firm has powerful fund management software and nobody uses it, does it make a difference?”

The answer to the second question is, of course, an emphatic “No!” Not only does unused fund management software not make a positive difference, it can have a negative impact on everything from firm finances (i.e., the cost of the software) to user morale (having a new system but sticking to old, outdated, inefficient systems and processes).

So, taking action to ensure widespread adoption of your fund management software is critical. And to be clear, simply issuing a directive that everyone must use the software isn’t effective. Even if the order causes more people to “use” the software, they certainly won’t get the maximum value from it. Instead, you have to help users understand the value of your new fund management software.

In our work with many successful firms, we’ve found that there are five keys to ensuring user adoption of a new system:

  1. Ensure that you have complete data from day one. Having high-quality data is crucial to getting users to adopt new fund management software. Many fund managers we talk with just want to get the database set up with little or no data and then they wait and see what happens. They incorrectly assume that the “right” data will be added sort of “organically” over time. However, fairly quickly they learn that this assumption was a mistake. You’ve got to be strategic and intentional about what information you collect and maintain. Otherwise, users will quickly recognize that much of what’s available to them in the fund management software isn’t useful, accurate, or up-to-date—and, consequently stop using the system.

  1. Commit to using reports out of your database.  managers are hesitant to use reports out of a database because they feel they don’t have enough data to populate the report and make it valuable. The result is they continue to use their Excel models or other reporting tools despite the fact that the limitations of those tools are typically what drove them to look for a better solution in the first place. When fund managers commit to creating fundraising or deal pipeline reports from their new software, the volume and quality of data in the database both increase rapidly. And those improvements make it even more helpful to run reports, and the two activities (collecting data and reporting on it) reinforce one another to everyone’s benefit.

  1. Get buy-in from executives. As with any IT spend, new fund management software will have better adoption if firm 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 your firm needs to have someone be the “champion” for the solution you select. Otherwise, you’ll be faced with ongoing “what if” questions about other systems.

  1. Acknowledge that it’s not just technology you’re implementing. You can’t just implement a new system, announce it’s available, and expect everyone’s behavior to change. There’s a large and essential change-management aspect to ensuring the adoption of new technology. It’s important not only to acknowledge the change but to maximize its benefit by incentivizing people to be early adopters, soliciting feedback, and acting on that input. And, you should expect there to be some resistance from users—it’s simply part of human nature to be wary of, and often resistant to, change. 

  1. Set clear and attainable goals during implementation. A simple goal such as, “We’re going to be able to drive our deal pipeline with less effort.” helps your team understand what you’re working toward and lets you focus on one set of functionality and specific workflows to support it. This type of goal can also be measured. In our example, you could compare the hours of deal pipeline management required before and after your software implementation. And as soon as you achieve one goal, you should be ready to set another. Very quickly your team will recognize and appreciate that you’re not expecting everyone to master all aspects of the new platform immediately.

Creating Excitement Around Your New Fund Management Software

Ideally, the steps above won’t just convince people to start using your new fund management software. They’ll create a sense of excitement and optimism about the benefits of the system to users and the firm as a whole. At that point, you’re moving past adopting the software to embracing it, and that’s a very good thing!

For more best practices for private equity firms, read our white paper below.

4 Benefits of Salesforce

A traditional crm was built for general ‘customer’ scenarios

Software platforms have made the world a better place by making work a better place. Indeed the world is better off when people enjoy their jobs even marginally more, and workplace applications on big CRM platforms like Salesforce.com have done that and much more.

But the potential that platforms like these offer presents diminishing returns: once the platform provider has engineered too many industry specific components into its platform, its usefulness for other industries begins to be threatened, and with that so do the usefulness of the component tools built into the platform.

So it is with the CRM category that Salesforce.com has defined: it is generic enough to work for many industries, and yet still offers the potential for others to round off the edges and nail more vertically-oriented and extremely tailored software solutions.

