In Part I of this series, we shared the initial steps Private Equity firms can take to differentiate themselves in the market. Now let’s take the next step on the “path to the top” and explore with Jill Montera, VP of Customer Success at Altvia, how to harness the power of your data.
In order to get all the value you can out of your data, effective data management using purpose-built private equity technology is essential. How is data management changing?
Data management and the associated private equity technology have evolved significantly over the last 10 years. When people first started to capture data, it was about just getting the information into the system. At the time, it wasn’t clear how the data would be used, but firms trusted that it would be helpful to have all their data stored in one system.
The latest phase in this evolution is about doing something with the data—looking at trends, running analytics, and making better decisions. Yet there are certain issues that make this transformation challenging. Some of them include the volume and complexity of the data.
Our approach to eliminating these pain points and enabling customers to better manage their data is a methodology involving:
- Creating private equity technology and processes that help firms engage with stakeholders
- Streamlining existing workflows and enabling new ones
- Consolidating, integrating, and harnessing data
These are essential steps on the path to the top. You’ve got to differentiate your firm in order to better compete in a crowded market. However, differentiation is highly dynamic. It not only involves the ability to discover new insights from your data and act faster, but also to ensure you’re perceived as a leader by your peers, investors, and competitors.
Before you can make progress toward setting your firm apart from the crowd, there are important considerations. Differentiation doesn’t just happen—there’s a discovery process driven by key questions:
- What problems are we solving? What is our investment strategy?
- What types of data are needed to solve these problems and deliver against this strategy?
- Now that we’re capturing the data, what are we going to do with it?
- Is the data complete and normalized for accurate analyses?
- Is the sample size large enough?
Once you have your data consolidated and integrated into a central system, what’s the next step?
At a basic level of harnessing the data, you can start to better understand the performance of your funds in relation to market trends and establish benchmarks. Then, you can use your private equity technology to add layers of data for more in-depth analysis.
For example, there’s greater competition for mid-market deals, and we’re finding that many Private Equity firms are having to look at early-stage companies in order to capitalize on the next phase of their growth.
With quality data, a firm can better understand and predict trends, which allows them to be more competitive in mid-market deals.
This benchmarking is informed by a number of data sources—from fundraising and deal tracking to third-party sources—and the key to making it really work is bringing all these data points into a central system for proper warehousing. This eliminates the antiquated approach of piecemealing spreadsheets with meeting notes and deal tracking.
After your data is consolidated and integrated, you can quickly and easily run reports and analytics to see where your deals are coming from and their associated quality.
By integrating the deal flow data with your internal institutional knowledge in a central system, you can really start to leverage the power of your relationships.
What are some best practices for harnessing the power of data with private equity technology?
I’d recommend really looking at the problem you’re trying to solve in order to determine which reports and analytics are needed. We take the time to dig into the problem with our customers and map out what they’re looking to accomplish.
Through this exercise, we can identify gaps that must be addressed and advise on the best approach to achieve their desired outcomes. We enable our customers to get the analytics and insights they need directly from the system.
Another best practice we see is firms combining their own data with market data in order to generate powerful data visualizations. These visualizations help them simplify and summarize the often-overwhelming quantity of data.
The majority of people are visual learners, and with these data visualizations, new insights can be gleaned faster and shared more effectively among team members. As a result, cumbersome reporting can be transformed with the right private equity technology into more powerful analytics to accelerate workflows and enable better decision making.
Jill Montera joined Altvia in 2008 with many years of experience working in higher education and in management consulting where she led large-scale technology implementations for Fortune 500 companies in the telecommunications and energy industries. At Altvia, Jill leads Customer Success, and loves working directly with clients to help them find long-term and ongoing value.
In her free time, Jill volunteers with various education non-profit organizations. She enjoys spending time in the Colorado outdoors with her husband and two sons hiking, skiing, running, and watching soccer. Jill also loves travel and has visited six of the seven continents.