Private capital markets are actually a great demonstration of this dynamic. Where generic CRM platforms simplify — appropriately so — to assume there’s a business, a customer, a sale, and service of that customer, there are a few industry-specific pieces that are missing.

Take for example, that investors become customers by investing through legal entities the GP raises. It’s a subtle but important nuance that just doesn’t make sense at a platform-as-a-service level (because it’s overly complicated for a simple one-time sale that many industries require), but which can easily be added without 10 years or software engineering. Once provided, the rest of the platform’s components become tremendously powerful again and you’re set to take over the world.

As a traditional CRM in our pillars methodology, these nuances must be present to properly account for investors in these legal entities, potential target companies and which are owned by these entities, the context of all interactions with these parties (as well as the appropriate overlap, ie co-investments), and how you’re arriving at finding these opportunities on both sides of the equation, such that you’re able to piece together what’s effective and what’s not. Not just because we say so, but because these are the very relationships and data that are key to the motivation behind a CRM in any industry.

It’s critical, too, that the valuable publicly-available information that helps to enrich CRM systems and save users painful steps of entering it themselves is fully-integrated at the platform level.

Again, look no further than the 3,000+ pre-built integrations that Salesforce.com — the creator of the CRM platform concept — has at a platform level to do so, and which only exists by way of holding just short of overly-specifying certain industry workflows that would present challenges to properly integrate.

Stakeholder reporting and communication (investor relations) draws on a range of datasets

The traditional “customer service” model of CRM systems once again makes overly-simplified assumptions about the customer relationship when applied to private capital markets.

In fifteen years I personally have yet to hear the terms “warranty” or “service call” in this market because it’s just not the same. But make no mistake, as uncomfortable as it may be to say aloud, customer service is more important now than ever and it’s constantly happening; the industry is, after all, considered to be a financial “service”.

As it turns out, that service is primarily information-based — it’s driven by data and takes the form of reports and analysis that drive decisions, and then end up again in investor-facing reports and analysis.

The foundational elements of a private capital markets CRM must be built such that they accommodate this data (like we discussed above), but so too that it can accommodate additional supporting data that investors (customers!) need in the context of service.

Oftentimes this supporting data — financial metrics and time-based values, for example — is believed not to meet the traditional definition of CRM and the natural thought is “well, better do this in Excel!”.

While I happen to believe Excel is still the greatest software application ever built, its introduction to this value chain we’ve discussed herein actually creates the problem many firms suffer from: key data needed to provide customer service (again: effectively the entirety of a firm’s reports and analysis) is now in disparate systems and detached.

Both of those dynamics are important and distinct: not only is this supplemental data disparate, but when brought together there is no logical association that can be made between the two data sets.

Allow me, then, to make the point very simply: not only can this financial and time-based value data (you may be thinking about is as “portfolio monitoring” or “accounting”) be a part of a CRM, it is arguably the most important part of a CRM because it’s at the core of what providing service to the customer entails — information that comes out of data!

Firms need a digital method to engage stakeholders (ie investor portals)

Investor portals are not new; in fact, for many of us — including myself — they conjure up horrifying nightmares in which we’re aimlessly guessing at folders to find the newest document we need.

So in lies the opportunity: not only have the portals we’ve come to hate not simplified the process of acquiring information, they’ve failed to create an entirely new experience that is “customer service” driven.

To be fair, this is not a B2C market where you’d be long out of business for not having focused on customer service and thus the customer’s technology-driven experience. But don’t expect to be around too much longer if you aren’t thinking about this shift.

Today’s institutional investors increasingly expect this same consumer-like experience, and a massive opportunity is being missed by not providing it. It’s not about providing them the experience they desire; it’s more about the ability to measure engagement that is had in return.

Put simply: what’s keeping the market from providing this experience is the availability of the information that’s required to create the service that provides the experience.

If you’ve hung in this long, you know that by focusing on your CRM, you have the data that’s required to manage the customer relationship and the technology-driven experience through which that information is shared to create a differentiated and opportunistic customer experience.

fund management software